MaxLinear Annual Report 2018

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FY2018 Annual Report · MaxLinear

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2018
OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the Transition Period From to
Commission file number: 001-34666

MaxLinear, Inc.

(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

5966 La Place Court, Suite 100
Carlsbad, California
(Address of principal executive offices)

14-1896129
(I.R.S. Employer
Identification No.)

92008
(Zip Code)

(760) 692-0711
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common Stock, $0.0001 par value

Name of the exchange on which registered
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes þ No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ¨ No þ

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities

Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files). Yes þ No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not

contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller

reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting
company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer
Non-accelerated filer

þ
¨

Accelerated filer
Smaller reporting company
Emerging growth company

¨
¨
¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for

complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

The aggregate market value of the registrant’s common stock, $0.0001 par value per share, held by non-affiliates of the registrant on

June 30, 2018, the last business day of the registrant’s most recently completed second fiscal quarter, was $895.5 million (based on the
closing sales price of the registrant’s common stock on that date). Shares of the registrant’s common stock held by each officer and director
and each person known to the registrant to own 10% or more of the outstanding voting power of the registrant have been excluded in that
such persons may be deemed to be affiliates. This determination of affiliate status with respect to the foregoing calculation is not a
determination for other purposes.

As of January 29, 2019, the registrant has 69,557,325 shares of common stock, par value $0.0001, outstanding.

_________________________________________

DOCUMENTS INCORPORATED BY REFERENCE

Information required by Part III of this Form 10-K is incorporated by reference to the registrant’s proxy statement (the “Proxy Statement”)
for the 2019 annual meeting of stockholders, which proxy statement will be filed with the Securities and Exchange Commission within 120
days after the end of the fiscal year covered by this Form 10-K.

Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures

MAXLINEAR, INC.

TABLE OF CONTENTS

Part I

Part II

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
Selected Financial Data
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information

Part III

Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters

Certain Relationships and Related Transactions, and Director Independence
Principal Accounting Fees and Services

Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.

Item 5.

Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.

Item 10.
Item 11.
Item 12.

Item 13.
Item 14.

Item 15.

Exhibits, Financial Statement Schedules

Part IV

Page

3
15
40
40
40
42

43
45
46
64
65
65
65
67

68
68

68
68
68

MAXLINEAR, INC.

PART I

Forward-Looking Statements

The information in this Annual Report on Form 10-K for the fiscal year ended December 31, 2018, or this Form 10-K, contains

forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, which are subject to the “safe harbor” created by those sections. These forward-looking statements
include, but are not limited to, statements concerning our strategy, future operations, future financial position, future revenues, projected
costs, prospects and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,”
“plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in
our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could
differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-
looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking
statements, including, without limitation, the risks set forth in Part I, Item 1A, “Risk Factors” in this Form 10-K. We do not assume any
obligation to update any forward-looking statements except as required by law.

ITEM 1.

BUSINESS

Corporate Information

We incorporated in the State of Delaware in September 2003. Our executive offices are located at 5966 La Place Court, Suite 100,

Carlsbad, California 92008, and our telephone number is (760) 692-0711. In this Form 10-K, unless the context otherwise requires, the
“Company,” “we,” “us” and “our” refer to MaxLinear, Inc. and its wholly owned subsidiaries. Our website address is www.maxlinear.com.
The contents of our website are not incorporated by reference into this Form 10-K. We provide free of charge through a link on our
website access to our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as
amendments to those reports, as soon as reasonably practical after the reports are electronically filed with, or furnished to, the Securities and
Exchange Commission, or SEC. Refer to Intellectual Property Rights section below for a list of our trademarks and trade names. All other
trademarks and trade names appearing in this Form 10-K are the property of their respective owners.

Overview

We are a provider of radio frequency, or RF, high-performance analog, and mixed-signal communications systems-on-chip solutions
for the connected home, wired and wireless infrastructure, and industrial and multi-market applications. We are a fabless integrated circuit
design company whose products integrate all or substantial portions of a broadband communication system. In most cases, these products
are designed on a single silicon-die, using standard digital CMOS processes and conventional packaging technologies. We believe this
enables our solutions to achieve superior power, performance, and cost advantages relative to our industry competition. Our customers
include electronics distributors, module makers, original equipment manufacturers, or OEMs, and original design manufacturers, or ODMs,
who incorporate our products in a wide range of electronic devices. Examples of such end market electronic devices incorporating our
products include cable DOCSIS broadband modems and gateways; wireline connectivity devices for in-home networking applications; RF
transceivers and modems for wireless carrier access and backhaul infrastructure; fiber-optic modules for data center, metro, and long-haul
transport networks; video set-top boxes and gateways; hybrid analog and digital televisions, direct broadcast satellite outdoor and indoor
units; and power management and interface products used in these and a range of other markets.

We combine our high-performance RF and mixed-signal semiconductor design skills with our expertise in digital communications

architectures that provide the benefits of superior RF system performance, along with high-performance analog interface and power
management solutions that enable shorter design cycles, significant design flexibility and low system cost across a wide range of broadband
communications, wired and wireless infrastructure, and industrial and multimarket applications.

Industry Background

Over the last two decades, the availability of ubiquitous internet connectivity has resulted in an exponential growth in data content
consumption, delivery, and distribution. The rapid rise of social media, the increasing popularity of broadcast video delivery services such
as Netflix, Amazon Prime, and Hulu, new high definition multimedia content, and expanding 4G/5G wireless data access have led to an
explosion in data traffic and created an insatiable demand for data bandwidth. Increasingly, industrial, enterprise, and home devices, such
as, high-efficiency environmentally friendly or "green" lighting, smart appliances in the connected home, commercial air-conditioning,
video surveillance equipment, manufacturing machinery, and point-of-sale asset tracking systems are being connected over the internet,
collectively referred to as the Internet of Things, or IoT. Society's drive towards increased energy efficiency and productivity gains is
inextricably linked to an expanding interconnected world of devices and people. The sheer amount of information generated and made
available for further processing in an IoT world necessitates the continuous upgrade of network bandwidth capacity and associated
equipment. Cloud based computing services for storage, big data analytics, and internet data traffic management require massive high-
speed data processing and data sharing between servers, switches, and routers within large hyperscale and enterprise data centers. As a
result, the growth in demand for fatter and faster data pipes (higher data capacity and lower data latency networks) inside the home, into
the home, and throughout the cloud and wired and wireless communications network infrastructure is unprecedented. The elimination of
data capacity and speed bottlenecks inside networks is heavily reliant on wide spectrum or broadband, high frequency circuits, and digital
signal processing algorithms that can improve spectrum utilization efficiency, and can be integrated into cost effective, low power, mixed-
signal system-on-chip semiconductor solutions. We believe that several of these trends are key drivers across multiple of our target
markets. These trends include the following:

•

Connected Home: Competing cable, satellite, and other broadband video and data service providers differentiate their services
by offering consumers bundled video, voice, and broadband data access, referred to as triple-play services. These services
include advanced features, such as, channel guide information, video-on-demand, DVR, and picture-in-picture viewing. Many
of today’s service provider home gateway set-top boxes enable consumers to simultaneously access and manage multimedia
content from multiple locations and screens in the home. These home gateway or set-top box devices are required to
simultaneously receive, demodulate, and decode multiple signals spread across several channels of frequency bandwidth over
a wide frequency range. In traditional set-top box architectures, each simultaneously accessed spectrum of signal is processed
by a dedicated RF receiver and transmitter. In the emerging cable and satellite home gateway or media servers, content is
delivered from the gateway/server to “thin” or remote IP clients that do not have traditional TV tuners. Each of these gateways
and clients necessarily includes a broadband RF transceiver SoC based on MoCA, G.hn, or WiFi home data connectivity
standards. As a result, the number of RF transceivers required in each gateway or client is greatly increased. For example, in
order to deliver the increasing data bandwidth requirements of the home, cable MSOs have begun initial deployments of
DOCSIS 3.1 equipment and services, which enable channel bonding or the concurrent reception of multiple channels of
frequency bands, resulting in a higher aggregate “sum of the channels” bandwidth available to cable subscribers. With the
increasing popularity of accessing multimedia content over-the-top, or OTT, via broadband-enabled streaming services,
consumers are augmenting OTT multimedia content services with free over-the-air (OTA) terrestrial TV broadcast
programming (also referred to as “Cord Cutting”). Therefore, cord-cutting OTT streaming media platforms also require one or
more terrestrial TV RF receiver and demodulator SoC solutions.

Infrastructure: The demand for “faster and fatter” data pipes and equipment in enterprise and telecommunications
infrastructure markets is being primarily driven by the explosion of data traffic generated by mobile devices, OTT streaming
video services, and cloud computing and data analytics.

Inside hyper-scale data centers, high speed optical interconnect products provide the interconnect function between the servers
to the top-of-rack switch, which is also connected to the core-router. Through a hierarchy of switches and routers, servers not
only connect to each other horizontally inside the data center, but are also connected to the external transport network. High
speed interconnect products are also present inside the service provider's metro and long-haul high-speed fiber-optic
connections of the transport network. Data center links and equipment are also consistently being upgraded for performance
and speed. Currently, while server connections are transitioning from 1Gbps to 10Gbps links, routers and switches are moving
from 10/40Gbps to 100Gbps, and

to 400Gbps interconnect speeds. Likewise, as data traffic demand continues to grow, the number of servers and a server’s
capacity to process massive amounts of data is poised to increase dramatically. Cloud services and machine learning are
dependent upon the ability to interconnect vast numbers of servers and storage inside a data center as efficiently as possible,
enabling the entire data center to act as a single computing or data processing unit. For this reason, improving the bandwidth of
data center networking technology within and between data centers is critical to the data center technology roadmap. At the
same time, the cooling of these large scale and densely configured data centers requires extremely low power and highly
integrated large bandwidth interconnect solutions.

Within wireless access and backhaul infrastructure, the increasing data traffic from 3G/4G/5G wireless access enabled
smartphones and IoT devices requires extremely high bandwidth capacity wireless backhaul and fronthaul point-to-point
transport links. As a result, microwave wireless backhaul and fronthaul transport links are migrating to millimeter wave
operating frequencies, where a large increase in available spectrum improves data capacity more than tenfold. The finite, and
fractured wireless spectrum designated for 5G access is being used more efficiently by increasing the complexity of radio
transceivers to be able to aggregate multiple non-contiguous channels of spectrum. At the same time, these complex radio
transceivers are feeding antenna arrays that can direct wireless signals more efficiently to the target user, vastly improving
coverage (range) and maximum data rates. 5G Wireless technology improves data rates and spectral efficiency by deploying
antenna arrays consisting of multiple antenna elements and an equivalent large number of radio transceivers per each base-
station. Increasing the density of 5G wireless cells geographically, for capacity and coverage, not only requires more base-
stations per unit cell, but it also entails the upgrade of the wireless and optical backhaul transport network connecting the cells.
The rollout of 5G functionality within base-stations presents unprecedented technical challenges in radio transceiver design. It
involves larger bandwidth spectrum handling capability; extremely high operating radio frequency range; support of antenna
array functionality; and the ability to transport high speed data to and from the base-station, all the while consuming extremely
low power.

In cable infrastructure, in order to deliver extremely high data bandwidth to homes and businesses, conventional copper and
analog broadband networks are being upgraded to deploy digital fiber deeper or closer to the subscriber premises. Currently,
the deep optical fiber is being locally terminated at fiber nodes, which “passively” convert the optical signals to electrical
signals to be transported over the coaxial cable network that connects to the end subscriber premises. Coaxial cable networks
are not only ubiquitous, but are also extremely expensive to replace with fiber which extends all the way to the subscriber
premises. As a result, service providers are striving to extract greater data bandwidth capacity from their existing coaxial cable
networks. In the cable DOCSIS3.1 network configuration, new fiber node installations are required to support proactive
“network monitoring” (“active fiber notes”), continually monitoring and optimizing spectrum usage in the coaxial cable, to
deliver up to 10Gbps of available data capacity to any subscriber. Innovation in radio frequency broadband circuits and signal
processing is necessary to meet the cost, power consumption, and size constraints of existing and new fiber node installations.

Increasing bandwidth severely stresses the limits of current semiconductor device technology, and drives up power
consumption. The costly thermal constraints imposed by the additional power dissipation has made it impractical to push more
data bandwidth or throughput inside network switches and other interconnects using existing communication signaling
techniques. To surmount these challenges, design innovation in broadband analog circuits, and digital signal processing are
required for network systems to reach higher data rates at much lower power consumption per unit bandwidth of data capacity.

•

Industrial & Multi-Market: We have proven technical competency serving the connected world. Increasingly, in the industrial
world, manufacturing equipment and appliances are connected to each other and to the cloud to better optimize utilization,
improve power consumption, and plant management. Legacy equipment and new installations need to communicate with each
other via newer and older connectivity protocol standards. This in turn creates opportunities for the growth of interface
products, and interface bridge products supporting multiple protocols. We believe our interface product portfolio, which
consists of serial interface, universal serial bus (USB), universal asynchronous receiver transmitter (UARTS), peripheral
interconnect express (PCIe) devices, data converters, power management integrated chips (PMICs), and force touch sensing
modules, creates new growth vectors across communications, industrial and multiple other end markets.

The development of broadband, low power, integrated communication systems-on-chip solutions is at the heart of competitiveness

across a range of different businesses spanning broadband wireline access, mobile data services, hyperscale

cloud data centers providing search, social networking and OTT streaming services, and cloud computation and storage markets. The
proliferation of high frequency, high bandwidth, low power applications with advanced features has led to a rapid increase in the demand
for systems that require multiple radio-frequency, mixed-signal, and high-performance analog and digital signal processing transceiver
SoCs.

Challenges Faced by Providers of Systems and RF Transceivers and Optical Interconnects

The performance requirements of high bandwidth spectrum-efficient applications consisting of broadband data access and
connectivity at home, 4G/5G wireless access and backhaul communications network infrastructure, and high-speed optical interconnect
applications in data center, metro, and long-haul telecom transport are extremely stringent. In particular, designing and implementing high-
frequency, high-bandwidth RF transceiver systems is extremely challenging owing to the high operating frequency ranges and the
spectrally scattered wide frequency bands across which the communication signal is transmitted. As a result, system designers encounter
significantly more sources of interference than in the case of traditional narrow band, low-frequency communication systems. Traditional
implementation of narrow band single-channel RF transceivers entails conventional radio system architectures that requires expensive
discrete components, and are fabricated in costly special purpose semiconductor technologies, such as silicon germanium, gallium arsenide,
and RF enhanced CMOS process technologies.

The key challenges of capturing and processing high quality broadband communications signals include:

•

Receiving single or multiple RF/digital communications signals spanning multiple frequency bands over a wide spectrum.
Many of the advanced high data rate applications require the simultaneous RF reception of multiple channels or frequency
bands in order to first aggregate, and then subsequently demodulate the data signal, which is spread over discrete disparate
frequency bands. Likewise, high data rate transmission is achieved by disaggregating the user's data signal and transmitting it
over multiple available frequency bands spanning a wide frequency spectrum. For example, in the cable set-top box and
broadband gateway markets, it is necessary to support the simultaneous reception of multiple channels of high definition
video, voice, and data applications in many system designs. OEMs meet these stringent requirements via multiple narrow or
wideband RF receivers, each of which is dedicated to the reception of a single frequency band. An alternate, but highly
challenging approach involves Full Spectrum Capture (FSCTM) receiver SoCs which can receive and digitize the entire
available RF frequency spectrum in the transmission medium. They can then select and aggregate the relevant frequency
bands over which the data is spread using analog and mixed-signal digital co-processing techniques. In conventional
architectures, use of discrete multiple RF receivers is costly or unviable due to increased design complexity, overall cost,
circuit board space, power consumption and heat dissipation. In addition, such implementations suffer from signal integrity
issues, reliability, signal interference, and thermal challenges owing to the proximity of sensitive multiple RF receivers and
discrete components in a limited PCB footprint.

Signal Clarity Performance Requirements. In communications systems, performance is limited by the quality of the
received/transmitted signal, which is referred to as the signal-to-noise ratio or dynamic range of the transceiver. The signal-to-
noise ratio measures the strength of the desired signal relative to the total noise and undesired signal energy in the same
channel. High definition satellite and terrestrial digital video, high capacity 5G wireless cellular data networks operating
across non-contiguous wireless spectrum bands, and wired coaxial cable and power-line networks require broadband RF
transceivers with large dynamic range. These transceiver systems are required to isolate the desired signals from the undesired
signals, which are invariably present in the wide operating frequency range. The undesired signals not only include the noise
generated by extraneous radio waves, but also interference produced by home appliances, enterprise communications
equipment, and other wireless networking systems. For example, in broadband television reception, traditional RF transceiver
implementations utilize expensive discrete components, such as band-pass filters, resonance elements, and varactor diodes to
separate the desired signals from the interfering signals. In high speed mobile environments, diversity combining of radio
signals and multi-user MIMO, in which the desired signal is spread over multiple frequency bands, is achieved using multiple
RF transceivers. Analog and digital signal processing is employed to reconstruct the original signal and to improve the signal-
to-noise ratio. While diversity combining of radio signals significantly improves signal-to-noise ratio, it requires sophisticated
RF, analog and digital signal co-processing, and software expertise. Broadband reception and diversity combining of RF
signals in mobile environments are extremely difficult to implement due to the stringent size, cost, and power consumption
constraints. Also, higher order modulation of communication signals, which enables maximization of data capacity in a finite
spectrum, requires extremely high signal-to-noise or dynamic range, which greatly increases the difficulty of implementing
broadband systems.

•

Power Consumption. Power consumption is an important consideration in consumer, broadband operator, and wired and
wireless infrastructure applications. For example, in battery-operated devices such as notebooks, and voice-enabled cable
modems with backup battery requirements to support E911 services, long battery life is a differentiating device attribute. In
wireless infrastructure applications, the cost of provisioning power to base-station antenna towers and the operating cost
attributable to energy consumption is extremely high. In wired optical infrastructure, such as data centers, the cost and
technical challenges of cooling larger scale, densely configured data centers are quite significant. In many multiple
transceiver system designs, a majority of the system’s overall power consumption can be ascribed to RF transceiver and
related components. Providers of RF transceivers and RF transceiver digital signal processing SoCs are confronted with the
design challenge of lowering power consumption while improving the device performance.

Size. The size of electronic components, such as RF transceivers and digital signal processing SoCs, is a key consideration for
system designers and the service providers that deploy them. Given the proliferation of the number of RF transceivers in
broadband applications such as service provider video and data gateway markets, size is a determining factor in the selection
of a silicon vendor’s component. In wired optical infrastructure applications inside data centers, rapidly increasing network
server and switch face-plate density trends are aggressively driving reduction of the size of interconnects. In wireless
infrastructure, space on the base-station radio towers, where the radios and modems are mounted, is highly constrained and is
extremely expensive to procure. In 5G wireless access, the deployment of massive MIMO and antenna arrays and cell
densification for coverage and capacity greatly increase the number of radio transceivers required in each base-station radio
tower, as well as the number of base-stations in a cell.

There are also challenges that are specific to the processing of high-speed optical interconnect signals in our target data center, metro

and long-haul telecommunications transport markets.

•

Optical Fiber Channel Impairments . The optical properties of the fiber material result in impairments to the optical signal as
it propagates along the fiber. These impairments include not only the loss of light intensity, but also the adverse modal,
chromatic, and polarization dispersion effects on light during its propagation in the fiber. These impairments degrade signal
integrity, which not only reduces the maximum data throughput, but also limits the distance over which data can propagate
over passive fiber. Further, electrical signal impairments are introduced in the process of conversion of optical signals to
electrical signals. Therefore, RF transceivers and PHY SoCs present inside optical modules are required to correct both
electrical and optical signal impairments at both ends of the fiber termination.

Optical Device Technology. The state of the art in optical device technology today lags the rapidly increasing speed
requirements of data traffic within cloud data centers and optical transport links between telecom data centers. So, there are
severe physical limits to the conversion of electrical signals to optical signals and vice versa at extremely high speeds. These
limitations arise from bandwidth, nonlinearities, and noise properties in lasers, modulators, and photo detectors used in optical
modules.

Form Factor. The form factor of the face plates in server, storage, switch, and networking racks in data centers limits the
amount of heat that can be dissipated within an enclosure. The power consumption of electrical and optical devices inside the
transceivers, to which optical fibers are connected, has been dramatically increasing. This imposes severe and costly thermal
design challenges in the development of systems. As data rates have increased dramatically, the physical form of the face
plates and connectors incorporating optical devices have not scaled rapidly enough to accommodate the corresponding
increase in power density.

Our RF and Mixed-Signal Platform Solutions

We are a provider of radio-frequency, or RF, high performance analog, and mixed-signal communications systems-on-chip solutions
for the connected home, wired and wireless infrastructure, and industrial and multi-market applications. We are a fabless integrated circuit
design company whose products integrate all or substantial portions of a broadband communication system. In most cases, these products
are designed on a single silicon-die, using standard digital CMOS processes and conventional packaging technologies. This enables our
solutions to achieve superior power, performance, and cost advantages relative to our industry competition. Our customers include
electronics distributors, module makers, original equipment manufacturers (OEMs), and original design manufacturers (ODMs), who
incorporate the Company’s products in a wide range of electronic devices. Examples of such end market electronic devices incorporating
our products include cable DOCSIS broadband modems and gateways; wireline connectivity devices for in-home networking applications;
RF transceivers and modems for wireless carrier access and backhaul infrastructure; fiber-optic modules for data center, metro, and long-
haul transport networks; video set-top boxes and gateways; hybrid analog and digital televisions, direct broadcast satellite outdoor and
indoor units; and power management and interface products used in these and a range of other markets.

Our products exemplify our core integrated circuit design and communications systems engineering capabilities:

•

Proprietary broadband/RF, analog and mixed-signal transceiver front ends. Our analog and mixed-signal IC designers
implement complex broadband radio transceiver front ends in standard silicon CMOS processes. Our ability to integrate
complex RF/Analog and mixed-signal circuits in standard CMOS processes enables single-die integration of a complete
digital signal processing communication system. This results in state-of-the-art performance, highest energy efficiency or
lowest power, smallest form factor, and the lowest manufacturing cost of a target function. Our high performance mixed-
signal design capability, which involves the high-speed conversion of signals precisely and efficiently between analog and
digital domains, is core to all our products and market applications. Our mixed-signal capabilities have allowed us to design
Full Spectrum Capture™ (FSC) receivers which digitize wide swaths of frequency spectrum. For example, in cable
DOCSIS3.1 data gateways, our single-chip FSC receivers digitize the entire cable spectrum and aggregate multiple frequency
bands or channels using analog and digital signal co-processing to enable multi-gigabit data services. Our architectural and
circuit innovations have resulted in a 100-fold reduction in power per unit bandwidth in broadband DOCSIS cable modems,
while increasing the total data throughput by an even greater factor. In our latest products, which address the emerging
400Gbps high speed optical interconnect applications inside the data center, our transceivers digitize and aggregate 4 lanes of
100Gps of high-speed data signals coming across the fiber, delivering 400Gbps of data throughput. Our microwave backhaul
RF transceiver constitutes the industry’s first single-chip CMOS implementation. It not only has the capability to receive
signals spanning an extremely wide 5GHz to 45GHz frequency range, but it is also able to aggregate signals spread over
multiple disparate frequency bands to support multi-gigabit-per-second data speeds. As a result, wireless backhaul outdoor
units incorporating our solution have the lowest power consumption, smallest form factor, superior performance, and the
lowest system cost of any wireless backhaul outdoor unit of which we are aware.

Advanced digital signal processing ASIC design and algorithms. Our signal processing algorithm and digital ASIC design
expertise is at the core of our ability to employ digital signal processing to enable breakthroughs in CMOS analog RF front-
end design and vice-versa. For example, impairments introduced by analog systems such as power amplifiers and photonics
devices are canceled using sophisticated digital signal processing algorithms to achieve superior signal quality, reduce power
consumption, and improve the speed of operation. Communication systems across a range of our current and future target
markets share common signal processing functions, such as efficient error control coding, compensation for transmission
medium or channel induced impairments, and digital processing of wideband signals. So, algorithmic breakthroughs in one
application are directly applicable to other product areas.

Architecture and system design for highly-integrated end-to-end communication systems on a single-chip. Our novel design
techniques tradeoff individual signal path circuit level performance to optimize the overall system performance. Our holistic
system level design approach eliminates costly, and power-hungry overdesign of individual circuit elements in the signal path.
As a result, we are able to address more complex customer problems that require a deeper understanding of the customer’s
end product. Many of our products not only integrate the entire physical layer (PHY), but also implement complete protocol
stacks. Examples of these products include our fully integrated single-chip solutions for in-home wireline connectivity,
namely G.hn and MoCA solutions. The integration of entire systems on a single-chip reduces the number of external board-
level components, decreases

•

board space, improves performance, simplifies customers’ product design, and significantly reduces power consumption.

Low-power design methodology. Reduced power consumption is extremely important to our end products and markets. The
superior energy efficiency of our products reflects our years of cumulative experience and R&D investment in system
architecture, semiconductor device modeling, and integrated circuit design expertise. At extremely high data rates, when
electrical signals transit on and off the chip, there is a severe penalty in speed and power consumption. Therefore, significant
reduction in power consumption of a device requires minimization of signal transitions between multiple chips. Our ability to
achieve the highest levels of integration of all analog/RF and digital signal processing functionality on the same chip
minimizes power consumption by eliminating such signal transitions. Our solutions disproportionately impact our end-
customer’s product power dissipation, such as in cable modems, cable FDX fiber nodes, 400Gbps optical transceiver
modules, and large 5G antenna radio transceiver arrays. Low power dissipation not only simplifies costly thermal design, but
also eliminates the need for bulky fans and other cooling aids. This in turn improves end customer product reliability,
increases the density of product features that can be supported in a compact footprint, and reduces overall system cost.

Embedded systems architecture. Our products contain complex integrated CPU subsystems. These subsystems typically
include multiple low-power microprocessor cores, bus and peripherals, memory controllers, and interrupt processing. In
addition to signal processing and supervisory activity functions, we also implement multiple layers of real-time embedded
firmware and protocol stacks on a single-chip. We believe our expertise and track record of successfully developing widely
deployed, reliable embedded protocols for networking applications are essential to the evolution of connected home products
of the future. Our firmware design capability is critical to the ease of use of our products in end customer platforms.

Scalable Platform. Our products share a highly modular, core radio system and digital signal processing architecture, which
enables us to offer fully integrated broadband RF transceiver based digital communication SoC solutions. They meet the
stringent performance requirements of a wide variety of end market applications and standards. This contrasts to legacy
solutions that require significant customization to conform to the various regional standards, technical performance and
product feature requirements. As a result, our customers can minimize their design resources required to develop applications
for multiple target markets using our “platform” solutions. In addition, we can deploy our engineering resources more
efficiently to both diversify and address larger communications end markets.

Our Strategy

Our objective is to be the leading provider of highly integrated mixed-signal RF transceivers and SoCs for the connected home,
wired and wireless infrastructure, and industrial and multi-market applications. In the future, we aim to leverage our core analog and digital
signal co-processing competency to expand into other communications markets with similar performance requirements. The key elements
of our strategy are:

•

Extend Technology Leadership in RF Transceivers and RF Transceiver + Digital Signal Processing SoCs. We believe that
our success thus far is largely attributable to our RF and mixed-signal design capability, as well as advanced digital design
expertise. We have leveraged this core competency to develop high-performance, low-cost semiconductor solutions for
broadband communications applications spanning the connected home, wireless access and backhaul network infrastructure,
and high-speed fiber-optic modules for data center, metro, and long-haul infrastructure markets. The broadband market
presents significant opportunities for innovation through the further integration of RF and mixed-signal functionality with
digital signal processing capability in CMOS process technology. By doing so, we believe we will be able to deliver products
with lower power consumption, superior performance, and increased cost benefits to system designers and service providers.
We believe that our core competencies and design expertise in this market will enable us to acquire more customers and
design wins over time. We will continue to invest in this capability and strive to be an innovation leader in this market.

Leverage and Expand our Existing Customer Base. We target customers who are leaders in their respective markets. We
intend to continue to focus on sales to customers who are leaders in our current target markets, and to build on our
relationships with these leading customers to define and enhance our product roadmap. By solving the specific problems faced
by our customers, we can minimize the risks associated with our customers’ adoption of our new integrated circuit products,
and reduce the length of time from the start of product design to customer

revenue. Further, engaging with market leaders will enable us to participate in emerging technology trends and new industry
standards.

•

Target Additional High-Growth Markets. Our core competency is in RF analog and mixed-signal integrated circuit design in
CMOS process technology. Several of the technological challenges involved in developing RF solutions for video
broadcasting and broadband reception are common to a majority of broader communications markets. We intend to leverage
our core competency in developing highly integrated RF transceiver and RF transceiver SoCs in standard CMOS process
technology to address additional markets within broadband communications, communications infrastructure, and connectivity
markets that we believe offer high growth potential.

Expand Global Presence. Due to the global nature of our supply chain and customer locations, we intend to continue to
expand our sales, design and technical support organization both in the United States and overseas. In particular, we expect to
align our regional support to our customer base. We believe that our customers will increasingly expect this kind of local
capability and support.

Attract and Retain Top Talent. We are committed to recruiting and retaining highly talented personnel with proven expertise
in the design, development, marketing and sales of communications integrated circuits. We believe that we have assembled a
high-quality team in all the areas of expertise required at an integrated circuit design company. We provide an attractive work
environment for all of our employees. We believe that our ability to attract the best engineers is a critical component of our
future growth and success in our chosen markets.

Products

Our products are integrated into a wide range of electronic devices, including cable, terrestrial, and satellite video set-top boxes and

gateways, cable DOCSIS data and voice gateways, hybrid analog and digital televisions, smartphones, direct broadcast satellite outdoor
units, optical modules for data center, metro, and long-haul transport network applications, RF transceivers and modem solutions for
wireless carrier infrastructure applications, wireline connectivity devices for in-home networking applications and last-mile broadband
access, and power management and interface products for enterprise networking, infrastructure, industrial, and multi-market applications.

We provide our customers with guidelines, known as reference designs, so that they can efficiently use our products in their product

designs. We currently provide the following types of semiconductors:

•

RF Receivers. These semiconductor products combine RF receiver technology that traditionally required multiple external
discrete components, such as very high frequency, or VHF, and ultra-high frequency, or UHF, tracking filters, surface acoustic
wave, or SAW, filters, intermediate-frequency, or IF, amplifiers, low noise amplifiers and transformers. All of these external
components have been either eliminated or integrated into a single semiconductor produced entirely in standard CMOS
process technology.

RF Receiver SoCs. These semiconductor products combine the functionality of RF receivers, and demodulators in a single
chip. In some configurations, these products may incorporate multiple RF receivers and single or multiple demodulators in a
single chip to provide application or market specific solutions to customers.

Wireless Infrastructure Backhaul RF Receivers and Modem SoC's. These semiconductor products reside in wireless operator
system deployments to enable communication between various metro network rings. The RF receiver is capable of receiving
and transmitting signals spanning 5-45 GHz and passes the signal to the back-end modem device, which modulates one or
more carrier wave signals to encode digital information for transmission and demodulate signals to decode the transmitted
information. The increasing amounts of data and video content being consumed on mobile devices are creating new
opportunities for innovative and efficient modem and RF receiver SoCs.

Laser Modulator Drivers. These semiconductor products reside in optical modules and provide a constant current source that
delivers exactly the current to the laser diode that it needs to operate for a particular application

Transimpedance Amplifiers. These semiconductor products reside in optical modules and provide current-to-voltage
conversion, converting the low-level current of a sensor to a voltage.

Clock and Data Recovery Circuits. These semiconductor products generate a clock from an approximate frequency reference,
and then phase-aligns to the transitions in the data stream with a phase-locked loop, or PLL.

•

Interface solutions. These differentiated bridging connectivity products include USB, ethernet, PCIe, as well as UARTs, and
serial transceiver devices which serve data and telecommunications, networking and storage, industrial control and embedded
applications and facilitate and optimize the interface between systems and across networks.

Power Management. These DC/DC voltage conversion and supervision products are designed to support the needs of various
infrastructure, broadband, industrial and embedded system applications, including traditional linear, switching power
management solutions and universal PMICs. Our proprietary and patented programmable power technology enables
customers to reduce product development cycles, provides a flexible and configurable solution for control of critical attributes
of the power management system and enables the system architect to design products that significantly reduce wasted energy.

Data encryption and compression. These products offer some of the industry's lowest noise and distortion amplifiers and
lowest power consumption high speed analog-to-digital converters, or ADCs. They include instrumentation, low noise, high
speed and hybrid amplifiers, as well as high speed ADCs and digital-to-analog converters. Our amplifier and data converter
products are designed to meet the needs of various industrial, medical, and video applications.

Customers

We sell our products, directly and indirectly, to original equipment manufacturers, or OEMs, module makers and original design

manufacturers, or ODMs, and we refer to these as our end customers. By providing a highly integrated reference design solution that our
customers can incorporate in their products with minimal modifications, we enable our customers to design cost-effective high-performance
SoC-based solutions rapidly. A significant portion of our sales are through distributors based in Asia, who then resell our product.

A significant portion of our net revenue has historically been generated by a limited number of customers. In the years ended
December 31, 2018, 2017 and 2016, ten customers accounted for approximately 61%, 58% and 74% of our net revenue, respectively. In the
years ended December 31, 2018, 2017 and 2016, Arris Group, Inc. (which entered into a definitive agreement to be acquired by
CommScope Holding Company, Inc.), or Arris, represented 18%, 25% and 27% of our net revenue. Sales to Arris as a percentage of net
revenue include sales to Pace, which was acquired by Arris in January 2016, for the year ended December 31, 2016. In the year ended
December 31, 2016, Technicolor (which includes Cisco, Inc.'s, or Cisco, former connected devices business), represented 10% of net
revenue. In 2018 and 2017, Technicolor represented less than 10% of our net revenue.

Products shipped to Asia accounted for 81%, 89% and 93% of our net revenue in the years ended December 31, 2018, 2017 and
2016, respectively. Products shipped to China accounted for 63%, 71% and 78% of our net revenue in the years ended December 31, 2018,
2017 and 2016, respectively. Although a large percentage of our products are shipped to Asia, we believe that a significant number of the
systems designed by these customers and incorporating our semiconductor products are then sold outside Asia. For example, we believe
revenue generated from sales of our digital terrestrial set-top box products during the years ended December 31, 2018, 2017 and 2016
related principally to sales to Asian set-top box manufacturers delivering products into Europe, Middle East, and Africa, or EMEA markets.
Similarly, revenue generated from sales of our cable modem products during the years ended December 31, 2018, 2017 and 2016 related
principally to sales to Asian ODM’s and contract manufacturers delivering products into European and North American markets. To date,
all of our sales have been denominated in United States dollars. See Note 13 to our consolidated financial statements, included in Part IV,
Item 15 of this Report for a discussion of total revenue by geographical region for the years ended December 31, 2018, 2017 and 2016.

Sales and Marketing

We sell our products worldwide through multiple channels, using our direct sales force, third party sales representatives, and a
network of domestic and international distributors. We have direct sales personnel covering the United States, Europe and Asia, and
operate customer engineering support offices in Carlsbad, Irvine, and San Jose in California; Tokyo in Japan; Shanghai and Shenzhen in
China; Taipei and Hsinchu in Taiwan; Seoul in South Korea; Bangalore in India; Burnaby in Canada; Paterna in Spain; and Singapore. We
also employ a staff of field applications engineers to provide direct engineering support locally to some of our customers.

Our distributors are independent entities that assist us in identifying and servicing customers in a particular territory, usually on a

non-exclusive basis. Sales through distributors accounted for approximately 42%, 34% and 19% of our net revenue in the years ended
December 31, 2018, 2017 and 2016, respectively.

Our sales cycles typically require a significant amount of time and a substantial expenditure of resources before we can realize

revenue from the sale of products, if any. Our typical sales cycle consists of a multi-month sales and development process involving our
customers’ system designers and management. The typical time from early engagement by our sales force to actual product introduction
ranges from nine to twelve months for the consumer market, to as much as 18 to 24 months for the cable and satellite markets, and 36
months or longer for industrial, wired and wireless infrastructure markets. If successful, this process culminates in a customer’s decision to
use our products in its system, which we refer to as a design-win. Volume production may begin within three to twelve months after a
design-win, depending on the complexity of our customer’s product and other factors upon which we may have little or no influence. Once
our products have been incorporated into a customer’s design, they are likely to be used for the life cycle of the customer’s product. Thus, a
design-win may result in an extended period of revenue generation. Conversely, a design-loss to our competitors, may adversely impact our
financial results for an extended period of time.

We generally receive purchase orders from our customers approximately six to twenty-six weeks prior to the scheduled product

delivery date. Because of the scheduling requirements of our foundries and assembly and test contractors, we generally provide our
contractors production forecasts six to twelve months in advance and place firm orders for products with our suppliers up to twenty-six
weeks prior to the anticipated delivery date, in some cases without a purchase order from our own customers. Our standard warranty
provides that products containing defects in materials, workmanship or product performance may be returned for a refund of the purchase
price or for replacement, at our discretion.

Manufacturing

We use third-party foundries and assembly and test contractors to manufacture, assemble and test our products. This outsourced
manufacturing approach allows us to focus our resources on the design, sale and marketing of our products. Our engineers work closely
with our foundries and other contractors to increase yield, lower manufacturing costs and improve product quality.

Wafer Fabrication. We utilize an increasing range of process technologies to manufacture our products, from standard CMOS to
more exotic processes including SiGe and GaAs. Within this range of processes, we use a variety of process technology nodes ranging from
0.18µ down to 14 nanometer. We depend on independent silicon foundry manufacturers to support our wafer fabrication requirements. Our
key foundry partners include Global Foundries Inc. in Singapore, Semiconductor Manufacturing International Corporation or SMIC in
China, Taiwan Semiconductor Manufacturing Corporation or TSMC in Taiwan, and United Microelectronics Corporation or UMC in
Taiwan and Singapore.

Assembly/packaging and Test. Upon completion of the silicon processing at the foundry, we forward the finished silicon wafers to

independent assembly/packaging and test service subcontractors. The majority of our assembly/packaging and test requirements are
supported by the following independent subcontractors: Advanced Semiconductor Engineering or ASE in Taiwan, Malaysia, and
Singapore (assembly/packaging and test), Amkor Technology in Korea and China (assembly/packaging and test), Giga Solution
Technology Co. Ltd. in Taiwan (test only), SIGURD Microelectronics Corp. in Taiwan (test only), Unisem (M) Berhad in China
(assembly/packaging only) and United Test and Assembly Center or UTAC Holdings Ltd. in Singapore, Thailand, and China
(assembly/packaging and test).

Quality Assurance. We have implemented significant quality assurance procedures to assure high levels of product quality for our
customers. We closely monitor the work-in-progress information and production records maintained by our suppliers, and communicate
with our third-party contractors to assure high levels of product quality and an efficient manufacturing time cycle. Upon successful
completion of the quality assurance procedures, all of our products are stored and shipped to our customers or distributors directly from our
third-party contractors in accordance with our shipping instructions.

Research and Development

We believe that our future success depends on our ability to both improve our existing products and to develop new products for both

existing and new markets. We direct our research and development efforts largely to the development of new high-performance, mixed-
signal RF transceivers and SOCs for the connected home, wired and wireless infrastructure, and industrial and multi-market applications.
We target applications that require stringent overall system performance and low power consumption. As new and challenging
communication applications proliferate, we believe that many of these applications may benefit from our SoC solutions combining analog
and mixed-signal processing with digital signal processing functions. We have assembled a team of highly skilled semiconductor and
embedded software design engineers with expertise in broadband RF, mixed-signal and high-performance analog integrated circuit design,
digital signal processing, communications systems and SoC design. As of December 31, 2018, we had approximately 498 employees in our
research and

development group. Our engineering design teams are located in Carlsbad, Irvine, and San Jose in California; Shenzhen in China; Hsinchu
in Taiwan; Bangalore in India; Burnaby in Canada; Paterna in Spain; and Singapore.

Competition

We compete with both established and development-stage semiconductor companies that design, manufacture and market analog and

mixed-signal broadband RF receivers, optical interconnects, high-performance interface, data and video compression and encryption, and
power management products. Our competitors include companies with much longer operating histories, greater name recognition, access to
larger customer bases and substantially greater financial, technical and operational resources, as well as smaller companies specializing in
narrow markets, to internal or vertically integrated engineering groups within certain of our customers. In addition, our industry is
experiencing substantial consolidation. As a result, our competitors are increasingly large multi-national semi-conductor companies with
substantial market influence. Our competitors may develop products that are similar or superior to ours. We consider our primary
competitors to be companies with a proven track record of supporting market leaders and the technical capability to develop and bring to
market competing broadband RF receiver and RF receiver SoC, modem, and optical interconnect products. Our primary merchant
semiconductor competitors include Silicon Labs, NXP Semiconductors N.V, MediaTek, Inc., Broadcom Ltd, Rafael Microelectronics, Inc.,
Inphi Corporation, M/A-COM Technology Solutions Holdings, Inc., Semtech Corporation, Qorvo Inc., Texas Instruments, HiSilicon
Technologies Co., Ltd., Analog Devices, Integrated Device Technology, Inc. (which entered into a definitive agreement to be acquired by
Renesas Electronics Corporation), Renesas Electronics Corporation, Maxim Integrated Products, Inc., Monolithic Power Systems,
Microchip Technology, Inc., Ambarella, Inc., and Infineon Technologies AG. Because our products often are building block
semiconductors which provide functions that in some cases can be integrated into more complex integrated circuits, we also face
competition from manufacturers of integrated circuits, some of which may be existing customers or platform partners that develop their
own integrated circuit products. If we cannot offer an attractive solution for applications where our competitors offer more fully integrated
products, we may lose significant market share to our competitors. Certain of our competitors have fully-integrated
tuner/demodulator/video processing solutions targeting high-performance cable, satellite, or DTV applications, and thereby potentially
provide customers with smaller and cheaper solutions. Some of our targeted customers for our optical interconnect solutions are module
makers who are vertically integrated, where we compete with internally supplied components, and we compete with much larger analog
and mixed-signal catalog competitors in the multi-market high-performance analog markets.

The market for RF, mixed-signal and high-performance analog semiconductor products is highly competitive, and we believe that it

will grow more competitive as a result of continued technological advances. We believe that the principal competitive factors in our
markets include the following:

•

product
performance;

features and
functionality;

energy
efficiency;

size;

ease of system
design;

customer
support;

product
roadmap;

reputation;

reliability;
and

price.

We believe that we compete favorably as measured against each of these criteria. However, our ability to compete in the future will

depend upon the successful design, development and marketing of compelling RF, mixed-signal and high-performance analog
semiconductor integrated solutions for high growth communications markets. In addition, our competitive position will depend on our
ability to continue to attract and retain talent while protecting our intellectual property.

Intellectual Property Rights

Our success and ability to compete depend, in part, upon our ability to establish and adequately protect our proprietary technology

and confidential information. To protect our technology and confidential information, we rely on a combination of intellectual property
rights, including patents, trade secrets, copyrights and trademarks. We also protect our proprietary technology and confidential information
through the use of internal and external controls, including contractual protections with employees, contractors, business partners,
consultants and advisors. Protecting mask works, or the “topography” or semiconductor material designs, of our integrated circuit products
is of particular importance to our business and we seek to prevent or limit the ability of others to copy, reproduce or distribute our mask
works.

We have 1050 issued patents and 285 patent applications pending in the United States. We also have 59 issued foreign patents and

17 other pending foreign patent applications, based on our issued patents and pending patent applications in the United States.

We are the owner of approximately 23 trademarks that have been registered and/or allowed for registration in the United States. We
own foreign counterparts (including approximately 40 foreign registrations) of certain of these registered trademarks in Australia, Canada,
Chile, China, the EU, Hong Kong, India, Israel, Japan, Korea, Singapore and Taiwan. We also claim common law rights in certain other
trademarks that are not registered.

We may not gain any competitive advantages from our patents and other intellectual property rights. Our existing and future patents
may be circumvented, designed around, blocked or challenged as to inventorship, ownership, scope, validity or enforceability. It is possible
that we may be provided with information in the future that could negatively affect the scope or enforceability of either our present or
future patents. Furthermore, our pending and future patent applications may or may not be granted under the scope of the claims originally
submitted in our patent applications. The scope of the claims submitted or granted may or may not be sufficiently broad to protect our
proprietary technologies. Moreover, we have adopted a strategy of seeking limited patent protection with respect to the technologies used in
or relating to our products.

We are a party to a number of license agreements for various technologies, such as a license agreement with Intel Corporation
relating to demodulator technologies that are licensed specifically for use in our products for cable set-top boxes. The agreement was
originally entered into with Texas Instruments but was subsequently assigned to Intel Corporation as part of Intel Corporation’s acquisition
of Texas Instruments’ cable modem product line in 2010. The license agreement with Intel Corporation has a perpetual term, but Intel
Corporation may terminate the agreement for any uncured material breach or in the event of bankruptcy. If the agreement is terminated, we
would not be able to manufacture or sell products that contain the demodulator technology licensed from Intel Corporation, and there would
be a delay in the shipment of our products containing the technology until we found a replacement for the demodulator technology in the
marketplace on commercially reasonable terms or we developed the demodulator technology itself. We believe we could find a substitute
for the currently licensed demodulator technology in the marketplace on commercially reasonable terms or develop the demodulator
technology ourselves. In either case, obtaining new licenses or replacing existing technology could have a material adverse effect on our
business, as described in “Risk Factors — Risks Related to Our Business — We utilize a significant amount of intellectual property in our
business. If we are unable to protect our intellectual property, our business could be adversely affected.”

The semiconductor industry is characterized by frequent litigation and other vigorous offensive and protective enforcement actions

over rights to intellectual property. Moreover, there are numerous patents in the semiconductor industry, and new patents are being granted
rapidly worldwide. Our competitors may obtain patents that block or limit our ability to develop new technology and/or improve our
existing products. If our products were found to infringe any patents or other intellectual property rights held by third parties, we could be
prevented from selling our products or be subject to litigation fees, statutory fines and/or other significant expenses. We may be required to
initiate litigation in order to enforce any patents issued to us, or to determine the scope or validity of a third-party’s patent or other
proprietary rights. We may in the future be contacted by third parties suggesting that we seek a license to intellectual property rights that
they may believe we are infringing. In addition, in the future, we may be subject to lawsuits by third parties seeking to enforce their own
intellectual property rights, as described in “Risk Factors — Risks Related to Our Business — We have settled in the past and are currently
a party to intellectual property litigation and may face additional claims of intellectual property infringement. Current litigation and any
future litigation could be time-consuming, costly to defend or settle and result in the loss of significant rights” and in “Item 3 — Legal
Proceedings.”

Employees

As of December 31, 2018, we had approximately 739 employees, including 498 in research and development, 104 in sales and

marketing, 34 in operations and semiconductor technology and 103 in administration. None of our employees is

represented by a labor organization or under any collective bargaining arrangement, and we have never had a work stoppage. We consider
our employee relations to be good.

Backlog

Our sales are made primarily pursuant to standard purchase orders. Because industry practice allows customers to reschedule, or in

some cases, cancel orders on relatively short notice, we do not believe that backlog is a good indicator of our future sales.

Seasonality

The semiconductor industry is highly cyclical and is characterized by constant and rapid technological change, rapid product
obsolescence and price erosion, evolving technical standards, short product life cycles and wide fluctuations in product supply and demand.
From time to time, these and other factors, together with changes in general economic conditions, cause significant upturns and downturns
in the industry, and in our business in particular.

In addition, our operating results are subject to substantial quarterly and annual fluctuations due to a number of factors, such as the
overall demand volatility for semiconductor solutions across a diverse range of communications, industrial and multimarket applications,
the timing of receipt, reduction or cancellation of significant orders, the gain or loss of significant customers, market acceptance of our
products and our customers’ products, our ability to timely develop, introduce and market new products and technologies, the availability
and cost of products from our suppliers, new product and technology introductions by competitors, intellectual property disputes and the
timing and extent of product development costs.

ITEM 1A.

RISK
FACTORS

This Annual Report on Form 10-K, or Form 10-K, including any information incorporated by reference herein, contains forward-

looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, referred to as the Securities Act, and
Section 21E of the Securities Exchange Act of 1934, as amended, referred to as the Exchange Act. In some cases, you can identify forward-
looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “forecast,” “anticipate,” “believe,”
“estimate,” “predict,” “potential,” “continue” or the negative of these terms or other comparable terminology. The forward-looking
statements contained in this Form 10-K involve known and unknown risks, uncertainties and situations that may cause our or our
industry’s actual results, level of activity, performance or achievements to be materially different from any future results, levels of activity,
performance or achievements expressed or implied by these statements. These factors include those listed below in this Item 1A and those
discussed elsewhere in this Form 10-K. We encourage investors to review these factors carefully. We may from time to time make
additional written and oral forward-looking statements, including statements contained in our filings with the SEC. However, we do not
undertake to update any forward-looking statement that may be made from time to time by or on behalf of us, whether as a result of new
information, future events or otherwise, except as required by law.

Before you invest in our securities, you should be aware that our business faces numerous financial and market risks, including
those described below, as well as general economic and business risks. The following discussion provides information concerning the
material risks and uncertainties that we have identified and believe may adversely affect our business, our financial condition and our
results of operations. Before you decide whether to invest in our securities, you should carefully consider these risks and uncertainties,
together with all of the other information included in this Form 10-K and in our other public filings, which could materially affect our
business, financial condition or future results.

Risks Related to Our Business

We face intense competition and expect competition to increase in the future, which could have an adverse effect on our revenue,

revenue growth rate, if any, and market share.

The global semiconductor market in general, and the connected home, wired and wireless infrastructure, and broader industrial and
communications analog and mixed-signal markets in particular, are highly competitive. We compete in different target markets to various
degrees on the basis of a number of principal competitive factors, including our products’ performance, features and functionality, energy
efficiency, size, ease of system design, customer support, product roadmap, reputation, reliability and price. We expect competition to
increase and intensify as a result of industry consolidation and the resulting creation of larger semiconductor companies. Large
semiconductor companies resulting from industry consolidation could enjoy substantial market power, which they could exert through,
among other things, aggressive pricing that could adversely affect our customer relationships and revenues. In addition, we expect the
internal resources of large, integrated original equipment manufacturers, or OEMs, may continue to enter our markets. Increased
competition could result in price

pressure, reduced profitability and loss of market share, any of which could materially and adversely affect our business, revenue, revenue
growth rates, if any, and operating results.

As our products are integrated into a variety of communications and industrial platforms, our competitors range from large,
international merchant semiconductor companies offering a wide range of semiconductor products to smaller companies specializing in
narrow markets, to internal or vertically integrated engineering groups within certain of our customers. Our primary merchant
semiconductor competitors include Silicon Labs, NXP Semiconductors N.V., MediaTek, Inc., Broadcom Ltd, Rafael Microelectronics, Inc.,
Inphi Corporation, M/A-COM Technology Solutions Holdings, Inc., Semtech Corporation, Qorvo Inc., Texas Instruments, HiSilicon
Technologies Co., Ltd., Analog Devices, Integrated Device Technology, Inc.(which entered into a definitive agreement to be acquired by
Renesas Electronics Corporation), Renesas Electronics Corporation, Maxim Integrated Products, Inc., Monolithic Power Systems,
Microchip Technology, Inc., Ambarella, Inc., and Infineon Technologies AG. It is quite likely that competition in the markets in which we
participate will increase in the future as existing competitors improve or expand their product offerings. In addition, it is quite likely that a
number of other public and private companies are in the process of developing competing products for our current and target markets.
Because our products often are building block semiconductors which provide functions that in some cases can be integrated into more
complex integrated circuits, we also face competition from manufacturers of integrated circuits, some of which may be existing customers
or platform partners that develop their own integrated circuit products. If we cannot offer an attractive solution for applications where our
competitors offer more fully integrated products, we may lose significant market share to our competitors. Certain of our competitors have
fully-integrated tuner/demodulator/video processing solutions targeting high-performance cable, satellite, or DTV applications, and thereby
potentially provide customers with smaller and cheaper solutions. Some of our targeted customers for our optical interconnect solutions are
module makers who are vertically integrated, where we compete with internally supplied components, and we compete with much larger
analog and mixed-signal catalog competitors in the multi-market high-performance analog markets.

Our ability to compete successfully depends on factors both within and outside of our control, including industry and general

economic trends. During past periods of downturns in our industry, competition in the markets in which we operate intensified as
manufacturers of semiconductors reduced prices in order to combat production overcapacity and high inventory levels. Many of our
competitors have substantially greater financial and other resources with which to withstand similar adverse economic or market conditions
in the future. Moreover, the competitive landscape is changing as a result of intense consolidation within our industry as some of our
competitors have merged with or been acquired by other competitors, and other competitors have begun to collaborate with each other.
These developments may materially and adversely affect our current and future target markets and our ability to compete successfully in
those markets.

We depend on a limited number of customers, that have undergone or are undergoing consolidation and who themselves are
dependent on a consolidating set of service provider customers, for a substantial portion of our revenue, and the loss of, or a significant
reduction in orders from one or more of our major customers could have a material adverse effect on our revenue and operating results. In
addition, a significant portion of our revenue is derived from sales of products to distributors, who then resell our products.

For fiscal 2018, one customer accounted for 18% of our net revenue, and our ten largest customers collectively accounted for 61%

of our net revenue. For fiscal 2017, one customer accounted for approximately 25% of our net revenue, and our ten largest customers
collectively accounted for approximately 58% of our net revenue. For fiscal 2016, two customers accounted for approximately 37% of our
net revenue, and our ten largest customers collectively accounted for approximately 74% of our net revenue. We expect that our operating
results for the foreseeable future will continue to show a substantial but declining percentage of sales dependent on a relatively small
number of customers and on the ability of these customers to sell products that incorporate our RF receivers or RF receiver SoCs, digital
STB video SoCs, DBS ODU receiver SOCs, and MoCA®, G.hn connectivity solutions and high-performance analog solutions. In the
future, these customers may decide not to purchase our products at all, may purchase fewer products than they did in the past, or may defer
or cancel purchases or otherwise alter their purchasing patterns. Factors that could affect our revenue from these large customers include
the following:

•

substantially all of our sales to date have been made on a purchase order basis, which permits our customers to cancel, change
or delay product purchase commitments with little or no notice to us and without penalty;

some of our customers have sought or are seeking relationships with current or potential competitors which may affect their
purchasing decisions;

•

service provider and OEM consolidation across cable, satellite, and fiber markets could result in significant changes to our
customers’ technology development and deployment priorities and roadmaps, which could affect our ability to forecast
demand accurately and could lead to increased volatility in our business; and

technological changes in our markets could lead to substantial volatility in our revenues based on product transitions, and
particularly in our broadband markets, we face risks based on changes in the way consumers are accessing and using
broadband and cable services, which could affect operator demand for our products.

In addition, delays in development could impair our relationships with our strategic customers and negatively impact sales of the

products under development. Moreover, it is possible that our customers may develop their own products or adopt a competitor’s solution
for products that they currently buy from us. If that happens, our sales would decline and our business, financial condition and results of
operations could be materially and adversely affected.

Our relationships with some customers may deter other potential customers who compete with these customers from buying our
products. To attract new customers or retain existing customers, we may offer these customers favorable prices on our products. In that
event, our average selling prices and gross margins would decline. The loss of a key customer, a reduction in sales to any key customer or
our inability to attract new significant customers could seriously impact our revenue and materially and adversely affect our results of
operations.

A significant portion of our revenues are from sales of product to distributors, who then resell our product. Our agreements with

certain of these distributors provide protection against price reduction on their inventories of our products. The loss of certain distributors
could have a material adverse effect on our business and results of operations, and price reductions associated with their inventories of our
products could have a substantial adverse effect on our operating results in the event of a dramatic decline in selling prices for these
products.

A significant portion of our revenue is attributable to demand for our products in markets for connected home solutions, and
development delays and consolidation trends among cable and satellite Pay-TV and broadband operators could adversely affect our future
revenues and operating results.

For fiscal 2018, 2017 and 2016, revenue directly attributable to connected home applications accounted for approximately 54%,
69% and 89% of our net revenue, respectively. Delays in the development of, or unexpected developments in the connected home markets
could have an adverse effect on order activity by original equipment manufacturers in these markets and, as a result, on our business,
revenue, operating results and financial condition. In addition, consolidation trends among pay-TV and broadband operators may continue,
which could have a material adverse effect on our future operating results and financial condition. Most recently, we experienced sharper
than previously anticipated declines in our legacy video SoC revenues as a result of the acquisition of Time Warner Cable by Charter
Communications.

If we fail to penetrate new applications and markets, our revenue, revenue growth rate, if any, and financial condition could be

materially and adversely affected.

We sell most of our products to manufacturers of cable broadband voice and data modems and gateways, pay-TV set-top boxes and

gateways into cable and satellite operator markets, satellite outdoor units or LNB’s, optical modules for long-haul and metro
telecommunications markets, and RF transceivers and modem solutions for wireless infrastructure markets. We have expanded our product
offerings to include power management and interface technologies which are ubiquitous functions in new and existing markets such as
wireless and wireline communications infrastructure, broadband access, industrial, enterprise network, and automotive applications. Our
future revenue growth, if any, will depend in part on our ability to further penetrate into, and expand beyond, these markets with analog and
mixed-signal solutions targeting the markets for high-speed optical interconnects for data center, metro, and long-haul optical modules,
telecommunications wireless infrastructure, and cable DOCSIS 3.1 network infrastructure products. Each of these markets presents distinct
and substantial risks. If any of these markets do not develop as we currently anticipate, or if we are unable to penetrate them successfully, it
could materially and adversely affect our revenue and revenue growth rate, if any.

Broadband data modems and gateways and pay-TV and satellite set-top boxes and video gateways continue to represent our largest
North American and European revenue generator. The North American and European pay-TV market is dominated by only a few OEMs,
including Technicolor, Arris Group, Inc., Compal Broadband Networks, Humax Co., Ltd., and Samsung Electronics Co., Ltd. These OEMs
are large multinational corporations with substantial negotiating power relative to us and are undergoing significant consolidation. Securing
design wins with any of these companies requires a substantial investment of our time and resources. Even if we succeed, additional testing
and operational certifications will be required by the OEMs’ customers, which include large pay-TV television companies such as Comcast
Corporation, Liberty Global plc, Spectrum, Sky,

AT&T and EchoStar Corporation. In addition, our products will need to be compatible with other components in our customers’ designs,
including components produced by our competitors or potential competitors. There can be no assurance that these other companies will
support or continue to support our products.

If we fail to penetrate these or other new markets upon which we target our resources, our revenue and revenue growth rate, if any,

likely will decrease over time and our financial condition could suffer.

We may be unable to make the substantial and productive research and development investments that are required to remain

competitive in our business.

The semiconductor industry requires substantial investment in research and development in order to develop and bring to market new

and enhanced technologies and products. Many of our products originated with our research and development efforts, which we believe
have provided us with a significant competitive advantage. For fiscal 2018, our research and development expense was $120.0 million,
$112.3 million, and $97.7 million, respectively. For fiscal 2018 and 2017, we continued to increase our research and development
expenditures as part of our strategy of devoting focused research and development efforts on the development of innovative and sustainable
product platforms. We are committed to investing in new product development internally in order to stay competitive in our markets and
plan to maintain research and development and design capabilities for new solutions in advanced semiconductor process nodes such as
28nm and 16nm and beyond. We do not know whether we will have sufficient resources to maintain the level of investment in research and
development required to remain competitive as semiconductor process nodes continue to shrink and become increasingly complex. In
addition, we cannot assure you that the technologies that are the focus of our research and development expenditures will become
commercially successful.

We have experienced a recent decline in net revenues. A significant variance in our operating results or rates of growth, if any,

could lead to substantial volatility in our stock price. To the extent we return to growth, we may not sustain our growth rate, and we may
not be able to manage future growth effectively.

We have experienced a recent decline in net revenues due to anticipated declines from legacy product shipments used in satellite,

terrestrial, and video SoC applications, as well as a slowdown in the cable market owing to the market transition from DOCSIS 3.0 to
DOCSIS 3.1 and related customer inventory reductions. Our net revenue increased from approximately $387.8 million in 2016, to $420.3
million in 2017 and decreased to $385.0 million in 2018. You should not rely on our operating results for any prior quarterly or annual
periods as an indication of our future operating performance. Please refer to the Risk Factor entitled “Our operating results are subject to
substantial quarterly and annual fluctuations and may fluctuate significantly due to a number of factors that could adversely affect our
business and our stock price” for a discussion of factors contributing to variances in our operating results or rates of growth. If we are
unable to return to revenue growth and maintain adequate revenue growth, our financial results could suffer and our stock price could
decline.

To return to growth and manage any future growth successfully and handle the responsibilities of being a public company, we

believe we must effectively, among other things:

•

recruit, hire, train and manage additional qualified engineers for our research and development activities, especially in the
positions of design engineering, product and test engineering and applications engineering;

add sales personnel and expand customer engineering support
offices;

implement and improve our administrative, financial and operational systems, procedures and controls;
and

enhance our information technology support for enterprise resource planning and design engineering by adapting and
expanding our systems and tool capabilities, and properly training new hires as to their use.

If we are unable to manage our growth effectively, we may not be able to take advantage of market opportunities or develop new

products and we may fail to satisfy customer requirements, maintain product quality, execute our business plan, or respond to competitive
pressures.

The complexity of our products could result in unforeseen delays or expenses caused by undetected defects or bugs, which could

reduce the market acceptance of our new products, damage our reputation with current or prospective customers and adversely affect our
operating costs.

Highly complex products like our broadband RF receivers and RF receiver SoCs, physical medium devices for optical modules, RF

transceiver and modem solutions for wireless infrastructure markets, and high-performance analog solutions may

contain defects and bugs when they are first introduced or as new versions are released. Where any of our products, including legacy
acquired products, contain defects or bugs, or have reliability, quality or compatibility problems, we may not be able to successfully correct
these problems. Consequently, our reputation may be damaged and customers may be reluctant to buy our products, which could materially
and adversely affect our ability to retain existing customers and attract new customers, and our financial results. In addition, these defects or
bugs could interrupt or delay sales to our customers. If any of these problems are not found until after we have commenced commercial
production of a new product (as in the case of the legacy Entropic products experiencing warranty claims), we may be required to incur
additional development costs and product recall, repair or replacement costs, and our operating costs could be adversely affected. These
problems may also result in warranty or product liability claims against us by our customers or others that may require us to make
significant expenditures to defend these claims or pay damage awards. In the event of a warranty claim, we may also incur costs if we
compensate the affected customer. We maintain product liability insurance, but this insurance is limited in amount and subject to
significant deductibles. There is no guarantee that our insurance will be available or adequate to protect against all claims. We also may
incur costs and expenses relating to a recall of one of our customers’ products containing one of our devices. The process of identifying a
recalled product in devices that have been widely distributed may be lengthy and require significant resources, and we may incur
significant replacement costs, contract damage claims from our customers and reputational harm. Costs or payments made in connection
with warranty and product liability claims and product recalls could materially affect our financial condition and results of operations.

Average selling prices of our products could decrease rapidly, which would have a material adverse effect on our revenue and gross

margins.

We may experience substantial period-to-period fluctuations in future operating results due to the erosion of our average selling

prices. From time to time, we have reduced the average unit price of our products due to competitive pricing pressures, new product
introductions by us or our competitors, and for other reasons, and we expect that we will have to do so again in the future. In particular, we
believe that industry consolidation has provided a number of larger semiconductor companies with substantial market power, which has had
an adverse impact on selling prices in some of our markets. If we are unable to offset any reductions in our average selling prices by
increasing our sales volumes or introducing new products with higher margins, our revenue and gross margins will suffer. To support our
gross margins, we must develop and introduce new products and product enhancements on a timely basis and continually reduce our and
our customers’ costs. Our inability to do so would cause our revenue and gross margins to decline. In addition, certain of our agreements
with key distributors, we provide protection for reductions in selling prices of the distributors' inventory, which could have a significant
adverse effect on our operating results if the selling prices for those products fell dramatically.

If we fail to develop and introduce new or enhanced products on a timely basis, our ability to attract and retain customers could be

impaired and our competitive position could be harmed.

We operate in a dynamic environment characterized by rapidly changing technologies and industry standards and technological
obsolescence. To compete successfully, we must design, develop, market and sell new or enhanced products that provide increasingly
higher levels of performance and reliability and meet the cost expectations of our customers. The introduction of new products by our
competitors, the market acceptance of products based on new or alternative technologies, or the emergence of new industry standards could
render our existing or future products obsolete. Our failure to anticipate or timely develop new or enhanced products or technologies in
response to technological shifts could result in decreased revenue and our competitors winning more competitive bid processes, known as
“design wins.” In particular, we may experience difficulties with product design, manufacturing, marketing or certification that could delay
or prevent our development, introduction or marketing of new or enhanced products. If we fail to introduce new or enhanced products that
meet the needs of our customers or penetrate new markets in a timely fashion, we will lose market share and our operating results will be
adversely affected.

In particular, we believe that we will need to develop new products in part to respond to changing dynamics and trends in our end

user markets, including (among other trends) consolidation among cable and satellite operators, potential industry shifts away from the
hardware devices and other technologies that incorporate our products, and changes in consumer television viewing habits and how
consumers access and receive broadcast content and digital broadband services. We cannot predict how these trends will continue to
develop or how or to what extent they may affect our future revenues and operating results. We believe that we will need to continue to
make substantial investments in research and development in an attempt to ensure a product roadmap that anticipates these types of
changes; however, we cannot provide any assurances that we will accurately predict the direction in which our markets will evolve or that
we will be able to develop, market, or sell new products that respond to such changes successfully or in a timely manner, if at all.

We have settled in the past and are currently a party to intellectual property litigation and may face additional claims of intellectual
property infringement. Current litigation and any future litigation could be time-consuming, costly to defend or settle and result in the loss
of significant rights.

The semiconductor industry is characterized by companies that hold large numbers of patents and other intellectual property rights

and that vigorously pursue, protect and enforce intellectual property rights. Third parties have in the past and may in the future assert
against us and our customers and distributors their patent and other intellectual property rights to technologies that are important to our
business. In particular, from time to time, we receive correspondence from competitors seeking to engage us in discussions concerning
potential claims against us, and we receive correspondence from customers seeking indemnification for potential claims related to
infringement claims asserted against down-stream users of our products. We investigate these requests as received and could be required to
enter license agreements with respect to third party intellectual property rights or indemnify third parties, either of which could have an
adverse effect on our future operating results.

On January 21, 2014, CrestaTech Technology Corporation, or CrestaTech, filed a complaint for patent infringement against us in the
United States District Court of Delaware, or the District Court Litigation. In its complaint, CrestaTech alleged that we infringe U.S. Patent
Nos. 7,075,585, or the ‘585 Patent and 7,265,792, or the ‘792 Patent. In addition to asking for compensatory damages, CrestaTech alleged
willful infringement and sought a permanent injunction. CrestaTech also named Sharp Corporation, Sharp Electronics Corp. and VIZIO,
Inc. as defendants based upon their alleged use of our television tuners.

On January 28, 2014, CrestaTech filed a complaint with the U.S. International Trade Commission, or ITC, again naming, among

others, us, Sharp, Sharp Electronics, and VIZIO, or the ITC Investigation. On May 16, 2014, the ITC granted CrestaTech’s motion to file
an amended complaint adding six OEM Respondents, namely, SIO International, Inc., Hon Hai Precision Industry Co., Ltd., Wistron Corp.,
Wistron Infocomm Technology (America) Corp., Top Victory Investments Ltd. and TPV International (USA), Inc. which are collectively
referred to with us, Sharp and VIZIO as the Company Respondents. CrestaTech’s ITC complaint alleged a violation of 19 U.S.C. § 1337
through the importation into the United States, the sale for importation, or the sale within the United States after importation of
MaxLinear’s accused products that CrestaTech alleged infringe the same two patents asserted in the Delaware action. Through its ITC
complaint, CrestaTech sought an exclusion order preventing entry into the United States of certain of our television tuners and televisions
containing such tuners from Sharp, Sharp Electronics, and VIZIO. CrestaTech also sought a cease and desist order prohibiting the Company
Respondents from engaging in the importation into, sale for importation into, the sale after importation of, or otherwise transferring within
the United States certain of our television tuners or televisions containing such tuners.

On March 10, 2014, the court stayed the District Court Litigation pending resolution of the ITC Investigation.

On December 15, 2014, the ITC held a trial in the ITC Investigation. On February 27, 2015, the Administrative Law Judge, or the
ALJ, issued a written Initial Determination, or ID, ruling that the Company Respondents do not violate Section 1337 in connection with
CrestaTech’s asserted patents because CrestaTech failed to satisfy the economic prong of the domestic industry requirement pursuant to
Section 1337(a)(2). In addition, the ID stated that certain of our television tuners and televisions incorporating those tuners manufactured
and sold by certain customers infringe three claims of the ‘585 Patent (claims 10, 12 and 13), and these three claims were not determined to
be invalid. On April 30, 2015, the ITC issued a notice indicating that it intended to review portions of the ID finding no violation of Section
1337, including the ID’s findings of infringement with respect to, and validity of, the ‘585 Patent, and the ID’s finding that CrestaTech
failed to establish the existence of a domestic industry within the meaning of Section 1337.

The ITC subsequently issued its opinion, which terminated its investigation. The opinion affirmed the findings of the ALJ that no

violation of Section 1337 had occurred because CrestaTech had failed to establish the economic prong of the domestic industry
requirement. The ITC also affirmed the ALJ's finding of infringement with respect to the three claims of the '585 Patent that were not held
to be invalid.

On November 30, 2015, CrestaTech filed an appeal of the ITC decision with the United States Court of Appeals for the Federal
Circuit, or the Federal Circuit. On March 7, 2016, CrestaTech voluntarily dismissed its appeal, resulting in a final determination of the ITC
Investigation in our favor.

petitions were instituted or instituted-in-part meaning, together with the IPRs filed by third parties, there were six IPR proceedings
instituted involving the two CrestaTech patents asserted against us.

In October 2015, the PTAB issued final decisions in two of the six pending IPR proceedings (one for each of the two asserted
patents), holding that all of the reviewed claims are unpatentable. Included in these decisions was one of the three claims of the ‘585 Patent
(claim 10) mentioned above in connection with the ITC’s final decision. CrestaTech appealed the PTAB’s decisions at the Federal Circuit.
On November 8, 2016, the Federal Circuit issued an opinion affirming the PTAB’s finding of unpatentability.

In August 2016, the PTAB issued final written decisions in the remaining four pending IPR proceedings (two for each of the

asserted patents), holding that many of the reviewed claims - including the two remaining claims of the ‘585 Patent which the ITC held
were infringed - are unpatentable. The parties have appealed the two decisions related to the ‘585 Patent; however, no appeals were filed as
to the PTAB’s rulings for the ‘792 Patent. The Federal Circuit heard oral argument on these appeals on December 4, 2017. On December 7,
the Federal Circuit issued a Rule 36 affirmance in one of the ‘585 appeals, affirming that the two remaining claims that the ITC had ruled
were valid and infringed (claims 12 and 13) are unpatentable. On January 25, 2018, the Federal Circuit issued its ruling in the other ‘585
appeal, vacating the PTAB's ruling that certain claims were not unpatenable and remanding to the PTAB for further analysis of whether
CrestaTech is estopped from arguing and/or has waived the right to argue whether six dependent claims are patentable.

As a result of these IPR decisions, all 13 claims that CrestaTech asserted against us in the ITC Investigation have been found to be

unpatentable by the PTAB and the Federal Circuit.

On March 18, 2016, CrestaTech filed a petition for Chapter 7 bankruptcy in the Northern District of California. As a result of this
proceeding, all rights in the CrestaTech asserted patents, including the right to control the pending litigation, were assigned to CF Crespe
LLC, or CF Crespe. CF Crespe became the named party in the then-pending IPRs, Federal Circuit appeal and District Court Litigation.

In April 2017, the Delaware court continued the stay of the District Court Litigation per the parties’ request, pending resolution of

the Federal Circuit appeals in the IPR’s. On April 3, 2018, the District Court dismissed the District Court Litigation. While Crespe has
subsequently suggested that this dismissal may have been in error, Crespe has taken no action to date to re-instate the case. In its
bankruptcy proceeding, Crespe has stated that it “no longer has any valid patent claims that it is asserting in any of the proceedings
purchased through the Sale Agreement,” which includes the District Court Litigation against us. [In re Cresta Technology Corporation,
Case No. 16-50808 (N.D. Cal. Bank. 2016) at Dkt. No. 270.] At this time, we cannot predict whether the District Court or other litigation
will be re-instated.

Claims that our products, processes or technology infringe third-party intellectual property rights, regardless of their merit or
resolution and including the CrestaTech claims, are costly to defend or settle and could divert the efforts and attention of our management
and technical personnel. In addition, many of our customer and distributor agreements require us to indemnify and defend our customers or
distributors from third-party infringement claims and pay damages in the case of adverse rulings. Claims of this sort also could harm our
relationships with our customers or distributors and might deter future customers from doing business with us. In order to maintain our
relationships with existing customers and secure business from new customers, we have been required from time to time to provide
additional assurances beyond our standard terms. If any future proceedings result in an adverse outcome, we could be required to:

•

cease the manufacture, use or sale of the infringing products, processes or
technology;

pay substantial damages for
infringement;

expend significant resources to develop non-infringing products, processes or
technology;

license technology from the third-party claiming infringement, which license may not be available on commercially reasonable
terms, or at all;

cross-license our technology to a competitor to resolve an infringement claim, which could weaken our ability to compete with
that competitor; or

pay substantial damages to our customers or end users to discontinue their use of or to replace infringing technology sold to
them with non-infringing technology.

Any of the foregoing results could have a material adverse effect on our business, financial condition, and results of operations.

We utilize a significant amount of intellectual property in our business. If we are unable to protect our intellectual property, our

business could be adversely affected.

Our success depends in part upon our ability to protect our intellectual property. To accomplish this, we rely on a combination of

intellectual property rights, including patents, copyrights, trademarks and trade secrets in the United States and in selected foreign countries
where we believe filing for such protection is appropriate. Effective patent, copyright, trademark and trade secret protection may be
unavailable, limited or not applied for in some countries. Some of our products and technologies are not covered by any patent or patent
application. We cannot guarantee that:

•

any of our present or future patents or patent claims will not lapse or be invalidated, circumvented, challenged or
abandoned;

our intellectual property rights will provide competitive advantages to
us;

our ability to assert our intellectual property rights against potential competitors or to settle current or future disputes will not
be limited by our agreements with third parties;

any of our pending or future patent applications will be issued or have the coverage originally
sought;

our intellectual property rights will be enforced in jurisdictions where competition may be intense or where legal protection
may be weak;

any of the trademarks, copyrights, trade secrets or other intellectual property rights that we presently employ in our business
will not lapse or be invalidated, circumvented, challenged or abandoned; or

we will not lose the ability to assert our intellectual property rights against or to license our technology to others and collect
royalties or other payments.

In addition, our competitors or others may design around our protected patents or technologies. Effective intellectual property

protection may be unavailable or more limited in one or more relevant jurisdictions relative to those protections available in the United
States, or may not be applied for in one or more relevant jurisdictions. If we pursue litigation to assert our intellectual property rights, an
adverse decision in any of these legal actions could limit our ability to assert our intellectual property rights, limit the value of our
technology or otherwise negatively impact our business, financial condition and results of operations.

Monitoring unauthorized use of our intellectual property is difficult and costly. Unauthorized use of our intellectual property may

have occurred or may occur in the future. Although we have taken steps to minimize the risk of this occurring, any such failure to identify
unauthorized use and otherwise adequately protect our intellectual property would adversely affect our business. Moreover, if we are
required to commence litigation, whether as a plaintiff or defendant as has occurred with CrestaTech, not only will this be time-consuming,
but we will also be forced to incur significant costs and divert our attention and efforts of our employees, which could, in turn, result in
lower revenue and higher expenses.

We also rely on customary contractual protections with our customers, suppliers, distributors, employees and consultants, and we
implement security measures to protect our trade secrets. We cannot assure you that these contractual protections and security measures
will not be breached, that we will have adequate remedies for any such breach or that our suppliers, employees or consultants will not assert
rights to intellectual property arising out of such contracts.

In addition, we have a number of third-party patent and intellectual property license agreements. Some of these license agreements

require us to make one-time payments or ongoing royalty payments. Also, a few of our license agreements contain most-favored nation
clauses or other price restriction clauses which may affect the amount we may charge for our products, processes or technology. We cannot
guarantee that the third-party patents and technology we license will not be licensed to our competitors or others in the semiconductor
industry. In the future, we may need to obtain additional licenses, renew existing license agreements or otherwise replace existing
technology. We are unable to predict whether these license agreements can be obtained or renewed or the technology can be replaced on
acceptable terms, or at all.

When we settled a trademark dispute with Linear Technology Corporation, we agreed not to register the “MAXLINEAR” mark or

any other marks containing the term “LINEAR”. We may continue to use “MAXLINEAR” as a

corporate identifier, including to advertise our products and services, but may not use that mark on our products. The agreement does not
affect our ability to use our registered trademark “MxL”, which we use on our products. Due to our agreement not to register the
“MAXLINEAR” mark, our ability to effectively prevent third parties from using the “MAXLINEAR” mark in connection with similar
products or technology may be affected. If we are unable to protect our trademarks, we may experience difficulties in achieving and
maintaining brand recognition and customer loyalty.

We are subject to risks associated with our distributors’ product inventories and product sell-through. Should any of our distributors

cease or be forced to stop distributing our products, our business would suffer.

We currently sell a significant portion of our products to customers through our distributors, who maintain their own inventories of

our products. Sales through distributors accounted for approximately 42%, 34% and 19% of our net revenue in the years ended
December 31, 2018, 2017 and 2016, respectively. Upon shipment of product to these distributors, title to the inventory transfers to the
distributor and the distributor is invoiced, generally with 30 to 60 day terms. Distributor sales are also recognized upon shipment to the
distributor and estimates of future pricing credits and/or stock rotation rights reduce revenue recognized to the net amount before the actual
amounts are known. If our estimates of such credits and rights are materially understated it could cause subsequent adjustments that
negatively impact our revenues and gross profits in a future period.

If our distributors are unable to sell an adequate amount of their inventories of our products in a given quarter to manufacturers and
end users or if they decide to decrease their inventories of our products for any reason, our sales through these distributors and our revenue
may decline. In addition, if some distributors decide to purchase more of our products than are required to satisfy end customer demand in
any particular quarter, inventories at these distributors would grow in that quarter. These distributors likely would reduce future orders until
inventory levels realign with end customer demand, which could adversely affect our product revenue.

Our reserve estimates with respect to the products stocked by our distributors are based principally on reports provided to us by our
distributors, typically on a weekly basis. To the extent that this resale and channel inventory data is inaccurate or not received in a timely
manner, we may not be able to make reserve estimates accurately or at all.

We are subject to order and shipment uncertainties, and differences between our estimates of customer demand and product mix and

our actual results could negatively affect our inventory levels, sales and operating results.

Our revenue is generated on the basis of purchase orders with our customers rather than long-term purchase commitments. In
addition, our customers can cancel purchase orders or defer the shipments of our products under certain circumstances. Our products are
manufactured using a silicon foundry according to our estimates of customer demand, which requires us to make separate demand forecast
assumptions for every customer, each of which may introduce significant variability into our aggregate estimate. We have limited visibility
into future customer demand and the product mix that our customers will require, which could adversely affect our revenue forecasts and
operating margins. Moreover, because our target markets are relatively new, many of our customers have difficulty accurately forecasting
their product requirements and estimating the timing of their new product introductions, which ultimately affects their demand for our
products. Historically, because of this limited visibility, actual results have been different from our forecasts of customer demand. Some of
these differences have been material, leading to excess inventory or product shortages and revenue and margin forecasts above those we
were actually able to achieve. These differences may occur in the future, and the adverse impact of these differences between forecasts and
actual results could grow if we are successful in selling more products to some customers. In addition, the rapid pace of innovation in our
industry could render significant portions of our inventory obsolete. Excess or obsolete inventory levels could result in unexpected
expenses or increases in our reserves that could adversely affect our business, operating results and financial condition. Conversely, if we
were to underestimate customer demand or if sufficient manufacturing capacity were unavailable, we could forego revenue opportunities,
potentially lose market share and damage our customer relationships. In addition, any significant future cancellations or deferrals of product
orders or the return of previously sold products due to manufacturing defects could materially and adversely impact our profit margins,
increase our write-offs due to product obsolescence and restrict our ability to fund our operations.

We may be subject to information technology failures, including data protection breaches and cyber-attacks, that could disrupt our

operations, damage our reputation and adversely affect our business, operations, and financial results.

We rely on our information technology systems for the effective operation of our business and for the secure maintenance and
storage of confidential data relating to our business and third-party businesses. Although we have implemented security controls to protect
our information technology systems, experienced programmers or hackers may be able to penetrate our security controls, and develop and
deploy viruses, worms and other malicious software programs that

compromise our confidential information or that of third parties and cause a disruption or failure of our information technology systems. In
addition, we have in the past and may in the future be subject to "phishing" attacks in which third parties send emails purporting to be from
reputable companies in order to obtain personal information and infiltrate our systems to initiate wire transfers or otherwise obtain
proprietary or confidential information. A number of large, public companies have recently experienced losses based on phishing attacks
and other cyber-attacks. Any compromise of our information technology systems could result in the unauthorized publication of our
confidential business or proprietary information, result in the unauthorized release of customer, supplier or employee data, result in a
violation of privacy or other laws, expose us to a risk of litigation, cause us to incur direct losses if attackers access our bank or investment
accounts, or damage our reputation. The cost and operational consequences of implementing further data protection measures either as a
response to specific breaches or as a result of evolving risks, could be significant. In addition, our inability to use or access our information
systems at critical points in time could adversely affect the timely and efficient operation of our business. Any delayed sales, significant
costs or lost customers resulting from these technology failures could adversely affect our business, operations and financial results.

Third parties with which we conduct business, such as foundries, assembly and test contractors, and distributors, have access to

certain portions of our sensitive data. In the event that these third parties do not properly safeguard our data that they hold, security
breaches could result and negatively impact our business, operations and financial results.

We rely on a limited number of third parties to manufacture, assemble and test our products, and the failure to manage our

relationships with our third-party contractors successfully could adversely affect our ability to market and sell our products.

We do not have our own manufacturing facilities. We operate an outsourced manufacturing business model that utilizes third-party
foundry and assembly and test capabilities. As a result, we rely on third-party foundry wafer fabrication, including sole sourcing for many
components or products. Currently, the majority of our products are manufactured by Global Foundries, Semiconductor Manufacturing
International Corporation, or SMIC, Taiwan Semiconductor Manufacturing Corp, or TSMC, and United Microelectronics Corporation, or
UMC, at foundries located in Taiwan, Singapore, and China. We also use third-party contractors for all of our assembly and test operations.

Relying on third party manufacturing, assembly and testing presents significant risks to us, including the following:

•

failure by us, our customers, or their end customers to qualify a selected
supplier;

capacity shortages during periods of high
demand;

reduced control over delivery schedules and
quality;

shortages of
materials;

• misappropriation of our intellectual

property;

•

limited warranties on wafers or products supplied to us;
and

potential increases in
prices.

The ability and willingness of our third-party contractors to perform is largely outside our control. If one or more of our contract

manufacturers or other outsourcers fails to perform its obligations in a timely manner or at satisfactory quality levels, our ability to bring
products to market and our reputation could suffer. For example, in the event that manufacturing capacity is reduced or eliminated at one or
more facilities, including as a response to the recent worldwide decline in the semiconductor industry, manufacturing could be disrupted,
we could have difficulties fulfilling our customer orders and our net revenue could decline. In addition, if these third parties fail to deliver
quality products and components on time and at reasonable prices, we could have difficulties fulfilling our customer orders, our net revenue
could decline and our business, financial condition and results of operations would be adversely affected.

Additionally, our manufacturing capacity may be similarly reduced or eliminated at one or more facilities due to the fact that our
fabrication and assembly and test contractors are all located in the Pacific Rim region, principally in China, Taiwan, and Singapore. The
risk of earthquakes in these geographies is significant due to the proximity of major earthquake fault lines, and Taiwan in particular is also
subject to typhoons and other Pacific storms. Earthquakes, fire, flooding, or other natural disasters in Taiwan or the Pacific Rim region, or
political unrest, war, labor strikes, work stoppages or public health crises, such as outbreaks of H1N1 flu, in countries where our
contractors’ facilities are located could result in the disruption of our foundry, assembly or test capacity. Any disruption resulting from
these events could cause significant delays in shipments of our

products until we are able to shift our manufacturing, assembly or test from the affected contractor to another third-party vendor. There can
be no assurance that alternative capacity could be obtained on favorable terms, if at all.

We do not have any long-term supply contracts with our contract manufacturers or suppliers, and any disruption in our supply of

products or materials could have a material adverse effect on our business, revenue and operating results.

We currently do not have long-term supply contracts with any of our third-party vendors, including but, not limited to Global
Foundries, SMIC, TSMC, and UMC. We make substantially all of our purchases on a purchase order basis, and our contract manufacturers
are not required to supply us products for any specific period or in any specific quantity. Foundry capacity may not be available when we
need it or at reasonable prices. Availability of foundry capacity has in the past been reduced from time to time due to strong demand.
Foundries can allocate capacity to the production of other companies’ products and reduce deliveries to us on short notice. It is possible that
foundry customers that are larger and better financed than we are, or that have long-term agreements with our foundry, may induce our
foundry to reallocate capacity to them. This reallocation could impair our ability to secure the supply of components that we need. We
generally place orders for products with some of our suppliers approximately four to five months prior to the anticipated delivery date, with
order volumes based on our forecasts of demand from our customers. Accordingly, if we inaccurately forecast demand for our products, we
may be unable to obtain adequate and cost-effective foundry or assembly capacity from our third-party contractors to meet our customers’
delivery requirements, or we may accumulate excess inventories. On occasion, we have been unable to adequately respond to unexpected
increases in customer purchase orders and therefore were unable to benefit from this incremental demand. None of our third-party
contractors has provided any assurance to us that adequate capacity will be available to us within the time required to meet additional
demand for our products.

We may have difficulty accurately predicting our future revenue and appropriately budgeting our expenses particularly as we seek

to enter new markets where we may not have prior experience.

Our recent operating history has focused on developing integrated circuits for specific terrestrial, cable and satellite television, and
broadband voice and data applications, and as part of our strategy, we seek to expand our addressable market into new product categories.
For example, we previously expanded into the market for satellite set-top and gateway boxes and outdoor units and physical medium
devices for the optical interconnect markets, and entered the markets for wireless telecommunications infrastructure. We have expanded
into the wired whole-home broadband connectivity market. We also entered the markets for power management and interface technologies
which are ubiquitous functions in wireless and wireline communications infrastructure, broadband access, industrial, enterprise network,
and automotive applications. Our limited operating experience in these new markets or potential markets we may enter, combined with the
rapidly evolving nature of our markets in general, substantial uncertainty concerning how these markets may develop and other factors
beyond our control, reduces our ability to accurately forecast quarterly or annual revenue. If our revenue does not increase as anticipated,
we could incur significant losses due to our higher expense levels if we are not able to decrease our expenses in a timely manner to offset
any shortfall in future revenue.

If we are unable to attract, train and retain qualified personnel, especially our design and technical personnel, we may not be able to

execute our business strategy effectively.

Our future success depends on our ability to retain, attract and motivate qualified personnel, including our management, sales and

marketing and finance, and especially our design and technical personnel. We do not know whether we will be able to attract and retain all
of these personnel as we continue to pursue our business strategy. Historically, we have encountered difficulties in hiring and retaining
qualified engineers because there is a limited pool of engineers with the expertise required in our field. Competition for these personnel is
intense in the semiconductor industry. As the source of our technological and product innovations, our design and technical personnel
represent a significant asset. In addition, two of our current executives, our chief financial officer and chief corporate strategy officer and
our vice president of sales, joined us in July 2018. As new employees gain experience in their roles, we could experience inefficiencies or a
lack of business continuity due to loss of historical knowledge and a lack of familiarity of new employees with business processes,
operating requirements, policies and procedures, and we may experience additional costs as new employees gain necessary experience. It is
important to our success that these key employees quickly adapt to and excel in their new roles. If they are unable to do so, our business and
financial results could be materially adversely affected. The loss of the services of one or more of our key employees, especially our key
design and technical personnel, or our inability to retain, attract and motivate qualified design and technical personnel, could have a
material adverse effect on our business, financial condition and results of operations.

Our business would be adversely affected by the departure of existing members of our senior management team.

Our success depends, in large part, on the continued contributions of our senior management team. None of our senior management
team is bound by written employment contracts to remain with us for a specified period. In addition, we have not entered into non-compete
agreements with members of our senior management team. We are fortunate that many members of our executive management team have
long tenures with us, but from time to time we also have been required to recruit new executive officers. For example, two of our current
executives, our chief financial officer and chief corporate strategy officer and our vice president of sales, joined us in July 2018. With
respect to executive officer recruitment and retention, we need to ensure that our executive compensation programs provide sufficient
recruitment and retention incentives as well as incentives to achieve our long-term strategic business and financial objectives. We expect
competition for individuals with our required skill sets, particularly technical and engineering skills, to remain intense even in weak global
macroeconomic environments. The loss of any member of our senior management team could harm our ability to implement our business
strategy and respond to the rapidly changing market conditions in which we operate.

Our customers require our products and our third-party contractors to undergo a lengthy and expensive qualification process which

does not assure product sales.

Prior to purchasing our products, our customers require that both our products and our third-party contractors undergo extensive

qualification processes, which involve testing of the products in the customer’s system and rigorous reliability testing. This qualification
process may continue for six months or more. However, qualification of a product by a customer does not assure any sales of the product to
that customer. Even after successful qualification and sales of a product to a customer, a subsequent revision our solutions, or changes in
our customer’s manufacturing process or our selection of a new supplier may require a new qualification process, which may result in
delays and in us holding excess or obsolete inventory. After our products are qualified, it can take six months or more before the customer
commences volume production of components or devices that incorporate our products. Despite these uncertainties, we devote substantial
resources, including design, engineering, sales, marketing and management efforts, to qualifying our products with customers in
anticipation of sales. If we are unsuccessful or delayed in qualifying any of our products with a customer, sales of this product to the
customer may be precluded or delayed, which may impede our growth and cause our business to suffer.

Winning business is subject to lengthy competitive selection processes that require us to incur significant expenditures. Even if we

begin a product design, customers may decide to cancel or change their product plans, which could cause us to generate no revenue from a
product and adversely affect our results of operations.

We are focused on securing design wins to develop RF receivers and RF receiver SoCs, MoCA and G.hn SoCs, DBS-ODU SoCs,

physical medium devices for optical modules, interface and power management devices, and SoC solutions targeting infrastructure
opportunities within the telecommunications, wireless, industrial and multimarket and broadband operator markets for use in our
customers’ products. These selection processes typically are lengthy and can require us to incur significant design and development
expenditures and dedicate scarce engineering resources in pursuit of a single customer opportunity. We may not win the competitive
selection process and may never generate any revenue despite incurring significant design and development expenditures. These risks are
exacerbated by the fact that some of our customers’ products likely will have short life cycles. Failure to obtain a design win could prevent
us from offering an entire generation of a product, even though this has not occurred to date. This could cause us to lose revenue and
require us to write off obsolete inventory, and could weaken our position in future competitive selection processes. After securing a design
win, we may experience delays in generating revenue from our products as a result of the lengthy development cycle typically required.
Our customers generally take a considerable amount of time to evaluate our products. The typical time from early engagement by our sales
force to actual product introduction runs from nine to twelve months for the consumer market, to as much as 18 to 24 months for the
satellite markets, and 36 months or longer for industrial, wired and wireless infrastructure markets. The delays inherent in these lengthy
sales cycles increase the risk that a customer will decide to cancel, curtail, reduce or delay its product plans, causing us to lose anticipated
sales. In addition, any delay or cancellation of a customer’s plans could materially and adversely affect our financial results, as we may
have incurred significant expense and generated no revenue. Finally, our customers’ failure to successfully market and sell their products
could reduce demand for our products and materially and adversely affect our business, financial condition and results of operations. If we
were unable to generate revenue after incurring substantial expenses to develop any of our products, our business would suffer.

Our operating results are subject to substantial quarterly and annual fluctuations and may fluctuate significantly due to a number of

factors that could adversely affect our business and our stock price.

Our revenue and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations may occur

on a quarterly and on an annual basis and are due to a number of factors, many of which are beyond our control. These factors include,
among others:

•

changes in end-user demand for the products manufactured and sold by our
customers;

the receipt, reduction or cancellation of significant orders by
customers;

fluctuations in the levels of component inventories held by our
customers;

the gain or loss of significant
customers;

market acceptance of our products and our customers’
products;

our ability to develop, introduce and market new products and technologies on a timely
basis;

the timing and extent of product development
costs;

new product announcements and introductions by us or our
competitors;

incurrence of research and development and related new product
expenditures;

seasonality or cyclical fluctuations in our
markets;

currency
fluctuations;

fluctuations in IC manufacturing
yields;

significant warranty claims, including those not covered by our
suppliers;

changes in our product mix or customer
mix;

intellectual property
disputes;

loss of key personnel or the shortage of available skilled
workers;

impairment of long-lived assets, including masks and production equipment;
and

the effects of competitive pricing pressures, including decreases in average selling prices of our
products.

These factors are difficult to forecast, and these, as well as other factors, could materially adversely affect our quarterly or annual

operating results. We typically are required to incur substantial development costs in advance of a prospective sale with no certainty that we
will ever recover these costs. A substantial amount of time may pass between a design win and the generation of revenue related to the
expenses previously incurred, which can potentially cause our operating results to fluctuate significantly from period to period. In addition,
a significant amount of our operating expenses are relatively fixed in nature due to our significant sales, research and development costs.
Any failure to adjust spending quickly enough to compensate for a revenue shortfall could magnify its adverse impact on our results of
operations.

We are subject to the cyclical nature of the semiconductor industry.

The semiconductor industry is highly cyclical and is characterized by constant and rapid technological change, rapid product

obsolescence and price erosion, evolving standards, short product life cycles and wide fluctuations in product supply and demand. Any
future downturns may result in diminished product demand, production overcapacity, high inventory levels and accelerated erosion of
average selling prices. Furthermore, any upturn in the semiconductor industry could result in increased competition for access to third-party
foundry and assembly capacity. We are dependent on the availability of this capacity to manufacture and assemble all of our products.

None of our third-party foundry or assembly contractors has provided assurances that adequate capacity will be available to us in the
future. A significant downturn or upturn could have a material adverse effect on our business and operating results.

The use of open source software in our products, processes and technology may expose us to additional risks and harm our

intellectual property.

Our products, processes and technology sometimes utilize and incorporate software that is subject to an open source license. Open
source software is typically freely accessible, usable and modifiable. Certain open source software licenses require a user who intends to
distribute the open source software as a component of the user’s software to disclose publicly part or all of the source code to the user’s
software. In addition, certain open source software licenses require the user of such software to make any derivative works of the open
source code available to others on unfavorable terms or at no cost. This can subject previously proprietary software to open source license
terms.

While we monitor the use of all open source software in our products, processes and technology and try to ensure that no open source

software is used in such a way as to require us to disclose the source code to the related product, processes or technology when we do not
wish to do so, such use could inadvertently occur. Additionally, if a third party software provider has incorporated certain types of open
source software into software we license from such third party for our products, processes or technology, we could, under certain
circumstances, be required to disclose the source code to our products, processes or technology. This could harm our intellectual property
position and have a material adverse effect on our business, results of operations and financial condition.

We rely on third parties to provide services and technology necessary for the operation of our business. Any failure of one or more

of our partners, vendors, suppliers or licensors to provide these services or technology could have a material adverse effect on our
business.

We rely on third-party vendors to provide critical services, including, among other things, services related to accounting, billing,

human resources, information technology, network development, network monitoring, in-licensing and intellectual property that we cannot
or do not create or provide ourselves. We depend on these vendors to ensure that our corporate infrastructure will consistently meet our
business requirements. The ability of these third-party vendors to successfully provide reliable and high quality services is subject to
technical and operational uncertainties that are beyond our control. While we may be entitled to damages if our vendors fail to perform
under their agreements with us, our agreements with these vendors limit the amount of damages we may receive. In addition, we do not
know whether we will be able to collect on any award of damages or that these damages would be sufficient to cover the actual costs we
would incur as a result of any vendor’s failure to perform under its agreement with us. Any failure of our corporate infrastructure could
have a material adverse effect on our business, financial condition and results of operations. Upon expiration or termination of any of our
agreements with third-party vendors, we may not be able to replace the services provided to us in a timely manner or on terms and
conditions, including service levels and cost, that are favorable to us and a transition from one vendor to another vendor could subject us to
operational delays and inefficiencies until the transition is complete.

Additionally, we incorporate third-party technology into and with some of our products, and we may do so in future products. The
operation of our products could be impaired if errors occur in the third-party technology we use. It may be more difficult for us to correct
any errors in a timely manner if at all because the development and maintenance of the technology is not within our control. There can be
no assurance that these third parties will continue to make their technology, or improvements to the technology, available to us, or that they
will continue to support and maintain their technology. Further, due to the limited number of vendors of some types of technology, it may
be difficult to obtain new licenses or replace existing technology. Any impairment of the technology or our relationship with these third
parties could have a material adverse effect on our business.

Unanticipated changes in our tax rates or unanticipated tax obligations could affect our future results.

We are subject to income taxes in the United States, Singapore and various other foreign jurisdictions. The amount of income taxes

we pay is subject to our interpretation and application of tax laws in jurisdictions in which we file. Changes in current or future laws or
regulations, the imposition of new or changed tax laws or regulations or new interpretations by taxing authorities or courts could affect our
results of operations and lead to volatility with respect tax expenses and liabilities from period to period. The application of tax laws and
related regulations is subject to legal and factual interpretation, judgment and uncertainty. We cannot determine whether any legislative
proposals may be enacted into law or what, if any, changes may be made to such proposals prior to their being enacted into law. If U.S. or
international tax laws change in a manner that increases our tax obligation, it could result in a material adverse impact on our net income
and our financial position. Furthermore, such material adverse impact may extend beyond one fiscal year. For example, on December 22,
2017, the Tax Cuts and Jobs Act, or the Tax Act, was enacted into U.S. tax law. Also on December 22, 2017, the SEC issued guidance in
Staff Accounting Bulletin No. 118, or SAB 118, to address certain fact patterns where the accounting for changes in tax laws or tax rates
under ASC Topic

740 is incomplete upon issuance of an entity's financial statements for the reporting period in which the Tax Act is enacted. As permitted in
SAB 118, in 2017, we took a measurement period approach and reported certain provisional amounts, based on reasonable estimates, for
certain tax effects in which the accounting under ASC 740 was incomplete. Such provisional amounts were subject to adjustment during a
limited measurement period, not to extend one year beyond the tax law enactment date. We completed the accounting required under ASC
740 in 2018; however as new guidance and interpretations of the tax law become available, any further adjustments related to the enacted
tax laws could result in a material adverse impact on our net income and our financial position in fiscal 2019.

We are subject to examinations and tax audits. There can be no assurance that the outcome from these audits will not have an

adverse effect on our operating results or financial position.

We adopted amendments to U.S. generally accepted accounting principles related to stock-based compensation in the second quarter

of 2016 and included excess tax benefits associated with employee stock-based compensation in income tax expense. However, since the
amount of such excess tax benefits and deficiencies depend on the fair market value of our common stock, our income tax provision is
subject to volatility in our stock price and in the future, could unfavorably affect our future effective tax rate.

Our future effective tax rate could be unfavorably affected by unanticipated changes in the valuation of our deferred tax assets and

liabilities, and the ultimate use and depletion of these various tax credits and net operating loss carryforwards. Changes in our effective tax
rate, including those from enactment of the Tax Act in 2017, could have a material adverse impact on our results of operations. We record a
valuation allowance to reduce our net deferred tax assets to the amount that we believe is more likely than not to be realized. In making
such determination, the Company considers all available positive and negative evidence quarterly, including scheduled reversals of
deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance. To the extent we believe
it is more likely than not that some portion of our deferred tax assets will not be realized, we record a valuation allowance against the
deferred tax asset. Realization of our deferred tax assets is dependent primarily upon future taxable income in the applicable jurisdiction.
During the quarter ended June 30, 2017, we released the valuation allowance against certain U.S. federal deferred tax assets. During the
quarter ended December 31, 2018, we reduced the valuation allowance on certain additional U.S. federal deferred tax assets, based on the
finalization of our provisional estimates for the effect of the Tax Act on future U.S. taxable income projections. Based upon our review of
all positive and negative evidence, we concluded that a full valuation allowance should continue to be recorded against our state and certain
federal and foreign net deferred tax assets at December 31, 2018. On a periodic basis we evaluate our deferred tax assets for realizability.
The impact of releasing some or all of such valuation allowance in a future period could be material in the period in which such release
occurs.

Our corporate income tax liability could materially increase if tax incentives we have negotiated in Singapore cease to be effective

or applicable or if we are challenged on our use of such incentives.

Effective in the second quarter of 2017, we began to operate under certain favorable tax incentives in Singapore, which are effective

through March 2022 and may be extended through March 2027, and generally are dependent on our meeting certain headcount and
investment thresholds. Such incentives allow certain qualifying income earned in Singapore to be taxed at reduced rates and are conditional
upon our meeting certain employment and investment thresholds over time. If we fail to satisfy the conditions for receipt of these tax
incentives, or to the extent US or other tax authorities challenge our operation under these favorable tax incentive programs or our
intercompany transfer pricing agreements, our taxable income could be taxed at higher federal or foreign statutory rates and our income tax
liability and expense could materially increase beyond our projections. Each of our Singapore tax incentives is separate and distinct from
the others, and may be granted, withheld, extended, modified, truncated, complied with or terminated independently without any effect on
the other incentives. Absent these tax incentives, our corporate income tax rate in Singapore would generally be the 17% statutory tax rate.
We are also subject to operating and other compliance requirements to maintain our favorable tax incentives. If we fail to comply with such
requirements, we could lose the tax benefits and could possibly be required to refund previously realized material tax benefits.
Additionally, in the future, we may fail to qualify for renewal of our favorable tax incentives or such incentives may not be available to us,
which could also cause our future taxable income to increase and be taxed at higher statutory rates. Loss of one more of our tax incentives
could cause us to modify our tax strategies and our operational structure, which could cause disruption in our business and have a material
adverse impact on our results of operations. Further, there can be no guarantee that such modification in our tax strategy will yield tax
incentives as favorable as those we have negotiated with Singapore. Our interpretations and conclusions regarding the tax incentives are
not binding on any taxing authority, and if our assumptions about tax and other laws are incorrect or if these tax incentives are substantially
modified or rescinded we could suffer material adverse tax and other financial consequences, which would increase our expenses, reduce
our profitability and adversely affect our cash flows.

Global economic conditions, including factors that adversely affect consumer spending for the products that incorporate our

integrated circuits, could adversely affect our revenues, margins, and operating results.

Our products are incorporated in numerous consumer devices, and demand for such products will ultimately be driven by consumer
demand for products such as televisions, personal computers, automobiles, cable modems, smartphones, and set-top boxes. Many of these
purchases are discretionary. Global economic volatility and economic volatility in the specific markets in which the devices that
incorporate our products are ultimately sold can cause extreme difficulties for our customers and third-party vendors in accurately
forecasting and planning future business activities. This unpredictability could cause our customers to reduce spending on our products,
which would delay and lengthen sales cycles. Furthermore, during challenging economic times our customers may face challenges in
gaining timely access to sufficient credit, which could impact their ability to make timely payments to us. These events, together with
economic volatility that may face the broader economy and, in particular, the semiconductor and communications industries, may
adversely affect, our business, particularly to the extent that consumers decrease their discretionary spending for devices deploying our
products.

Our business, financial condition and results of operations could be adversely affected by the political and economic conditions of

the countries in which we conduct business and other factors related to our international operations.

We sell our products throughout the world. Products shipped to Asia accounted for 81% of our net revenue in the year ended
December 31, 2018. In addition, approximately 51% of our employees are located outside of the United States as of December 31, 2018.
The majority of our products are manufactured, assembled and tested in Asia, and all of our major distributors are located in Asia. Multiple
factors relating to our international operations and to particular countries in which we operate could have a material adverse effect on our
business, financial condition and results of operations. These factors include:

•

changes in political, regulatory, legal or economic
conditions;

restrictive governmental actions, such as restrictions on the transfer or repatriation of funds and foreign investments and trade
protection measures, including export duties and quotas and customs duties and tariffs;

disruptions of capital and trading
markets;

changes in import or export licensing
requirements;

transportation
delays;

civil disturbances or political
instability;

geopolitical turmoil, including terrorism, war or political or military
coups;

public health
emergencies;

differing employment practices and labor
standards;

limitations on our ability under local laws to protect our intellectual
property;

local business and cultural factors that differ from our customary standards and
practices;

nationalization and
expropriation;

changes in tax
laws;

currency fluctuations relating to our international operating activities;
and

difficulty in obtaining distribution and
support.

In addition to a significant portion of our wafer supply coming from Taiwan, Singapore, and China, substantially all of our products

undergo packaging and final testing in Taiwan, Singapore, China, South Korea, and Thailand. Any conflict or uncertainty in these
countries, including due to natural disaster or public health or safety concerns, could have a material adverse effect on our business,
financial condition and results of operations. In addition, if the government of any country in which our products are manufactured or sold
sets technical standards for products manufactured in or imported into their country that are not widely shared, it may lead some of our
customers to suspend imports of their products into that country,

require manufacturers in that country to manufacture products with different technical standards and disrupt cross-border manufacturing
relationships which, in each case, could have a material adverse effect on our business, financial condition and results of operations. We
also are subject to risks associated with international political conflicts involving the U.S. government. For example, in 2008, we were
instructed by the U.S. Department of Homeland Security to cease using Polar Star International Company Limited, a distributor based in
Hong Kong that delivered third-party products, to a political group that the U.S. government did not believe should have been provided
with the products in question. As a result, we immediately ceased all business operations with that distributor. Similarly, we ceased
business operations with entities affiliated with ZTE Corp. when the Bureau of Industry and Security at the U.S. Department of Commerce
imposed an export licensing requirement, which was subsequently suspended through March 28, 2017. Such suspension was lifted as of
March 29, 2017, however on April 17, 2018 the U.S. Department of Commerce imposed a seven-year export ban on ZTE, which was
subsequently lifted as of July 13, 2018. Although we do not have significant sales to ZTE, we cannot provide assurances that similar
disruptions in the future of distribution arrangements or the imposition of governmental prohibitions on selling our products to particular
customers will not adversely affect our revenues and operating results. Loss of a key distributor or customer under similar circumstances
could have an adverse effect on our business, revenues and operating results.

Changes in trade policies among the United States and other countries, in particular the imposition of new or higher tariffs, could

place pressure on our average selling prices as our customers seek to offset the impact of increased tariffs on their own products.
Increased tariffs or the imposition of other barriers to international trade could have a material adverse effect on our revenues and
operating results.

In recent months, the United States has imposed or proposed new or higher tariffs on certain products exported by a number of U.S.

trading partners, including China, Europe, Canada, and Mexico. In response, many of those trading partners, including China, have
imposed or proposed new or higher tariffs on American products. Continuing changes in government trade policies create a heightened risk
of further increased tariffs that impose barriers to international trade. Our business and operating results are substantially dependent on
international trade, particularly involving the sale of our products into China. Approximately 63% of our total revenues in the year ended
December 31, 2018 consisted of sales of our integrated circuits to both Original Equipment Manufacturers (OEMs) and Ordinary Device
Manufacturers (ODMs) in China. Many of these manufacturers sell products incorporating our semiconductors into other international
markets, including the United States.

Tariffs on our customers’ products may adversely affect our gross profit margins in the future due to the potential for increased
pressure on our selling prices by customers seeking to offset the impact of tariffs on their own products. In addition, tariffs could make our
OEM and ODM customers’ products less attractive relative to products offered by their competitors, which may not be subject to similar
tariffs. Some OEM and ODMs in our industry have already begun implementing short-term price adjustments to offset such tariffs and
transitioning their production and supply chain to locations outside of China. We believe that increases in tariffs on imported goods or the
failure to resolve current international trade disputes could have a material adverse effect on our business and operating results.

Our business is subject to various governmental regulations, and compliance with these regulations may cause us to incur
significant expenses. If we fail to maintain compliance with applicable regulations, we may be forced to recall products and cease their
manufacture and distribution, and we could be subject to civil or criminal penalties.

Our business is subject to various international and U.S. laws and other legal requirements, including packaging, product content,

labor, import/export control regulations, the Foreign Corrupt Practices Act, and other anticorruption laws. These regulations are complex,
change frequently and have generally become more stringent over time. We may be required to incur significant costs to comply with these
regulations or to remedy violations. Any failure by us to comply with applicable government regulations could result in cessation of our
operations or portions of our operations, product recalls or impositions of fines and restrictions on our ability to conduct our operations. In
addition, because many of our products are regulated or sold into regulated industries, we must comply with additional regulations in
marketing our products.

Our products and operations are also subject to the rules of industrial standards bodies, like the International Standards Organization,

as well as regulation by other agencies, such as the U.S. Federal Communications Commission. If we fail to adequately address any of
these rules or regulations, our business could be harmed.

For example, as indicated elsewhere in this report, we do a substantial portion of our business in Asia and particularly in China. In
recent years, there has been a substantial focus by regulators in the United States and Europe on the business practices of major Chinese
technology companies such as Huawei and ZTE. Huawei and ZTE are each our current customers. While we intend to conduct our
businesses in compliance with all applicable laws, including laws relating to export controls and anti-corruption, it is possible that the
nature of our business and customers could result in a review of our relationships and practices

by regulatory authorities. We could incur increased administrative and legal costs in order to respond to any inquiries, and any failure to
comply with applicable laws could adversely affect our business and operating results. We have implemented policies and procedures,
including adoption of an anti-corruption policy and procedures to ensure compliance with applicable export control laws, but there can be
no assurance that these policies and procedures will prove effective.

We must conform the manufacture and distribution of our semiconductors to various laws and adapt to regulatory requirements in all
countries as these requirements change. If we fail to comply with these requirements in the manufacture or distribution of our products, we
could be required to pay civil penalties, face criminal prosecution and, in some cases, be prohibited from distributing our products in
commerce until the products or component substances are brought into compliance.

If we suffer losses to our facilities or distribution system due to catastrophe, our operations could be seriously harmed.

Our facilities and distribution system, and those of our third-party contractors, are subject to risk of catastrophic loss due to fire,

flood or other natural or man-made disasters. A number of our facilities and those of our contract manufacturers are located in areas with
above average seismic activity. The risk of an earthquake in the Pacific Rim region or Southern California is significant due to the
proximity of major earthquake fault lines. Any catastrophic loss to any of these facilities would likely disrupt our operations, delay
production, shipments and revenue and result in significant expenses to repair or replace the facility. The majority of the factories we use
for foundry, assembly and test, and warehousing services, are located in Asia, principally in China, Taiwan, and Singapore. Our corporate
headquarters is located in Southern California. Our operations and financial condition could be seriously harmed in the event of a major
earthquake, fire, or other natural or man-made disaster.

Investor confidence may be adversely impacted if we are unable to comply with Section 404 of the Sarbanes-Oxley Act of 2002, and

as a result, our stock price could decline.

We are subject to rules adopted by the Securities Exchange Commission, or SEC, pursuant to Section 404 of the Sarbanes-Oxley Act

of 2002, or Sarbanes-Oxley Act, which require us to include in our Annual Report on Form 10-K our management’s report on, and
assessment of the effectiveness of, our internal controls over financial reporting.

If we fail to maintain the adequacy of our internal controls, there is a risk that we will not comply with all of the requirements

imposed by Section 404. Moreover, effective internal controls, particularly those related to revenue recognition, are necessary for us to
produce reliable financial reports and are important to helping prevent financial fraud. Any of these possible outcomes could result in an
adverse reaction in the financial marketplace due to a loss of investor confidence in the reliability of our consolidated financial statements
and could result in investigations or sanctions by the SEC, the New York Stock Exchange, or NYSE, or other regulatory authorities or in
stockholder litigation. Any of these factors ultimately could harm our business and could negatively impact the market price of our
securities. Ineffective control over financial reporting could also cause investors to lose confidence in our reported financial information,
which could adversely affect the trading price of our common stock.

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives. However, our

management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and
procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that
there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in
all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been
detected.

Our products must conform to industry standards in order to be accepted by end users in our markets.

Generally, our products comprise only a part or parts of a communications device. All components of these devices must uniformly

comply with industry standards in order to operate efficiently together. We depend on companies that provide other components of the
devices to support prevailing industry standards. Many of these companies are significantly larger and more influential in driving industry
standards than we are. Some industry standards may not be widely adopted or implemented uniformly, and competing standards may
emerge that may be preferred by our customers or end users. If larger companies do not support the same industry standards that we do, or
if competing standards emerge, market acceptance of our products could be adversely affected, which would harm our business.

Products for communications applications are based on industry standards that are continually evolving. Our ability to compete in

the future will depend on our ability to identify and ensure compliance with these evolving industry standards. The emergence of new
industry standards could render our products incompatible with products developed by other suppliers. As a

result, we could be required to invest significant time and effort and to incur significant expense to redesign our products to ensure
compliance with relevant standards. If our products are not in compliance with prevailing industry standards for a significant period of time,
we could miss opportunities to achieve crucial design wins. We may not be successful in developing or using new technologies or in
developing new products or product enhancements that achieve market acceptance. Our pursuit of necessary technological advances may
require substantial time and expense.

Risks Relating to Our Common Stock

Our management team may use our available cash and cash equivalents in ways with which you may not agree or in ways which

may not yield a return.

We use our cash and cash equivalents for general corporate purposes, including working capital and for repayment of outstanding
long-term debt. We may also use a portion of these assets to acquire complementary businesses, products, services or technologies. Our
management has considerable discretion in the application of our cash and cash equivalents, and resources, and you will not have the
opportunity to assess whether these liquid assets are being used in a manner that you deem best to maximize your return. We may use our
available resources for corporate purposes that do not increase our operating results or market value. In addition, in the future our cash and
cash equivalents, and resources may be placed in investments that do not produce significant income or that may lose value.

Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult, limit

attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.

Provisions in our certificate of incorporation and bylaws, as amended and restated, may have the effect of delaying or preventing a

change of control or changes in our management. These provisions provide for the following:

•

authorize our Board of Directors to issue, without further action by the stockholders, up to 25,000,000 shares of undesignated
preferred stock;

require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written
consent;

specify that special meetings of our stockholders can be called only by our Board of Directors, our Chairman of the Board of
Directors, or our President;

establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders,
including proposed nominations of persons for election to our Board of Directors;

establish that our Board of Directors is divided into three classes, Class I, Class II and Class III, with each class serving
staggered terms;

provide that our directors may be removed only for
cause;

provide that vacancies on our Board of Directors may be filled only by a majority of directors then in office, even though less
than a quorum;

specify that no stockholder is permitted to cumulate votes at any election of directors;
and

require supermajority votes of the holders of our common stock to amend specified provisions of our charter
documents.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making

it more difficult for stockholders to replace members of our Board of Directors, which is responsible for appointing the members of our
management. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware
General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business
combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an
“interested” stockholder.

Our share price may be volatile as a result of limited trading volume and other factors.

An active public market for our shares on the New York Stock Exchange may not be sustained. In particular, we have experienced
limited trading volumes and liquidity in the past, and similar issues in the future could limit the ability of stockholders to purchase or sell
our common stock in the amounts and at the times they wish. Trading volume in our common stock is sometimes modest relative to our
total outstanding shares, and the price of our common stock may fluctuate substantially (particularly in percentage terms) without regard to
news about us or general trends in the stock market. An inactive market may also impair our ability to raise capital to continue to fund
operations by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration.

In addition, the trading price of our common stock could become highly volatile and could be subject to wide fluctuations in
response to various factors, some of which are beyond our control. These factors include those discussed in this “Risk Factors” section of
the Annual Report on Form 10-K and others such as:

•

actual or anticipated fluctuations in our financial condition and operating
results;

overall conditions in the semiconductor
market;

addition or loss of significant
customers;

changes in laws or regulations applicable to our
products;

actual or anticipated changes in our growth rate relative to our
competitors;

announcements of technological innovations by us or our
competitors;

announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital
commitments;

additions or departures of key
personnel;

competition from existing products or new products that may
emerge;

issuance of new or updated research or reports by securities
analysts;

fluctuations in the valuation of companies perceived by investors to be comparable to
us;

disputes or other developments related to proprietary rights, including patents, litigation matters and our ability to obtain
intellectual property protection for our technologies;

the recently completed acquisitions may not be accretive and may cause dilution to our earnings per
shares;

announcement or expectation of additional financing
efforts;

sales of our common stock by us or our
stockholders;

share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;
and

general economic and market
conditions.

Furthermore, the stock markets recently have experienced extreme price and volume fluctuations that have affected and continue to

affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the
operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political and market
conditions such as recessions, interest rate changes or international currency fluctuations, may negatively impact the market price of our
common stock. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class
action litigation. We have been and may continue to be the target of this type of litigation in the future. Securities litigation against us could
result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.

If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our

business, our share price and trading volume could decline.

The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish

about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade our
shares or change their opinion of our shares, our share price would likely decline. If one or more of these analysts cease coverage of our
Company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or
trading volume to decline.

Future sales of our common stock in the public market could cause our share price to decline.

Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur,

could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity
securities. As of December 31, 2018, we had 69.6 million shares of common stock outstanding.

All shares of common stock are freely tradable without restrictions or further registration under the Securities Act of 1933, as

amended, or the Securities Act, unless held by our “affiliates,” as that term is defined under Rule 144 of the Securities Act.

Our Executive Incentive Bonus Plan permits the settlement of awards under the plan in the form of shares of our common stock. We

have issued shares of our common stock to settle such bonus awards for our employees, including executives, for the 2014 to 2017
performance periods, and we intend to continue this practice in the foreseeable future. We issued 0.3 million shares of our common stock
for the 2017 performance period in February 2018. If we issue additional shares of our common stock to settle bonus awards in the future,
such shares may be freely sold in the public market immediately following the issuance of such shares, subject to the applicable conditions
of Rule 144 and our insider trading policy, and the issuance of such shares may have an adverse effect on our share price once they are
issued.

We do not intend to pay dividends for the foreseeable future.

We have never declared or paid any cash dividends on our common stock and do not intend to pay any cash dividends in the
foreseeable future. We anticipate that we will retain all of our future earnings for use in the development of our business and for general
corporate purposes. Any determination to pay dividends in the future will be at the discretion of our Board of Directors. Accordingly,
investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future
gains on their investments.

Risks Relating to Our Acquisitions

In addition to our completed acquisitions, we may, from time to time, make additional business acquisitions or investments, which

involve significant risks.

We have completed acquisitions in recent years and may, from time to time, make acquisitions, enter into alliances or make
investments in other businesses to complement our existing product offerings, augment our market coverage or enhance our technological
capabilities. However, any such transactions could result in:

•

issuances of equity securities dilutive to our existing
stockholders;

substantial cash
payments;

the incurrence of substantial debt and assumption of unknown
liabilities;

large one-time write-
offs;

amortization expenses related to intangible
assets;

a limitation on our ability to use our net operating loss
carryforwards;

the diversion of management's time and attention from operating our business to acquisition integration
challenges;

stockholder or other litigation relating to the
transaction;

•

adverse tax consequences;
and

the potential loss of key employees, customers and suppliers of the acquired
businesses.

Additionally, in periods subsequent to an acquisition, we must evaluate goodwill and acquisition-related intangible assets for

impairment. If such assets are found to be impaired, they will be written down to estimated fair value, with a charge against earnings.

Integrating acquired organizations and their products and services, including the integration of completed acquisitions, may be
expensive, time-consuming and a strain on our resources and our relationships with employees, customers, distributors and suppliers, and
ultimately may not be successful. The benefits or synergies we may expect from the acquisition of complementary or supplementary
businesses may not be realized to the extent or in the time frame we initially anticipate. Some of the risks that may affect our ability to
successfully integrate acquired businesses include those associated with:

•

failure to successfully further develop the acquired products or
technology;

conforming the acquired company’s standards, policies, processes, procedures and controls with our
operations;

coordinating new product and process development, especially with respect to highly complex
technologies;

loss of key employees or customers of the acquired
company;

hiring additional management and other critical
personnel;

in the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the
particular economic, currency, political and regulatory risks associated with specific countries;

increasing the scope, geographic diversity and complexity of our
operations;

consolidation of facilities, integration of the acquired company’s accounting, human resource and other administrative
functions and coordination of product, engineering and sales and marketing functions;

the geographic distance between the
companies;

liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims,
violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities; and

litigation or other claims in connection with the acquired company, including claims for terminated employees, customers,
former stockholders or other third parties.

On or about August 2, 2016, Trango Systems, Inc., or Trango, filed a complaint in the Superior Court of California, County of San

Diego, Central Division, against defendants Broadcom Corporation, Inc., or Broadcom, and us, collectively, Defendants. Trango is a
purchaser that alleges various fraud, breach of contract, and interference with economic relations claims in connection with the
discontinuance of a chip line we acquired from Broadcom in 2016. Trango seeks unspecified general and special damages, pre-judgment
interest, expenses and costs, attorneys’ fees, punitive damages, and unspecified injunctive and equitable relief. On June 23, 2017, the Court
sustained our demurrer to each cause of action in the second amended complaint, filed on or about December 6, 2016. Trango filed its third
amended complaint on or about July 13, 2017. On February 23, 2018, the Court sustained, in part, our demurrer, dismissing with prejudice
the cause of action for breach of a written contract, and Trango voluntarily dismissed its cause of action for breach of an implied-in-fact
contract. The remaining causes of action have been permitted to proceed. On March 15, 2018, Trango filed its fourth amended complaint.
We filed our answer on April 17, 2018. Also, on April 17, Broadcom filed a cross-complaint against us, alleging causes of action for
indemnity, contribution and apportionment, and declaratory relief. Broadcom voluntarily dismissed the cross-complaint on June 8, 2018.
On December 10, 2018, MaxLinear filed a motion for summary judgment, or in the alternative summary adjudication concerning all of
Trango’s causes of action asserted against MaxLinear. The hearing on that motion is currently scheduled for March 1, 2019. The trial date
is set for May 3, 2019. We intend to continue to vigorously defend against the lawsuit as it proceeds.

We cannot predict the outcome of the Trango Systems, Inc. litigation. Any adverse determination in the Trango Systems, Inc.

litigation could have a material adverse effect on our business and operating results.

Failure to integrate our business and operations successfully with those of acquired businesses in the expected time-frame or

otherwise may adversely affect our operating results and financial condition.

Our history of acquiring businesses is recent, and prior to our acquisition of Exar, we had never pursued an acquisition of that size

and complexity. We may complete larger-scale acquisitions in the future. The success of our recent and future acquisitions depends, in
substantial part, on our ability to integrate acquired businesses and operations efficiently and successfully with those of MaxLinear and to
realize fully the anticipated benefits and potential synergies from combining our companies, including, among others, cost savings from
eliminating duplicative functions; potential operational efficiencies in our respective supply chains and in research and development
investments; and potential revenue growth resulting from the addition of acquired product portfolios. If we are unable to achieve these
objectives, the anticipated benefits and potential synergies from the acquisitions may not be realized fully or may take longer to realize than
expected. Any failure to timely realize these anticipated benefits would have a material adverse effect on our business, operating results,
and financial condition, and could also have a material and adverse effect on the trading price or trading volume of our common stock.

We completed acquisitions in recent years. We have completed the integration process for such acquisitions. We have incurred
material restructuring costs in recent periods, some of which included the termination of employees from acquired businesses. To the extent
we acquire additional businesses in the future, we cannot ensure that integration objectives will not adversely affect our operating results. In
connection with the integration process, we could experience the loss of key customers, decreases in revenues relative to current
expectations and increases in operating costs, as well as the disruption of our ongoing businesses, any or all of which could limit our ability
to achieve the anticipated benefits and potential synergies from the acquisitions and have a material adverse effect on our business,
operating results, and financial condition.

Our business relationships, including customer relationships, and those of our acquired businesses may be subject to disruption due

to uncertainty associated with the acquisitions.

In response to the completion of our acquisitions, customers, vendors, licensors, and other third parties with whom we do business or

the acquired entities did business or otherwise have relationships may experience uncertainty associated with the acquisitions, and this
uncertainty could materially affect their decisions with respect to existing or future business relationships with us. As a result, we are in
many instances unable to evaluate the impact of the acquisition on certain assumed contract rights and obligations, including intellectual
property rights.

These business relationships may be subject to disruption as customers and others may elect to delay or defer purchase or design-win
decisions or switch to other suppliers due to the uncertainty about the direction of our offerings, any perceived unwillingness on our part to
support existing legacy acquired products, or any general perceptions by customers or other third parties that impute operational or business
challenges to us arising from the acquisitions. In addition, customers or other third parties may attempt to negotiate changes in existing
business relationships, which may result in additional obligations imposed on us. These disruptions could have a material adverse effect on
our business, operating results, and financial condition. Any loss of customers, customer products, design win opportunities, or other
important strategic relationships could have a material adverse effect on our business, operating results, and financial condition and could
have a material and adverse effect on the trading price or trading volume of our common stock.

In connection with the acquisition of Exar, we incurred $425.0 million of secured term loan indebtedness. We have since entered into

an interest rate swap to hedge a substantial portion of our exposure to rising interest rates applicable to such indebtedness. We have not
previously carried long-term indebtedness, which will adversely affect our operating results and cash-flows as we satisfy our underlying
interest and principal payment obligations. We also have not previously engaged in hedging arrangements, which are subject to fair value
measurement and hedge accounting rules and related documentation requirements. If we are unable to maintain favorable cash flow hedge
accounting and changes in fair value of our interest rate swap are recorded in earnings, it may adversely affect our operating results.

MaxLinear financed the acquisition of Exar in part with a secured term loan facility in an aggregate principal amount of

approximately $425.0 million, of which $262.0 million remained outstanding as of December 31, 2018. In November 2017, to hedge most
of our existing interest rate risk, we entered into a fixed-for-floating interest rate swap agreement with an amortizing notional amount to
swap a substantial portion of our variable rate LIBOR interest payments under the outstanding term loans for fixed interest payments
bearing an interest rate of 1.74685%. Our outstanding debt is still subject to a 2.5% fixed applicable margin during the term of the loan. As
a result of entering the swap, the interest rate on a substantial portion of our long-term debt is effectively fixed at approximately 4.25%.
The term loan facility is secured by a first priority security interest in MaxLinear’s assets, subject to certain customary exceptions, as well
as pledges of our equity interests in certain subsidiaries. Prior to the Exar acquisition, we had not previously carried long-term debt on our
balance sheet and have financed our

operations principally through working capital generated from operations as well as sales and issuances of our equity securities. Our
indebtedness will continue to adversely affect our operating expenses through interest payment obligations and will continue to adversely
affect our ability to use cash generated from operations as we repay interest and principal under the term loans. In addition, although the
term loan provisions do not include financial covenants, they do include operational covenants that may adversely affect our ability to
engage in certain activities, including certain financing and acquisition transactions, stock repurchases, guarantees, and similar transactions,
without obtaining the consent of the lenders, which may or may not be forthcoming. Accordingly, outstanding indebtedness could
adversely affect our operational freedom or ability to pursue strategic transactions that we would otherwise consider to be in the best
interests of stockholders.

Specifically, our indebtedness could have important consequences to investors in our common stock, including the following:

•

our ability to obtain any necessary financing in the future for working capital, capital expenditures, debt service requirements, or
other purposes may be limited or financing may be unavailable;

a substantial portion of our cash flows must be dedicated to the payment of principal and interest on our indebtedness and other
obligations and will not be available for use in our business;

our level of indebtedness could limit our flexibility in planning for, or reacting to, changes in our business and the markets in
which we operate;

our high degree of indebtedness will make us more vulnerable to changes in general economic conditions and/or a downturn in
our business, thereby making it more difficult for us to satisfy our obligations;

we are subject to a fixed rate of interest as a result of entering into a fixed-for-floating interest rate swap agreement in November
2017 to hedge against the potential that the interest rates applicable to our term loan will increase. Our interest rate under the
term loan varies based on a fixed margin over either an adjusted LIBOR or an adjusted base rate. Interest rates, including
LIBOR, have recently increased and may continue to increase in future periods. However, interest rate trends are inherently
difficult to predict and interest rates may significantly increase or decrease over a short period of time. If interest rates were to
decrease substantially, we would pay higher interest expense than market and, as a result, could seek to terminate or modify the
terms of the swap prior to its maturity which could result in termination or other fees and the fair value of our interest rate swap
may also decrease substantially; and

we are also still subject to variable interest rate risk on the principal balance in excess of the notional amount of the interest rate
swap because our interest rate under the term loan varies based on a fixed margin over either an adjusted LIBOR or an adjusted
base rate. Interest rates, including LIBOR, have recently increased and may continue to increase in future periods. If we are
unable to make anticipated prepayments of our indebtedness causing the unhedged portion of our indebtedness to substantially
increase at the same time that interest rates were to increase substantially, it would adversely affect our operating results and
could affect our ability to service the term loan indebtedness.

If we fail to make required debt payments, or if we fail to comply with other covenants in our debt service agreements, we would be
in default under the terms of these agreements. Subject to customary cure rights, any default would permit the holders of the indebtedness
to accelerate repayment of this debt and could cause defaults under other indebtedness that we have, any of which could have a material
adverse effect on the trading price of our common stock.

Servicing our indebtedness will require a significant amount of cash, and we may not have sufficient cash flow from our business to

pay our substantial indebtedness.

In connection with the term loan facility, we incurred $425.0 million in aggregate principal amount of senior indebtedness, of which
approximately $262.0 million remained outstanding at December 31, 2018. Our substantial indebtedness may increase our vulnerability to
any generally adverse economic and industry conditions.

Our ability to make scheduled payments of the principal and interest when due, or to refinance our borrowings under the term loan
facility, will depend on our future performance, which is subject to economic, financial, competitive and other factors beyond our control.
Our business may not continue to generate cash flow from operations in the future sufficient to satisfy our obligations under our
indebtedness, and any future indebtedness we may incur and to make necessary capital expenditures. If we are unable to generate such cash
flow, we may be required to adopt one or more alternatives, such as reducing or delaying

investments or capital expenditures, selling assets, refinancing or obtaining additional equity capital on terms that may be onerous or highly
dilutive. Our ability to refinance the term loans or existing or future indebtedness will depend on the capital markets and our financial
condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could
result in a default on the loan facility or future indebtedness.

We may still incur substantially more debt or take other actions, which would intensify the risks discussed immediately above.

We and our subsidiaries may, subject to any limitations in the terms of the term loan facility, incur additional debt, secure existing or

future debt, recapitalize our debt or take a number of other actions that are not limited by the terms of our term loans that could have the
effect of diminishing our ability to make payments under the indebtedness when due. If we incur any additional debt, the related risks that
we and our subsidiaries face could intensify.

As part of a business unit divestiture, Exar agreed to indemnify the buyer of the business unit for an amount that could be up to the
full purchase price received for breaches of representations and warranties, covenants and other matters under the applicable purchase
agreement. If Exar were required to make payments in satisfaction of these indemnification obligations, it could have a material adverse
effect on our operating results and financial condition.

Under the terms of the purchase agreement relating to the divested business unit, Exar agreed to indemnify the purchaser of the
business unit for breaches of representations and warranties and covenants and for certain other matters. Exar also agreed to place $5.0
million of the total purchase price into an escrow account for a period of 18 months to partially secure its indemnification obligations under
the purchase agreement; of this amount, $0.8 million remained in escrow as of December 31, 2018; $1.3 million has been released to the
purchaser of iML and $2.9 million has been released to Exar through December 31, 2018. Exar’s indemnification obligations for breaches
of representations and warranties survived for 12 months from the closing of the sale transaction, except for breaches of representations and
warranties covering intellectual property, which survived for 18 months, and breaches of representations and warranties of certain
fundamental representations, which survive until the expiration of the applicable statute of limitations. Exar’s maximum indemnification
obligation for breaches of representations and warranties, other than intellectual property and fundamental representations, was $13.6
million, its maximum indemnification obligation for breaches of intellectual property representations was $34.0 million, and its maximum
indemnity obligation for breaches of fundamental representations is the full purchase price amount (approximately $136.0 million). The
aggregate amount recovered by the purchaser in accordance with the indemnification provisions with respect to matters that are subject to
the intellectual property representations, together with the aggregate amount recovered by the purchaser in accordance with the
indemnification provisions with respect to matters that are subject to the general representations and warranties (other than fundamental
representations), will in no event exceed $34.0 million. The Company believes it does not have a material indemnification obligation as of
December 31, 2018; however, if the Company were required to make payments in satisfaction of these indemnification obligations related
to breaches of representations and warranties of certain fundamental obligations which have not yet expired, it could have a material
adverse effect on the Company's business, financial condition, results of operations, and cash flows.

We have recorded goodwill that could become impaired and adversely affect our future operating results.

Our business acquisitions are accounted for under the acquisition method of accounting by MaxLinear in accordance with
accounting principles generally accepted in the United States. Under the acquisition method of accounting, the assets and liabilities of
acquired businesses are recorded, as of completion, at their respective fair values and added to our assets and liabilities. Our reported
financial condition and results of operations after completion of the acquisition reflect acquired businesses' balances and results but are not
restated retroactively to reflect the historical financial position or results of operations of acquired businesses for periods prior to the
acquisition. As a result, comparisons of future results against prior period results will be more difficult for investors.

Under the acquisition method of accounting, the total purchase price is allocated to net tangible assets and identifiable intangible
assets of acquired businesses based on their fair values as of the date of completion of the acquisition. The excess of the purchase price
over those fair values is recorded as goodwill. Our acquisitions have resulted in the creation of goodwill based upon the application of the
acquisition method of accounting. To the extent the value of goodwill or other intangible assets become impaired, we may be required to
incur material charges relating to such impairment. We conduct our annual goodwill impairment analysis on October 31 each year, or more
frequently if we believe indicators of impairment exist. In addition, there can be no guarantee that acquired intangible assets, particularly in-
process research and development, will generate revenues or profits that we include in our forecast that is the basis for their fair values as
of the acquisition date. Any such impairment charges relating to goodwill or other intangible assets could have a material impact on our
operating results in

future periods, and the announcement of a material impairment could have an adverse effect on the trading price and trading volume of our
common stock. For example, in the years ended December 31, 2018, 2017, and 2016, we recognized impairment losses of $2.2 million,
$2.0 million, and $1.3 million, respectively, related to acquired intangible assets. As of December 31, 2018, our balance sheet reflected
goodwill of $238.3 million and other intangible assets of $244.9 million, including in-process research and development, or IPR&D,
intangible assets of $4.4 million, and we could recognize impairment charges in the future.

ITEM 1B.

UNRESOLVED STAFF
COMMENTS

None.

ITEM 2.

PROPERTIES

Our corporate headquarters occupy approximately 68,000 square feet in Carlsbad, California under a lease that expires in June 2022.

A full range of business and engineering functions are represented at our corporate headquarters, including a laboratory for research and
development and manufacturing operations. In addition to our principal office spaces in Carlsbad, we have active leased facilities in Irvine,
California; San Jose, California; Burnaby, Canada; Bangalore, India; Singapore; Taipei, and Hsinchu Taiwan; Shenzhen and Shanghai,
China; Seoul, South Korea; Tokyo, Japan; and in Paterna, Spain.

ITEM 3.

LEGAL
PROCEEDINGS

CrestaTech Litigation

On January 21, 2014, CrestaTech Technology Corporation, or CrestaTech, filed a complaint for patent infringement against us in the
United States District Court of Delaware, or the District Court Litigation. In its complaint, CrestaTech alleged that we infringe U.S. Patent
Nos. 7,075,585, or the '585 Patent and 7,265,792, or the '792 Patent. In addition to asking for compensatory damages, CrestaTech alleged
willful infringement and sought a permanent injunction. CrestaTech also named Sharp Corporation, Sharp Electronics Corp. and VIZIO,
Inc. as defendants based upon their alleged use of our television tuners.

On January 28, 2014, CrestaTech filed a complaint with the U.S. International Trade Commission, or ITC, again naming, among

On March 10, 2014, the court stayed the District Court Litigation pending resolution of the ITC Investigation.

The ITC subsequently issued its opinion, which terminated its investigation. The opinion affirmed the findings of the ALJ that no

In addition, we have filed four petitions for inter partes review, or IPR, by the US Patent Office, two for each of the CrestaTech
patents asserted against us. The Patent Trial and Appeal Board, or the PTAB, did not institute two of these IPRs as being redundant to IPRs
filed by another party that were already underway for the same CrestaTech patent. The remaining two petitions were instituted or
instituted-in-part meaning, together with the IPRs filed by third parties, there were six IPR proceedings instituted involving the two
CrestaTech patents asserted against us.

In August 2016, the PTAB issued final written decisions in the remaining four pending IPR proceedings (two for each of the

asserted patents), holding that many of the reviewed claims - including the two remaining claims of the ‘585 Patent which the ITC held
were infringed - are unpatentable. The parties have appealed the two decisions related to the ‘585 Patent; however, no appeals were filed as
to the PTAB’s rulings for the ‘792 Patent. The Federal Circuit heard oral argument on these appeals on December 4, 2017. On December 7,
the Federal Circuit issued a Rule 36 affirmance in one of the '585 appeals, affirming that the two remaining claims that the ITC had ruled
were valid and infringed (claims 12 and 13) are unpatentable. On January 25, 2018, the Federal Circuit issued its ruling in the other ‘585
appeal, vacating the PTAB's ruling that certain claims were not unpatentable and remanding to the PTAB for further analysis of whether
CrestaTech is estopped from arguing and/or has waived the right to argue whether six dependent claims are patentable.

As a result of these IPR decisions, all 13 claims that CrestaTech asserted against us in the ITC Investigation have been found to be

unpatentable by the PTAB and the Federal Circuit.

In April 2017, the Delaware court continued the stay of the District Court Litigation per the parties’ request, pending resolution of

the Federal Circuit appeals in the IPRs. On April 3, 2018, the District Court dismissed the District Court Litigation. While Crespe has
subsequently suggested that this dismissal may have been in error, Crespe has taken no action to date to re-instate the case. In its
bankruptcy proceeding, Crespe has stated that it “no longer has any valid patent claims that it is asserting in any of the proceedings
purchased through the Sale Agreement,” which includes the District Court Litigation against us. In re Cresta Technology Corporation,
Case No. 16-50808 (N.D. Cal. Bank. 2016) at Dkt. No. 270. At this time, we cannot predict whether the District Court or other litigation
will be re-instated.

Trango Systems, Inc. Litigation

On or about August 2, 2016, Trango Systems, Inc., or Trango, filed a complaint in the Superior Court of California, County of San

written contract, and Trango voluntarily dismissed its cause of action for breach of an implied-in-fact contract. The remaining causes of
action have been permitted to proceed. On March 15, 2018, Trango filed its fourth amended complaint. We filed our answer on April 17,
2018. Also, on April 17, Broadcom filed a cross-complaint against us, alleging causes of action for indemnity, contribution and
apportionment, and declaratory relief. Broadcom voluntarily dismissed the cross-complaint on June 8, 2018. On December 10, 2018,
MaxLinear filed a motion for summary judgment, or in the alternative summary adjudication concerning all of Trango’s causes of action
asserted against MaxLinear. The hearing on that motion is currently scheduled for March 1, 2019. The trial date is set for May 3, 2019. We
intend to continue to vigorously defend against the lawsuit as it proceeds.

We cannot predict the outcome of the Trango Systems, Inc. litigation. Any adverse determination in the Trango Systems, Inc.

litigation could have a material adverse effect on our business and operating results.

Other Matters

In addition, from time to time, we are subject to threats of litigation or actual litigation in the ordinary course of business, some of

which may be material. Other than the CrestaTech and Trango litigation described above, we believe that there are no other currently
pending litigation matters that, if determined adversely by us, would have a material effect on our business or that would not be covered by
our existing liability insurance.

ITEM 4.

MINE SAFETY
DISCLOSURES

Not applicable.

PART II — FINANCIAL INFORMATION

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES

Market Information and Holders

Our common stock is traded on the New York Stock Exchange, or the NYSE, under the symbol MXL.

According to our transfer agent, as of January 29, 2019, there were 60 record holders of our common stock. We believe we have

approximately 22,000 beneficial holders of our common stock.

Dividend Policy

We have never declared or paid cash dividends on our common stock. We currently intend to retain all available funds and any
future earnings for use in the operation of our business and do not anticipate paying any dividends on our common stock in the foreseeable
future. Any future determination to declare dividends will be made at the discretion of our Board of Directors and will depend on our
financial condition, operating results, capital requirements, general business conditions and other factors that our Board of Directors may
deem relevant.

Stock Performance Graph

Notwithstanding any statement to the contrary in any of our previous or future filings with the SEC, the following information
relating to the price performance of our common stock shall not be deemed “filed” with the SEC or “Soliciting Material” under the
Exchange Act, or subject to Regulation 14A or 14C, or to liabilities of Section 18 of the Exchange Act except to the extent we specifically
request that such information be treated as soliciting material or to the extent we specifically incorporate this information by reference.

The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on The
NYSE Composite Index and The Philadelphia Semiconductor Index. The period shown commences on December 31, 2013 and ends on
December 31, 2018, the end of our last fiscal year. The graph assumes an investment of $100 on December 31, 2013, and the reinvestment
of any dividends.

The comparisons in the graph below are required by the Securities and Exchange Commission and are not intended to forecast or be

indicative of possible future performance of our common stock.

Recent Sales of Unregistered Securities

None.

Recent Repurchases of Equity Securities

None.

ITEM 6.

SELECTED FINANCIAL
DATA

We have derived the selected consolidated statement of operations data for the years ended December 31, 2018, 2017 and 2016 and

selected consolidated balance sheet data as of December 31, 2018 and 2017 from our consolidated financial statements and related notes
included elsewhere in this report. We have derived the consolidated statement of operations data for the years ended December 31, 2015
and 2014 and the consolidated balance sheet data as of December 31, 2016, 2015 and 2014 from our consolidated financial statements not
included in this report. Our historical results are not necessarily indicative of the results to be expected for any future period. As described
in Note 1 to our consolidated financial statements included herein, as a result of the adoption of ASC 606 as of January 1, 2018 using the
modified retrospective method, prior period amounts have not been adjusted to reflect the change to recognize certain distributor sales upon
sale to the distributor, or the sell-in method, from recognition upon the Company's sale to the distributors' end customers, or the sell-
through method, which required the deferral of revenue and profit on such distributor sales. The following selected consolidated financial
data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and
our consolidated financial statements and related notes included elsewhere in this report.

Years Ended December 31,

2018

2017

2016

2015

2014

(in thousands, except per share amounts)

Consolidated Statement of Operations Data:
Net revenue
Cost of net revenue
Gross profit
Operating expenses:

Research and development
Selling, general and administrative
Impairment losses
Restructuring charges

Total operating expenses
Income (loss) from operations
Interest income
Interest expense
Other income (expense), net
Total interest and other income (expense), net
Income (loss) before income taxes
Income tax provision (benefit)
Net income (loss)

Net income (loss) per share:

Basic
Diluted

Shares used to compute net income (loss) per share:

Basic
Diluted

$ 384,997 $ 420,318 $ 387,832 $ 300,360 $ 133,112
51,154
81,958

176,223
208,774

157,842
229,990

212,355
207,963

144,937
155,423

120,046
101,789
2,198
3,838
227,871
(19,097)
78
(14,255)
422
(13,755)
(32,852)
(6,653)
$ (26,199) $

97,745
112,279
64,454
105,831
1,300
2,000
3,432
9,524
166,931
229,634
63,059
(21,671)
572
274
(104)
(10,378)
163
(2,223)
631
(12,327)
63,690
(33,998)
(24,811)
2,398
(9,187) $ 61,292 $ (42,331) $

85,405
77,981
21,600
14,086
199,072
(43,649)
275
(100)
568
743
(42,906)
(575)

56,625
34,191
—
—
90,816
(8,858)
236
(15)
(108)
113
(8,745)
(1,704)
(7,041)

(0.38) $
(0.38) $

(0.14) $
(0.14) $

0.96 $
0.91 $

(0.79) $
(0.79) $

(0.19)

68,490
68,490

66,252
66,252

63,781
67,653

53,378
53,378

36,472
36,472

As of December 31,

2018

2017

2016

2015

2014

(in thousands)

Consolidated Balance Sheet Data:
Cash, cash equivalents, restricted cash, and short- and long-term
investments, available-for-sale
Working capital
Total assets
Total stockholders’ equity

74,191 $

110,044
738,831
399,936

74,412 $ 136,805 $ 130,498 $ 79,351
67,668
124,918
135,711
824,862
99,102
387,424

158,304
422,652
352,424

134,170
334,505
262,924

ITEM 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

Forward-Looking Statements

The following discussion and analysis of the financial condition and results of our operations should be read in conjunction with the
consolidated financial statements and related notes included elsewhere in this report. This discussion contains forward-looking statements
that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or
contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors”
included elsewhere in this report.

Overview

We are a provider of radio-frequency, or RF, high-performance analog, and mixed-signal communications systems-on-chip solutions

for the connected home, wired and wireless infrastructure, and industrial and multi-market applications. We are a fabless integrated circuit
design company whose products integrate all or substantial portions of a broadband communication system. In most cases, these products
are designed on a single silicon-die, using standard digital CMOS processes and conventional packaging technologies. We believe this
enables our solutions to achieve superior power, performance, and cost advantages relative to our industry competition. Our customers
include electronics distributors, module makers, original equipment manufacturers (OEMs), and original design manufacturers (ODMs),
who incorporate our products in a wide range of electronic devices. Examples of such end market electronic devices incorporating our
products include cable DOCSIS broadband modems and gateways; wireline connectivity devices for in-home networking applications; RF
transceivers and modems for wireless carrier access and backhaul infrastructure; fiber-optic modules for data center, metro, and long-haul
transport networks; video set-top boxes and gateways; hybrid analog and digital televisions, direct broadcast satellite outdoor and indoor
units; and power management and interface products used in these and a range of other markets.

We combine our high-performance RF and mixed-signal semiconductor design skills with our expertise in digital communications

systems, software, high-performance analog, and embedded systems to provide highly integrated semiconductor devices and platform-level
solutions that are manufactured using a range of semiconductor manufacturing processes, including low-cost complementary metal oxide
semiconductor, or CMOS, process technology, Silicon Germanium, Gallium Arsenide, BiCMOS and Indium Phosphide process
technologies. Our ability to design analog and mixed-signal circuits in CMOS allows us to efficiently combine analog and digital signal
processing functionality in the same integrated circuit. As a result, our solutions have high levels of functional integration and performance,
small silicon die size, and low power consumption. Moreover, we are uniquely positioned to offer customers a combination of proprietary
CMOS-based radio system architectures that provide the benefits of superior RF system performance, along with high-performance analog
interface and power management solutions that enable shorter design cycles, significant design flexibility, and low system cost across a
wide range of broadband communications, wired and wireless infrastructure, and industrial and multimarket applications.

Our net revenue has grown from approximately $0.6 million in fiscal 2006 to $385.0 million in fiscal 2018. In fiscal 2018, our net

revenue was derived primarily from sales of RF receivers and RF receiver systems-on-chip and connectivity solutions into broadband
operator voice and data modems and gateways and connectivity adapters, global analog and digital RF receiver products for analog and
digital pay-TV applications, radio and modem solutions into wireless carrier access and backhaul infrastructure platforms, high-speed
optical interconnect solutions sold into optical modules for data-center, metro and long-haul networks, and high-performance interface and
power management solutions into a broad range of communications, industrial, automotive and multi-market applications. Our ability to
achieve revenue growth in the future will depend, among other factors, on our ability to further penetrate existing markets; our ability to
expand our target addressable markets by developing new and innovative products; and our ability to obtain design wins with device
manufacturers, in particular manufacturers of set-top boxes, data modems, and gateways for the broadband service provider and Pay-TV
industries, manufacturers selling into the smartphone market, storage networking market, cable infrastructure market, industrial and
automotive markets, and optical module and telecommunications infrastructure markets.

Products shipped to Asia accounted for 81%, 89% and 93% of net revenue during the years ended December 31, 2018, 2017 and

2016, respectively, including 63%, 71% and 78%, respectively, from products shipped to China. Although a large percentage of our
products is shipped to Asia, we believe that a significant number of the systems designed by these customers and incorporating our
semiconductor products are then sold outside Asia. For example, we believe revenue generated from sales of our digital terrestrial set-top
box products during the years ended December 31, 2018, 2017 and 2016 related principally to sales to Asian set-top box manufacturers
delivering products into Europe, Middle East, and Africa, or EMEA markets. Similarly, revenue generated from sales of our cable modem
products during the years ended December 31, 2018, 2017 and 2016 related principally to sales to Asian ODMs and contract manufacturers
delivering products into European and North American markets. To date, all of our sales have been denominated in United States dollars.
There is a growing portion of our business, related specifically to our high-speed optical interconnect products, that are shipped to, and are
ultimately consumed in Asian markets, with the majority of these products being purchased by end customers in China.

A significant portion of our net revenue has historically been generated by a limited number of customers. In the year ended
December 31, 2018, one of our customers, Arris (which entered into a definitive agreement to be acquired by CommScope Holding
Company, Inc.) accounted for 18% of our net revenue, and our ten largest customers collectively accounted for 61% of our net revenue. In
the year ended December 31, 2017, one of our customers, Arris, accounted for 25% of our net revenue, and our ten largest customers
collectively accounted for 58% of our net revenue. In the year ended December 31, 2016, two of our customers, Arris and Technicolor,
accounted for 37% of our net revenue, and our ten largest customers collectively accounted for 74% of our net revenue. Sales to Arris as a
percentage of revenue include sales to Pace, which was acquired by Arris in January 2016, for the year ended December 31, 2016. For
certain customers, we sell multiple products into disparate end user applications such as cable modems, satellite set-top boxes and
broadband gateways.

Our business depends on winning competitive bid selection processes, known as design wins, to develop semiconductors for use in

our customers’ products. These selection processes are typically lengthy, and as a result, our sales cycles will vary based on the specific
market served, whether the design win is with an existing or a new customer and whether our product being designed in our customer’s
device is a first generation or subsequent generation product. Our customers’ products can be complex and, if our engagement results in a
design win, can require significant time to define, design and result in volume production. Because the sales cycle for our products is long,
we can incur significant design and development expenditures in circumstances where we do not ultimately recognize any revenue. We do
not have any long-term purchase commitments with any of our customers, all of whom purchase our products on a purchase order basis.
Once one of our products is incorporated into a customer’s design, however, we believe that our product is likely to remain a component of
the customer’s product for its life cycle because of the time and expense associated with redesigning the product or substituting an
alternative chip. Product life cycles in our target markets will vary by application. For example, in the hybrid television market, a design-in
can have a product life cycle of 9 to 18 months. In the terrestrial retail digital set-top box market, a design-in can have a product life cycle
of 18 to 24 months. In the cable operator modem and satellite gateway sectors, a design-in can have a product life cycle of 24 to 48 months.
In the industrial and wired and wireless infrastructure markets, a design-in can have a product life cycle of 24 to 60 months and beyond.

For a discussion of specific risks and uncertainties that could affect our ability to achieve these and other strategic objectives of our

acquisitions, please refer to Part I, Item 1A, “Risk Factors” under the subsection captioned “Risks Relating to Recent Acquisitions.”

Critical Accounting Policies and Estimates

Management’s discussion and analysis of our financial condition and results of operations is based upon our financial statements

which are prepared in accordance with accounting principles that are generally accepted in the United States. The preparation of these
financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, related
disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses
during the reporting period. We continually evaluate our estimates and judgments, the most critical of which are those related to revenue
recognition, allowance for doubtful accounts, inventory valuation, income taxes and stock-based compensation. We base our estimates and
judgments on historical experience and other factors that we believe to be reasonable under the circumstances. Materially different results
can occur as circumstances change and additional information becomes known.

We believe that the following accounting policies involve a greater degree of judgment and complexity than our other accounting

policies. Accordingly, these are the policies we believe are the most critical to understanding and evaluating our consolidated financial
condition and results of operations.

Revenue Recognition

On January 1, 2018, we adopted Financial Accounting Standards Board, or FASB, Accounting Standards Codification Topic 606,
Revenue from Contracts with Customers, or ASC 606, using the modified retrospective method and accordingly, modified our policy on
revenue recognition as stated below. The primary impact of adopting ASC 606 for MaxLinear was to accelerate the timing of our revenue
and related cost recognition on products sold via some of our distributors, which changed from recognition upon the sale to our distributors'
end customers, or the sell-through method, to recognition upon our sale to the distributor, or the sell-in method. We are now also required
to estimate the effects of pricing credits to our distributors from contractual price protection and unit rebate provisions, as well as stock
rotation rights and record such estimated credits upon our sale to the distributor. As a result of the adoption of ASC 606 as of January 1,
2018 using the modified retrospective method, prior period amounts have not been adjusted to reflect the change in revenue recognition for
such distributor sales.

Substantially all of our revenue is generated from sales of our integrated circuits to electronics distributors, module makers, OEMs,

and ODMs under individual customer purchase orders, some of which have underlying master sales agreements that specify terms
governing the product sales. Effective January 1, 2018, we adopted ASC 606 and recognize revenue at the point in time when control of the
products is transferred to the customer at the estimated net consideration for which collection is probable, taking into account our
customer's rights to price protection, other pricing credits, unit rebates, and rights to return unsold product. Transfer of control occurs either
when products are shipped to or received by the distributor or direct customer, based on the terms of the specific agreement with the
customer, if we have a present right to payment and transfer of legal title and the risks and rewards of ownership to the customer has
occurred. For most of our product sales, transfer of control occurs upon shipment to our distributor or direct customer. In assessing whether
collection of consideration from a customer is probable, we consider the customer's ability and intention to pay that amount of
consideration when it is due. Payment of invoices is due as specified in the underlying customer agreement, typically 30 days from the
invoice date, which occurs on the date of transfer of control of the products to the customer. Since payment terms are less than a year, we
have elected the practical expedient and do not assess whether a customer contract has a significant financing component.

A five-step approach is applied in the recognition of revenue under ASC 606: (1) identify the contract with a customer, (2) identify

the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance
obligations in the contract, and (5) recognize revenue when we satisfy a performance obligation. We applied ASC 606 to our customer
contracts that were not completed before the January 1, 2018 adoption date. Customer purchase orders plus the underlying master sales
agreements are considered to be contracts with the customer for purposes of applying the five-step approach under ASC 606.

Pricing adjustments and estimates of returns under contractual stock rotation rights are treated as variable consideration for purposes
of determining the transaction price, and are estimated at the time control transfers using the expected value method based on our analysis
of actual price adjustment claims by distributors and product and historical return rates, and then reassessed at the end of each reporting
period. We also consider whether any variable consideration is constrained, since such amounts for which it is probable that a significant
reversal will occur when the contingency is subsequently resolved are required to be excluded from revenues. Price adjustments are
finalized at the time the products are sold through to the end customer and the distributor or end customer submits a claim to reduce the sale
price to a pre-approved net price. Stock rotation allowances are capped at a fixed percentage of our sales to a distributor for a period of
time, up to six months, as specified in the individual distributor contract. If our current estimates of such credits and rights are materially
inaccurate, it

may result in adjustments that affect future revenues and gross profits. Returns under our general assurance warranty of products for a
period of one to three years have not been material and warranty-related services are not considered a separate performance obligation
under the customer contracts. Most of our customers resell our product as part of their product and thus are tax-exempt, however to the
extent we collect and remit taxes on product sales from customers, we have elected to exclude from the measurement of transaction price
such taxes.

Each distinct promise to transfer products is considered to be an identified performance obligation for which revenue is recognized

upon transfer of control of the products to the customer. Although customers may place orders for products to be delivered on multiple
dates that may be in different quarterly reporting periods, all of the orders are scheduled within one year from the order date. We have
opted to not disclose the portion of revenues allocated to partially unsatisfied performance obligations, which represent products to be
shipped within 12 months under open customer purchase orders, at the end of the current reporting period as allowed under ASC 606. We
have also elected to record sales commissions when incurred, pursuant to the practical expedient under ASC 340, as the period over which
the sales commission asset that would have been recognized is less than one year.

Customer contract liabilities consist of obligations to deliver rebates to customers in the form of units of products, which are included

in accrued expenses and other current liabilities in the consolidated balance sheets. Other obligations to customers consist of estimates of
price protection rights offered to our end customers, which are included in accrued price protection liability in the consolidated balance
sheets, as well as price adjustments expected to be claimed by the distributor upon sell-through of the products to their customers, and
amounts expected to be returned by distributors under stock rotation rights, which are included in accrued expenses and other current
liabilities in the consolidated balance sheets. We also record a right of return asset consist of amounts representing the products we expect
to receive from customers in returns, which is included in inventory in the consolidated balance sheets, and is typically settled within six
months of transfer of control to the customer, or the period over which stock rotation rights are based. Upon lapse of the time period for
stock rotations, or the contractual end to price protection and rebate programs, which is approximately one to two years, and when we
believe unclaimed amounts are no longer subject to payment and will not be paid, any remaining asset or liability is derecognized by an
offsetting entry to cost of net revenue and net revenue. For additional disclosures regarding contract liabilities and other obligations to
customers, see Note 14 to our consolidated financial statements.

We assess customer accounts receivable and contract assets for impairment in accordance with ASC 310-10-35.

The following tables present the amounts by which each financial statement line item was affected as a result of applying ASC 606:

Year Ended December 31, 2018

Amounts under
Legacy GAAP

Impact of Adoption
(in thousands, except per share amounts)

As reported

Consolidated statement of operations:

Net revenue
Cost of net revenue
Gross profit
Loss from operations
Loss before income taxes
Income tax benefit
Net loss
Basic and diluted loss per share

370,033 $
170,719
199,314
(28,557)
(42,312)
(8,640)
(33,672)
(0.49)

14,964 $
5,504
9,460
9,460
9,460
1,987
7,473
0.11

384,997
176,223
208,774
(19,097)
(32,852)
(6,653)
(26,199)
(0.38)

Consolidated balance sheet:
Accounts receivable
Inventory
Total current assets
Total assets
Deferred revenue and deferred profit
Accrued expenses and other current liabilities
Total current liabilities
Total liabilities
Accumulated deficit
Total stockholders' equity
Total liabilities and stockholders' equity

December 31, 2018

Amounts under
Legacy GAAP

Impact of Adoption
(in thousands)

As reported

59,491 $
41,470
180,343
738,563
19,499
12,860
79,406
347,734
(102,737)
390,829
738,563

— $

268
268
268
(19,499)
10,660
(8,839)
(8,839)
9,107
9,107
268

59,491
41,738
180,611
738,831
—
23,520
70,567
338,895
(93,630)
399,936
738,831

The impacts of adopting ASC 606 as shown above were primarily related to the acceleration of the timing of the Company’s revenue
and related cost recognition on products sold via some of its distributors, which changed from sale to the distributors' end customers, or the
sell-through method, to recognition upon the Company's sale to the distributor, or the sell-in method.

Revenues from sales through our distributors accounted for 42%, 34% and 19% of net revenue for the years ended December 31,

2018, 2017 and 2016, respectively.

Allowance for Doubtful Accounts

We perform ongoing credit evaluations of our customers and assess each customers’ credit worthiness. We monitor collections and

payments from our customers and maintain an allowance for doubtful accounts based upon our historical experience, our anticipation of
uncollectible accounts receivable and any specific customer collection issues that we have identified. While our credit losses have
historically been insignificant, we may experience higher credit loss rates in the future than we have in the past. Our receivables are
concentrated with relatively few customers. Therefore, a significant change in the liquidity or financial position of any one significant
customer could make collection of our accounts receivable more difficult, require us to increase our allowance for doubtful accounts and
negatively affect our working capital.

Inventory Valuation

We assess the recoverability of our inventory based on assumptions about demand and market conditions. Forecasted demand is

determined based on historical sales and expected future sales. Inventory is stated at the lower of cost or net realizable value. Cost
approximates actual cost on a first-in, first-out basis and net realizable value is the estimated selling price in the ordinary course of
business, less reasonably predictable costs of completion, disposal and transportation. We reduce our inventory to its lower of cost or net
realizable value on a part-by-part basis to account for its obsolescence or lack of marketability. Reductions are calculated as the difference
between the cost of inventory and its net realizable value based upon assumptions about future demand, market conditions and costs. Once
established, these adjustments are considered permanent and are not revised until the related inventory is sold or disposed of. If actual
market conditions are less favorable than those projected by management, additional inventory write-downs may be required that may
adversely affect our operating results. If actual market conditions are more favorable, we may have higher gross profits when products are
sold.

Production Masks

Production masks with alternative future uses or discernible future benefits are capitalized and amortized over their estimated useful
life of two years to five years. To determine if the production mask has alternative future uses or benefits, we evaluate risks associated with
developing new technologies and capabilities, and the related risks associated with entering new markets. Production masks that do not
meet the criteria for capitalization are expensed as research and development costs.

Goodwill and Intangible Assets

Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations

accounted for under the acquisition method. Intangible assets represent purchased intangible assets including developed technology and in-
process research and development, or IPR&D, technologies acquired or licensed from other companies, customer relationships,
noncompete covenants, backlog, and trademarks and tradenames. Purchased finite-lived intangible assets are capitalized and amortized over
their estimated useful lives. Technologies acquired or licensed from other companies, customer relationships, noncompete covenants,
backlog, and trademarks and tradenames are capitalized and amortized over the lesser of the terms of the agreement, or estimated useful
life. We capitalize IPR&D projects acquired as part of a business combination. On completion of each project, IPR&D assets are
reclassified to developed technology and amortized over their estimated useful lives.

Impairment of Goodwill and Long-Lived Assets

Goodwill is not amortized but is tested for impairment using either a qualitative assessment, and/or the two-step method as needed.

Step one is the identification of potential impairment. This involves comparing the fair value of each reporting unit, which we have
determined to be the entity itself, with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds the carrying
amount, the goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the
carrying amount of a reporting unit exceeds its fair value, the second step of the impairment test is performed to measure the amount of
impairment loss, if any. We test by reporting unit, goodwill and other indefinite-lived intangible assets for impairment at October 31 each
year or more frequently if we believe indicators of impairment exist.

During development, IPR&D is not subject to amortization and is tested for impairment annually or more frequently if events or

changes in circumstances indicate that the asset might be impaired. We review indefinite-lived intangible assets each year for impairment
using a qualitative assessment, followed by a quantitative assessment, as needed, each year as of October 31, the date of our annual
goodwill impairment review, or whenever events or changes in circumstances indicate the carrying value may not be recoverable.
Recoverability of indefinite-lived intangible assets is measured by comparing the carrying amount of the asset to its fair value. In certain
cases, we utilize the relief-from-royalty method when appropriate, and a fair value will be obtained based on analysis over the costs saved
by owning the right instead of leasing it. Once an IPR&D project is complete, it becomes a finite-lived intangible asset and is evaluated for
impairment both immediately prior to its change in classification and thereafter in accordance with our policy for long-lived assets.

We regularly review the carrying amount of our long-lived assets subject to depreciation and amortization, as well as the useful

lives, to determine whether indicators of impairment may exist which warrant adjustments to carrying values or estimated useful lives. An
impairment loss would be recognized when the sum of the expected future undiscounted net cash flows is less than the carrying amount of
the asset. Should impairment exist, the impairment loss would be measured based on the excess of the carrying amount of the asset over the
asset’s fair value.

Income Taxes

We provide for income taxes utilizing the asset and liability approach of accounting for income taxes. Under this approach, deferred

taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid.
Deferred taxes are presented net as noncurrent. The provision for income taxes generally represents income taxes paid or payable for the
current year plus the change in deferred taxes during the year. Deferred taxes result from the differences between the financial and tax
bases of our assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances are
recorded to reduce deferred tax assets when a judgment is made that is considered more likely than not that a tax benefit will not be
realized. A decision to record a valuation allowance results in an increase in income tax expense or a decrease in income tax benefit. If the
valuation allowance is released in a future period, income tax expense will be reduced accordingly.

The calculation of tax liabilities involves dealing with uncertainties in the application of complex global tax regulations. The impact

of an uncertain income tax position is recognized at the largest amount that is “more likely than not” to be sustained upon audit by the
relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. If
the estimate of tax liabilities proves to be less than the ultimate assessment, a further charge to expense would result.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all

of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the

generation of future taxable income during the periods in which those temporary differences become deductible. We continue to assess the
need for a valuation allowance on the deferred tax asset by evaluating both positive and negative evidence that may exist. Any adjustment
to the net deferred tax asset valuation allowance would be recorded in the income statement for the period that the adjustment is
determined to be required.

On December 22, 2017, the Tax Cuts and Jobs Act, or the Tax Act, was enacted into U.S. tax law. Also on December 22, 2017, the
SEC issued guidance in Staff Accounting Bulletin No. 118, or SAB 118, to address certain fact patterns where the accounting for changes
in tax laws or tax rates under ASC Topic 740 is incomplete upon issuance of an entity's financial statements for the reporting period in
which the Tax Act is enacted. As permitted in SAB 118, in 2017, we took a measurement period approach and reported certain provisional
amounts, based on reasonable estimates, for certain tax effects in which the accounting under ASC 740 was incomplete. Such provisional
amounts were subject to adjustment during a limited measurement period, not to extend one year beyond the tax law enactment date. We
have completed the accounting required under ASC 740 in a timely manner.

Stock-Based Compensation

We measure the cost of employee services received in exchange for equity incentive awards, including restricted stock units and

restricted stock awards, employee stock purchase rights and stock options, based on the grant date fair value of the award. We calculate the
fair value of restricted stock units and restricted stock awards based on the fair market value of our common stock on the grant date. We
use the Black-Scholes valuation model to calculate the fair value of stock options and employee stock purchase rights granted to
employees. Stock-based compensation expense is recognized over the period during which the employee is required to provide services in
exchange for the award, which is usually the vesting period. We recognize compensation expense over the vesting period using the
straight-line method and classify these amounts in the statements of operations based on the department to which the related employee
reports. We calculate the weighted-average expected life of options using the simplified method as prescribed by guidance provided by the
Securities and Exchange Commission. This decision was based on the lack of historical data due to our limited number of stock option
exercises under the 2010 Equity Incentive Plan. We will continue to assess the appropriateness of the use of the simplified method as we
develop a history of option exercises.

Recently Adopted Accounting Pronouncements

In May 2014, the FASB, issued Accounting Standards Update, or ASU No. 2014-09, Revenue from Contracts with Customers
(Topic 606), which provides for new accounting guidance related to revenue recognition. This new standard replaced all prior U.S. GAAP
guidance on this topic and eliminated all industry-specific guidance. The new revenue recognition standard provides a unified model to
determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of
promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange
for those goods or services. This guidance became effective for MaxLinear on January 1, 2018 and can be applied either retrospectively to
each period presented or as a cumulative-effect adjustment as of the date of adoption. We applied the guidance prospectively with an
adjustment to accumulated deficit for the cumulative effect of adoption. Adoption of the amendments in this guidance accelerated the
timing of our revenue and related cost recognition on products sold via some distributors, which changed from the sell-through method to
the sell-in method under this guidance. We are also required to estimate the effects of pricing credits to our distributors from contractual
price protection and unit rebate provisions, as well as stock rotation rights. We have completed our assessment of the impact of adopting
this new accounting standard on our consolidated financial position and results of operations for the year ended December 31, 2018; such
impact is disclosed above, under the caption "Critical Accounting Policies—Revenue Recognition." The impact to accumulated deficit as
of January 1, 2018 was not material. As a result of applying the guidance prospectively with an adjustment to accumulated deficit in our
consolidated financial statements for the cumulative effect of adoption, revenues that would have been recognized on a sell-through basis
for the amount of deferred revenue and profit remaining as of the adoption date will not be recognized in earnings for any period.

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities.

The amendments in this update include, among other things, a requirement to (1) measure equity investments (except equity method
investments) at fair value with changes in fair value recognized in net income, with an option to measure equity investments that do not
have readily determinable fair values at cost minus any impairment plus or minus any changes resulting from observable price changes;
previously changes in fair value were recognized in other comprehensive income, and (2) separately present financial assets and liabilities
by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statement. The
amendments in this update were effective for us beginning in the first

quarter of fiscal year 2018. The adoption of the amendments in this update did not have a material impact on our consolidated financial
position and results of operations for the year ended December 31, 2018.

In March 2016, the FASB issued ASU No. 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net )

to clarify the revenue recognition implementation guidance on principal versus agent considerations. The amendments in this update clarify
that when another party is involved in providing goods or services to a customer, an entity that is the principal has obtained control of a
good or service before it is transferred to a customer, and provides indicators to assist an entity in determining whether it controls a
specified good or service prior to the transfer to the customer. An entity that is the principal recognizes revenue in the gross amount of
consideration to which it expects to be entitled in exchange for the specified good or service transferred to the customer, whereas an agent
recognizes revenue in the amount of any fee or commission to which it expects to be entitled in exchange for arranging for the specified
good or service to be provided by the other party. The amendments in this update were effective for us beginning in the first quarter of
fiscal year 2018, concurrent with and applied on the same basis as the new revenue recognition standard. The adoption of the amendments
in this update did not have a material impact on our consolidated financial position and results of operations for the year ended December
31, 2018.

In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments to eliminate the

diversity in practice regarding the presentation and classification of certain cash receipts and cash payments, including, among other things,
contingent consideration payments made following a business combination, proceeds from the settlement of insurance claims in the
statement of cash flows, and debt prepayment or debt extinguishment costs. Cash payments not made soon after the acquisition date up to
the amount of the contingent consideration liability recognized at the acquisition date should be classified as financing activities and any
excess payments should be classified as operating activities, whereas cash payments made soon after the acquisition date to settle the
contingent consideration should be classified as investing activities and cash payments for debt prepayment or debt extinguishment costs
should be classified as financing activities. Cash proceeds received from settlement of insurance claims should be classified on the basis of
the nature of the related losses. The amendments in this update should be applied using a retrospective transition method to each period
presented, unless impracticable, and if impracticable, would be applied prospectively as of the earliest date practicable. The amendments in
this update were effective for us beginning in the first quarter of fiscal year 2018. The adoption of the amendments in this update did not
have a material impact on our consolidated statements of cash flows for the year ended December 31, 2018.

In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification
Accounting to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic
718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in this
update require us to account for the effects of a modification in a stock-based award unless the fair value, vesting conditions and
classification of the modified award is the same as those of the original award immediately before the original award is modified. If the
modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to
estimate the value immediately before and after the modification. The amendments in this update were effective for us for fiscal years
beginning with fiscal year 2018, including interim periods within those years, with early adoption permitted in any interim period. The
amendments in this update are applied prospectively to an award modified on or after the adoption date. Since we have not had any
modifications to stock-based awards that do not affect the inputs into the Black Scholes fair value calculation, the adoption of this guidance
did not have a material impact on our consolidated financial position and results of operations for the year ended December 31, 2018.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs
Act, or the Tax Act. The Tax Act makes broad and complex changes to the U.S. tax code. On December 22, 2017, the U.S. Securities and
Exchange Commission Staff, or SEC Staff, issued guidance in Staff Accounting Bulletin No. 118, or SAB 118, to address certain fact
patterns where the accounting for changes in tax laws or tax rates under ASC Topic 740 is incomplete upon issuance of an entity's financial
statements for the reporting period in which the Tax Act is enacted. As permitted in SAB 118, in 2017, we took a measurement period
approach and reported certain provisional amounts, based on reasonable estimates, for certain tax effects in which the accounting under
ASC 740 is incomplete. Such provisional amounts are subject to adjustment during a limited measurement period, not to extend one year
beyond the tax law enactment date, until the accounting under ASC 740 is complete. We completed the accounting required under ASC
740 in 2018; however as new guidance and interpretations of the tax law become available, any further adjustments related to the enacted
tax laws could result in a material adverse impact on our net income and our financial position in 2019.

In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other

Comprehensive Income. The amendments in this update allow a reclassification from accumulated other comprehensive income to retained
earnings for stranded tax effects resulting from the Tax Act. The amendments in this update are effective for us beginning in fiscal 2019,
including interim periods. Early adoption is permitted. The amendments should be applied either in the period of adoption or
retrospectively to each period or periods in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act is
recognized. We adopted the amendments in this update in the year ended December 31, 2018. The adoption of this guidance did not have a
material impact on our consolidated financial position and results of operations for the year ended December 31, 2018.

In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC
Staff Accounting Bulletin No. 118. The amendments in this update amend the SEC paragraphs included in Topic 740 to be consistent with
the guidance in SAB 118, which we adopted in the year ended December 31, 2017, as described above.

In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee

Share-Based Payment Accounting, to expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and
services from nonemployees. As a result, the accounting for share-based payment awards to nonemployees and employees will be
substantially aligned by eliminating the need to measure nonemployee share-based awards at fair value on the earlier of performance
commitment date or date performance is complete. Both employee and nonemployee share-based awards are now measured at grant-date
fair value. The amendments in this update are effective for us beginning with fiscal year 2019, including interim periods, with early
adoption permitted, but no earlier than our adoption of Topic 606. We elected to early adopt the amendments in this update as of July 1,
2018, with the cumulative effect of the change recorded against accumulated deficit as of July 1, 2018. As our nonemployee share-based
awards are not significant, such adoption did not have a material impact on our consolidated accumulated deficit as of July 1, 2018.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The amendments in this update require a lessee to
recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing
its right to use the underlying asset for the lease term for all leases with terms greater than twelve months. For leases less than twelve
months, an entity is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease
liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease
term. We intend to make this election, along with other available practical expedients. Also, in July 2018, the FASB issued ASU No. 2018-
11, Leases (Topic 842): Targeted Improvements, to provide an additional transition method. An entity can now elect not to present
comparative financial information under Topic 842 if it recognizes a cumulative-effect adjustment to retained earnings upon adoption. We
plan to elect this transition option in our adoption of Topic 842. The amendments in these updates are effective for us for fiscal years
beginning with 2019, including interim periods within those years, with early adoption permitted. We have performed an assessment of the
impact of the adoption of the amendments in these updates on our consolidated financial position and results of operations for our leases,
which primarily consist of facility leases. Based on that assessment, we have estimated that the adoption of Topic 842 will result in the
recognition of approximately $24 million of right-of-use assets and lease liabilities as of January 1, 2019 based on the present value of
future minimum lease payments. Also, the impacts from the adoption of Topic 842 to our accumulated deficit as of January 1, 2019 and to
our consolidated results of operations for the year ending December 31, 2019 are not expected to be material.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for
Goodwill Impairment, to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. An
entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a
reporting unit to all of its assets and liabilities as if the reporting unit had been acquired in a business combination. Instead, under the
amendments in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a
reporting unit with its carrying amount. The Board also eliminated the requirements for any reporting unit with a zero or negative carrying
amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. The
amendments in this update are effective for us beginning with fiscal year 2020, including interim periods, with early adoption permitted for
interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of the amendments in this
update is not expected to have a material impact on our consolidated financial position and results of operations.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815), which is intended to improve accounting for

hedging activities by expanding and refining hedge accounting for both nonfinancial and financial risk components and aligning the
recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The amendments in
this update are effective for us for fiscal years beginning with fiscal year 2019, including interim periods within those years, with early
adoption permitted in any interim period. The amendments in this update should be applied prospectively. We are currently evaluating the
expected impact of the amendments, but do not expect these to have a material impact on our consolidated financial statements upon
adoption.

In July 2018, the FASB issued ASU No. 2018-09, Codification Improvements, to clarify the Codification and prevent any

unintended applications of guidance. An amendment to ASC 718-740, Compensation—Stock Compensation—Income Taxes, clarifies that
excess tax benefits should be recognized in the period in which the amount of the deduction is determined. The transition and effective date
guidance is based on the facts and circumstances of each amendment. The amendment identified above is effective for us beginning with
fiscal year 2019. The adoption of the amendments in this update is not expected to have a material impact on our consolidated financial
position and results of operations.

In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases, to clarify on how to apply
certain aspects of the new leases standard. The amendments in this update, among other things, better articulates the requirement for a
lessee's reassessment of lease classification as of the effective date of a modification, clarifies that a change to an index or rate for variable
lease payments does not constitute a resolution of a contingency that would result in the remeasurement of lease payments, and requires
entities that apply Topic 842 retrospectively to each reporting period and do not adopt the practical expedients to write off any prior
unamortized initial direct costs that do not meet the definition under Topic 842 to equity. The amendments have the same effective date and
transition requirements as the new lease standard summarized above. We have disclosed the impact of adoption of Topic 842 on our
consolidated financial position and results of operations as stated above.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework— Changes to
the Disclosure Requirements for Fair Value Measurement, to improve the fair value measurement reporting of financial instruments. The
amendments in this update require, among other things, added disclosure of the range and weighted average of significant unobservable
inputs used to develop Level 3 fair value measurements. The amendments in this update eliminate, among other things, disclosure of the
reasons for and amounts of transfers between Level 1 and Level 2 for assets and liabilities that are measured at fair value on a recurring
basis and an entity's valuation processes for Level 3 fair value measurements. The amendments in this update will be effective for us
beginning with fiscal year 2020, with early adoption permitted. Retrospective application is required for all amendments in this updated
except the added disclosures, which should be applied prospectively. The adoption of the amendments in this update is not expected to have
a material impact on our consolidated financial position and results of operations.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles- Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, to provide
additional guidance on the accounting for costs of implementing cloud computing arrangements that are service contracts. The
amendments in this update require the capitalization of implementation costs during the application development stage of such hosting
arrangements and amortization of the expense over the term of the arrangement including any option to extend reasonably certain to be
exercised or option to terminate reasonably certain not to be exercised. Capitalized implementation costs and amortization thereof are also
required to be classified in the same line item in the statements of financial position, operations and cash flows associated with the hosting
service fees. The amendments in this update will be effective for us beginning with fiscal year 2020, with early adoption permitted. We
may select retrospective or prospective application to all implementation costs incurred after the adoption date. The adoption of the
amendments in this update is not expected to have a material impact on our consolidated financial position and results of operations.

Results of Operations

The following describes the line items set forth in our consolidated statements of operations.

Net Revenue. Net revenue is generated from sales of radio-frequency, analog and mixed-signal integrated circuits for the connected
home, wired and wireless infrastructure, and industrial and multi-market applications. A significant portion of our sales are to distributors,
who then resell our products.

Cost of Net Revenue. Cost of net revenue includes the cost of finished silicon wafers processed by third-party foundries; costs

associated with our outsourced packaging and assembly, test and shipping; costs of personnel, including stock-based compensation, and
equipment associated with manufacturing support, logistics and quality assurance; amortization of acquired developed technology
intangible assets and inventory step-ups to fair value; amortization of certain production mask costs; cost of production load boards and
sockets; and an allocated portion of our occupancy costs.

Research and Development. Research and development expense includes personnel-related expenses, including stock-based
compensation, new product engineering mask costs, prototype integrated circuit packaging and test costs, computer-aided design software
license costs, intellectual property license costs, reference design development costs, development testing and evaluation costs, depreciation
expense and allocated occupancy costs. Research and development activities include the design of new products, refinement of existing
products and design of test methodologies to ensure compliance with required specifications. All research and development costs are
expensed as incurred.

Selling, General and Administrative. Selling, general and administrative expense includes personnel-related expenses, including

stock-based compensation, amortization of certain acquired intangible assets, third-party sales commissions, field application engineering
support, travel costs, professional and consulting fees, legal fees, depreciation expense and allocated occupancy costs.

Impairment Losses. Impairment losses consist of charges resulting from the impairment of acquired intangible assets.

Restructuring Charges. Restructuring charges consist of severance, lease and leasehold impairment charges, and other charges

related to restructuring plans.

Interest and Other Income (Expense), Net. Interest and other income (expense), net includes interest income, interest expense and

other income (expense). Interest income consists of interest earned on our cash, cash equivalents and restricted cash balances. Interest
expense consists of interest accrued on debt. Other income (expense) generally consists of income (expense) generated from non-operating
transactions.

Income Tax Provision (Benefit). We make certain estimates and judgments in determining income tax expense for financial

statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from
differences in the timing of recognition of revenue and expenses for tax and financial statement purposes and the realizability of assets in
future years.

The following table sets forth our consolidated statement of operations data as a percentage of net revenue for the periods indicated:

Net revenue
Cost of net revenue
Gross profit
Operating expenses:

Research and development
Selling, general and administrative
Impairment losses
Restructuring charges

Total operating expenses
Income (loss) from operations
Total interest and other income (expense), net
Income (loss) before income taxes
Income tax provision (benefit)
Net income (loss)

Net Revenue

Connected home

% of net revenue

Infrastructure

% of net revenue

Industrial and multi-market

% of net revenue

Total net revenue

Years Ended December 31,

2018

2017

2016

100%

46
54

31
26
1
1
59
(5)
(4)
(9)
(2)
(7)%

100%
51
49

27
25
—

2
54
(5)
(3)
(8)
(6)
(2)%

100%
41
59

25
17
—
1
43
16
—
16
—
16%

Years Ended December 31,

% Change

2018

2017

2016

2018

2017

207,336

(dollars in thousands)
$

288,610

346,990

(28)%

(17)%

54%

69%

89%

82,388

71,779

37,411

15 %

92 %

21%

17%

95,273

59,929

25%

14%

10%

3,431

59 %

1,647 %

384,997

420,318

387,832

(8)%

8 %

Net revenue decreased $35.3 million to $385.0 million for the year ended December 31, 2018, as compared to $420.3 million for the
year ended December 31, 2017. The decrease in connected home net revenue of $81.3 million was driven by the anticipated declines from
legacy product shipments used in satellite, terrestrial, and video SoC applications, as well as a slowdown in the cable market, which
impacted both cable and related MoCA product shipments, owing to the market transition from DOCSIS 3.0 to DOCSIS 3.1 and related
customer inventory reductions, partially offset by increased G.hn product shipments. The increase in infrastructure revenues of $10.6
million primarily related to the incremental contribution of shipments from our power management and data encryption products and
increased wireless infrastructure shipments, which were partially offset by declines in our high-speed interconnect products serving the
Chinese Metro market infrastructure build-outs and last-mile broadband access deployments in China. The increase in industrial and multi-
market revenue of $35.3 million was related to the incremental contribution of shipments of high performance analog products.

Net revenue increased $32.5 million to $420.3 million in the year ended December 31, 2017, as compared to $387.8 million in the

year ended December 31, 2016. The decrease in connected home net revenue of $58.4 million was primarily driven by the anticipated
declines in our satellite analog channel-stacking solutions for the satellite pay-TV market and legacy video SoCs used primarily in cable
digital-to-analog (DTA) converter applications, which declined significantly year-over-year. These reductions were partially offset by
increased cable modem and data gateway sales. The increase in infrastructure revenues of $34.4 million primarily related to the incremental
contribution of shipments from our wireless infrastructure backhaul business, and from power management and data encryption products,
which were partially offset by year-over-year declines in our high-speed interconnect products serving the Chinese Metro market
infrastructure build-outs. The increase in industrial and multi-market revenues of $56.5 million was primarily related to the incremental
contribution of shipments of high performance analog products.

We currently expect that revenue will fluctuate in the future, from period-to-period, based on evolving customer demand for existing

products, the pace of adoption of newer products, and macroeconomic conditions.

Cost of Net Revenue and Gross Profit

Years Ended December 31,

% Change

2018

2017

2016

2018

2017

Cost of net revenue
% of net revenue

Gross profit

% of net revenue

176,223

(dollars in thousands)
$

212,355

157,842

(17)%

35 %

46%

51%

41%

208,774

207,963

229,990

— %

(10)%

54%

49%

59%

Cost of net revenue decreased $36.1 million to $176.2 million for the year ended December 31, 2018, as compared to $212.4 million

for the year ended December 31, 2017. The decrease was primarily driven by lower sales and a decrease in acquired inventory step-up
amortization of $25.6 million primarily related to the acquisitions of Exar and the G.hn business, partially offset by an increase in acquired
intangible amortization of $10.5 million primarily related to these acquisitions. The increase in gross profit percentage for the year ended
December 31, 2018, as compared to the year ended December 31, 2017, was due to the decrease in acquired inventory step-up amortization.

Cost of net revenue increased $54.5 million to $212.4 million for the year ended December 31, 2017, as compared to $157.8 million

for the year ended December 31, 2016. This increase was primarily driven by increased inventory step-up amortization of $19.9 million
and acquired intangible amortization of $16.8 million primarily related to the acquisitions of Exar, the G.hn business, and the wireless
infrastructure businesses, respectively, and higher sales. The decrease in gross profit percentage for the year ended December 31, 2017, as
compared to the year ended December 31, 2016, was due to a decrease in sales of higher margin products and the previously mentioned
increase in amortization of inventory step-up and intangible amortization.

We currently expect that gross profit percentage will fluctuate in the future, from period-to-period, based on changes in product mix,

average selling prices, and average manufacturing costs.

Research and Development

Years Ended December 31,

% Change

2018

2017

2016

2018

2017

Research and development

% of net revenue

120,046

(dollars in thousands)
$

112,279

97,745

15%

31%

27%

25%

Research and development expense increased $7.8 million to $120.0 million for the year ended December 31, 2018 from $112.3

million in the year ended December 31, 2017. The increase was primarily due to an increase in prototype expenses of $4.3 million for new
projects in the 2018 period, and an increase in payroll-related expenses of $3.4 million primarily related to the acquisitions of Exar and the
G.hn business. In addition, occupancy expenses increased by $0.8 million partially due to new office leases as well as leases assumed in the
2017 acquisitions; equipment rentals and maintenance increased by $0.3 million; and travel-related expense increased by $0.3 million.
Such increases were partially offset by a decrease in depreciation expense of $1.0 million as certain fixed assets reached the end of their
useful lives, and a decrease in outside services of $0.3 million.

Research and development expense increased $14.5 million to $112.3 million for the year ended December 31, 2017, as compared to

$97.7 million for the year ended December 31, 2016. The increase was primarily due to increases in payroll-related expense of $11.2
million, computer-aided design tools expense of $2.1 million, and depreciation expense of $1.9 million related to our acquisitions of Exar,
the G.hn business, and the wireless infrastructure businesses, respectively. These increases were partially offset by lower prototype
expenses of $1.2 million due to timing of projects.

We expect our research and development expenses to decrease or remain relatively flat in the near term; however, our expenses may

increase in the future as we continue to focus on expanding our product portfolio and enhancing existing products.

Selling, General and Administrative

Years Ended December 31,

% Change

2018

2017

2016

2018

2017

Selling, general and administrative

101,789

(dollars in thousands)
$

105,831

64,454

(4)%

64%

% of net revenue

26%

25%

17%

Selling, general and administrative expense decreased $4.0 million to $101.8 million for the year ended December 31, 2018, as

compared to $105.8 million for the year ended December 31, 2017. The decrease was primarily due to decreases in professional fees of
$9.9 million primarily related to merger and acquisition expenses in the prior year, commission expense of $1.9 million, outside services of
$0.4 million, and depreciation of $0.2 million. These decreases were partially offset by increases in payroll-related expenses of $5.3 million
and intangible asset amortization of $3.1 million mainly related to previously mentioned acquisitions in 2017.

Selling, general and administrative expense increased $41.4 million to $105.8 million for the year ended December 31, 2017, as
compared to $64.5 million for the year ended December 31, 2016. The increase was primarily due to increases, including a full year impact
of certain expenses, in intangible amortization expense of $21.9 million, payroll-related expenses of $9.7 million, professional fees of $7.8
million and occupancy expenses of $1.2 million, each primarily related to our acquisitions of Exar and the G.hn business, and the wireless
infrastructure businesses, respectively.

We expect selling, general and administrative expenses to decrease or remain relatively flat in the near-term; however, our expenses

may increase in the future as we expand our sales and marketing organization to enable market expansion.

Impairment Losses

Impairment losses
% of net revenue

Years Ended December 31,

% Change

2018

2017

2016

2,198

(dollars in thousands)
$

2,000

—%

1,300

—%

2018

10%

2017

54%

Impairment losses increased $0.2 million to $2.2 million for the year ended December 31, 2018, compared to $2.0 million for the

year ended December 31, 2017. Impairment losses increased $0.7 million to $2.0 million for the year ended December 31, 2017, compared
to $1.3 million for the year ended December 31, 2016.

Impairment losses in 2018 consisted of acquired developed technology of Exar. Impairment losses in 2017 consisted of acquired in-
process research and development technology of Exar. Impairment losses in 2016 consisted of acquired in-process R&D technology of the
wireless infrastructure access business.

Restructuring charges

Restructuring charges
% of net revenue

Years Ended December 31,

% Change

2018

2017

2016

2018

2017

3,838

(dollars in thousands)
$
$

9,524

3,432

(60)%

178%

Restructuring charges decreased $5.7 million to $3.8 million for the year ended December 31, 2018, compared to $9.5 million for
the year ended December 31, 2017. Restructuring charges increased $6.1 million to $9.5 million for the year ended December 31, 2017,
compared to $3.4 million for the year ended December 31, 2016.

Restructuring charges in 2018 primarily consisted of severance-related charges of $2.1 million in connection with employee

separation expenses and lease restructuring charges of $1.6 million related to exiting certain redundant facilities.

Restructuring charges in 2017 primarily consisted of $5.1 million of incremental stock-based compensation from the acceleration of

certain stock-based awards we assumed from Exar due to change in control provisions upon termination or diminution of authority of
former Exar executives, other severance-related charges of $3.2 million, and lease restructuring charges of $1.0 million related to exiting
certain redundant facilities.

Restructuring charges in 2016 primarily consisted of lease and leasehold impairment charges of $2.3 million and employee
severance and stock compensation expenses of $1.0 million. Lease restructuring charges in 2016 primarily related to adjustments to the
estimates of net present value of the remaining lease obligation for actual sublease income and period costs associated with certain vacated
facilities, including commissions to brokers involved in subleasing property, under lease arrangements, and exiting certain other leased
facilities.

Interest and Other Income (Expense)

Years Ended December 31,

% Change

2018

2017

2016

2018

2017

Interest and other income (expense), net

(13,755)

(dollars in thousands)
$

(12,327)

% of net revenue

(4)%

(3)%

631
—%

12%

(2,054)%

Interest and other income (expense), net changed by $1.4 million from a net expense of $12.3 million in the year ended December
31, 2017 to a net expense of $13.8 million for the year ended December 31, 2018. The change in interest and other income (expense), net
was primarily due to an increase in interest expense of $3.9 million related to interest charges on debt outstanding under our term loan
facility, which was partially offset by an increase in other income of $2.6 million primarily from fluctuations in foreign currency
transactions.

Interest and other income (expense), net reversed by $13.0 million to $12.3 million of net expense for the year ended December 31,

2017. The decrease in interest and other income (expense), net was primarily due to interest expense of $10.4 million related to interest
charges on debt outstanding under our term loan facility during 2017, as well as increases in other expenses related to fluctuations in
foreign currency transactions as a result of increased activities from existing and recently acquired foreign subsidiaries.

Income Tax Provision (Benefit)

Income tax provision (benefit)
% of pre-tax income (loss)

Years Ended December 31,

% Change

2018

2017

2016

2018

2017

(6,653)

(dollars in thousands)
$

(24,811)

20%

73%

2,398

(73)%

(1,135)%

The income tax benefit for the year ended December 31, 2018 was $6.7 million or approximately 20% of pre-tax loss compared to

an income tax benefit of $24.8 million or approximately 73% of pre-tax loss for the year ended December 31, 2017. The income tax
provision in the year ended December 31, 2016 was $2.4 million or approximately 4% of pre-tax income.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs
Act, or the Tax Act, which included the reduction of the U.S. federal corporate tax rate from 35% to 21%. Additionally, in April 2017, our
subsidiary in Singapore began operating under certain tax incentives in Singapore, which reduced our Singapore corporate tax rate from
17% to a concessionary rate as described in more detail below.

The income tax benefit for the year ended December 31, 2018 primarily related to a partial release of our valuation allowance as a

result of the Tax Act and the mix of pre-tax income among jurisdictions, excess tax benefits related to stock-based compensation, and
release of uncertain tax positions under ASC 740-10.

The income tax benefit for the year ended December 31, 2017 primarily related to the release of the federal valuation allowance in

2017, partially offset by certain discrete tax effects related to initial intercompany royalties from our Singapore subsidiary to our U.S.
parent and the impacts of reductions in our U.S. federal corporate tax rates under the Tax Act and reductions to our foreign corporate tax
rates on our deferred income taxes in Singapore as a result of the concessionary income tax rates in Singapore. The income tax benefit for
the year ended December 31, 2017 included provisional estimates for certain tax effects of the Tax Act for which accounting under ASC
740 was incomplete. Provisional amounts related to the Tax Act were subject to adjustment during a one-year measurement period, which
ended December 31, 2018. During 2018, we recorded an additional income tax benefit of $11.3 million for a reduction to our federal
valuation allowance on certain net operating loss carryforwards as a result of additional projected federal taxable income resulting from the
Tax Act. Other changes to provisional amounts related to the Tax Act did not have a material impact on our income tax benefit for 2018.

The provision for income taxes for the year ended December 31, 2016 primarily related to federal alternative minimum tax due to

our limitation on use of net operating losses, credit carryforwards, state income taxes, and income taxes in certain foreign jurisdictions.
Certain significant or unusual items are separately recognized in the quarter during which they occur and can be a source of variability in
the effective tax rates from quarter to quarter. During 2016, we adopted ASU No. 2016-09, Improvements to Share-Based Compensation,
which resulted in the recognition of net excess tax benefits on share-based awards within the provision for income taxes in the consolidated
statement of operations. For the year ended December 31, 2016, the impact of including net excess tax benefits was to reduce the provision
for income taxes by $8.3 million in the consolidated statement of operations.

We continue to maintain a valuation allowance to offset state and certain federal and foreign deferred tax assets, as realization of

such assets does not meet the more-likely-than-not threshold required under accounting guidelines. In making such determination, we
consider all available positive and negative evidence quarterly, including scheduled reversals of deferred tax liabilities, projected future
taxable income, tax planning strategies, and recent financial performance. Based upon our review of all positive and negative evidence, in
2017, we released $51.2 million in valuation allowance against certain of our deferred tax assets. In 2018, we released an additional $11.3
million of our valuation allowance as a result of the completion of our analysis of the effects of the Tax Act. We continue to have a
valuation allowance on state deferred tax assets, certain federal deferred tax assets, and certain foreign deferred tax assets in jurisdictions
where we have cumulative losses or otherwise are not expected to utilize certain tax attributes. We do not incur income tax expense or
benefit in certain tax-free jurisdictions in which we operate.

In the quarter ended June 30, 2017, our subsidiary in Singapore began operating under certain tax incentives in Singapore, which are
generally effective through March 2022 and may be extended through March 2027. Under these incentives, qualifying income derived from
certain sales of our integrated circuits is taxed at a concessionary rate over the incentive period. We also receive a reduced withholding tax
rate on certain intercompany royalty payments made by our Singapore subsidiary during the incentive period. Such incentives are
conditional upon our meeting certain minimum employment and investment thresholds within Singapore over time, and we may be
required to return certain tax benefits in the event we do not achieve compliance related to that incentive period. We currently believe that
we will be able to satisfy these conditions without material risk. Primarily because of our Singapore net operating losses and our full
valuation allowance in Singapore, we do not believe the incentives will have a material impact on our income tax position in the year
ending December 31, 2019.

Liquidity and Capital Resources

As of December 31, 2018, we had cash and cash equivalents of $73.1 million, restricted cash of $1.0 million, and net accounts

receivable of $59.5 million. Additionally, as of December 31, 2018, our working capital was $110.0 million.

Our primary uses of cash are to fund operating expenses, purchases of inventory, property and equipment, intangible assets, and from

time to time, the acquisition of businesses. We also use cash to pay down outstanding debt. Our cash and cash equivalents are impacted by
the timing of when we pay expenses as reflected in the change in our outstanding accounts payable and accrued expenses. Cash used to fund
operating expenses in our consolidated statements of cash flows excludes the impact of non-cash items such as stock-based compensation,
amortization and depreciation of acquired intangible assets and property and equipment, and impairment of intangible assets. Cash used to
fund acquisitions of businesses and other capital purchases is included in investing activities in our consolidated statements of cash flows.
Cash used to pay down outstanding debt is included in financing activities in our consolidated statements of cash flows.

Our primary sources of cash are cash receipts on accounts receivable from our shipment of products to distributors and direct

customers. Aside from the amounts billed to our customers, net cash collections of accounts receivable are impacted by

the efficiency of our cash collections process, which can vary from period to period depending on the payment cycles of our major
distributor customers, and relative linearity of shipments period-to-period. Our credit agreement, under which we entered into a term loan
to partially fund our acquisition of Exar, permits us to request incremental loans in an aggregate principal amount not to exceed the sum of
$160.0 million (subject to adjustments for any voluntary prepayments), plus an unlimited amount that is subject to pro forma compliance
with certain secured leverage ratio and total leverage ratio tests. We have not requested any incremental loans to date.

Following is a summary of our working capital, cash and cash equivalents, and restricted cash for the periods indicated:

Working capital

Cash and cash equivalents
Short-term restricted cash
Long-term restricted cash
Total cash and cash equivalents, restricted cash and investments

December 31,

2018

2017

(in thousands)

110,044 $

124,918

73,142 $
645
404
74,191 $

71,872
1,476
1,064
74,412

Following is a summary of our cash flows provided by (used in) operating activities, investing activities and financing activities for

the periods indicated:

Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash, cash equivalents and restricted cash
Increase (decrease) in cash, cash equivalents and restricted cash

Cash Flows from Operating Activities

Years Ended December 31,

2018

2017

2016

(in thousands)

102,689 $
(7,825)
(93,784)
(1,301)

(221) $

75,064 $

(432,151)
347,021
1,582
(8,484) $

117,317
(101,313)
(670)
(394)
14,940

Net cash provided by operating activities was $102.7 million for the year ended December 31, 2018. Net cash provided by operating

activities consisted of positive cash flow from $100.3 million in non-cash expenses and $28.6 million in changes in operating assets and
liabilities, partially offset by net loss of $26.2 million. Non-cash items included in net loss for the year ended December 31, 2018 primarily
included depreciation and amortization of property, equipment, and acquired intangible assets of $79.0 million, stock-based compensation
of $31.7 million, and impairment of intangible assets of $2.2 million, partially offset by deferred income taxes of $12.1 million and excess
tax benefits on stock-based awards of $2.0 million.

Net cash provided by operating activities was $75.1 million for the year ended December 31, 2017. Net cash provided by operating
activities consisted of $89.8 million in non-cash operating expenses, partially offset by net loss of $9.2 million and $5.6 million in changes
in operating assets and liabilities, respectively. Non-cash items included in net loss for the year ended December 31, 2017 primarily
included depreciation and amortization expense of $66.7 million, stock-based compensation of $32.7 million, amortization of step-up to
fair value of acquired inventory of $25.6 million, loss on foreign currency of $2.2 million, and impairment charges on intangible assets of
$2.0 million, partially offset by deferred income taxes of $31.8 million and excess tax benefits on stock-based awards of $8.6 million.

Net cash provided by operating activities was $117.3 million for the year ended December 31, 2016. Net cash provided by operating
activities consisted of net income of $61.3 million, $48.2 million in non-cash operating expenses, and $7.8 million in changes in operating
assets and liabilities. Non-cash items included in net income for the year ended December 31, 2016 primarily included depreciation and
amortization expense of $26.7 million, stock based compensation of $21.8 million, amortization of inventory step up of $5.6 million,
impairment charges on intangible assets of $1.3 million, and impairment and restructuring on leases of $0.4 million, partially offset by
excess tax benefits on stock-based awards of $8.3 million.

Cash Flows from Investing Activities

Net cash used in investing activities was $7.8 million for the year ended December 31, 2018. Net cash used in investing activities

primarily consisted entirely of $7.8 million in purchases of property and equipment.

Net cash used in investing activities was $432.2 million for the year ended December 31, 2017. Net cash used in investing activities

primarily consisted of $452.3 million in cash used in the acquisition of Exar, net of cash acquired, $21.0 million in cash used in the
acquisition of the G.hn business, $30.6 million in purchases of securities, $7.5 million in purchases of property and equipment, and $5.4
million in purchases of intangible assets, partially offset by $84.5 million in maturities of securities.

Net cash used in investing activities was $101.3 million for the year ended December 31, 2016. Net cash used in investing activities

primarily consisted of $101.0 million cash used in our acquisitions of the wireless infrastructure access and backhaul businesses, $90.3
million in purchases of securities, and $8.5 million in purchases of property and equipment, partially offset by $98.9 million in maturities of
securities.

Cash Flows from Financing Activities

Net cash used in financing activities was $93.8 million for the year ended December 31, 2018. Net cash used in financing activities

consisted primarily of cash outflows from aggregate prepayments of principal of $93.0 million and $7.6 million in minimum tax
withholding paid on behalf of employees for restricted stock units, partially offset by cash inflows of $6.8 million in net proceeds from
issuance of common stock upon exercise of stock options.

Net cash provided by financing activities was $347.0 million for the year ended December 31, 2017. Net cash provided by financing

activities primarily consisted of $416.8 million in net proceeds from borrowings under a term loan we entered in connection with the
acquisition of Exar and $12.1 million in net proceeds from issuance of common stock, partially offset by $70.0 million in aggregate
prepayments of principal on outstanding debt and $11.5 million in minimum tax withholding paid on behalf of employees for restricted
stock units.

Net cash used in financing activities was $0.7 million for the year ended December 31, 2016. Net cash used in financing activities
primarily consisted of $7.3 million in minimum tax withholding paid on behalf of employees for restricted stock units, partially offset by
$6.6 million in net proceeds from issuance of common stock.

We believe that our $73.1 million of cash and cash equivalents at December 31, 2018 will be sufficient to fund our projected
operating requirements for at least the next twelve months. We have repaid $163.0 million of debt to date. The credit agreement permits
the Company to request incremental loans in an aggregate principal amount not to exceed the sum of $160.0 million (subject to adjustments
for any voluntary prepayments), plus an unlimited amount that is subject to pro forma compliance with certain secured leverage ratio and
total leverage ratio tests. Incremental loans are subject to certain additional conditions, including obtaining additional commitments from
the lenders then party to the credit agreement or new lenders. The term loan facility has a seven-year term and bears interest at either an
Adjusted LIBOR or an Adjusted Base Rate, at our option, plus a fixed applicable margin.

Our cash and cash equivalents in recent years have been favorably affected by our implementation of an equity-based bonus program

for our employees, including executives. In connection with that bonus program, in February 2018, we issued 0.3 million freely-tradable
shares of our common stock in settlement of bonus awards for the 2017 performance period. We expect to implement a similar equity-based
plan for fiscal 2018, but our compensation committee retains discretion to effect payment in cash, stock, or a combination of cash and stock.

Notwithstanding the foregoing, we may need to raise additional capital or incur additional indebtedness to fund strategic initiatives

or operating activities, particularly if we continue to pursue acquisitions. Our future capital requirements will depend on many factors,
including our rate of revenue growth, the expansion of our engineering, sales and marketing activities, the timing and extent of our
expansion into new territories, the timing of introductions of new products and enhancements to existing products, the continuing market
acceptance of our products and potential material investments in, or acquisitions of, complementary businesses, services or technologies.
Additional funds may not be available on terms favorable to us or at all. If we are unable to raise additional funds when needed, we may
not be able to sustain our operations.

Warranties and Indemnifications

In connection with the sale of products in the ordinary course of business, we often make representations affirming, among other

things, that our products do not infringe on the intellectual property rights of others, and agree to indemnify customers against third-party
claims for such infringement. Further, our certificate of incorporation and bylaws require us to indemnify our officers and directors against
any action that may arise out of their services in that capacity, and we have also entered into indemnification agreements with respect to all
of our directors and certain controlling persons.

Off-Balance Sheet Arrangements

As part of our ongoing business, we do not participate in transactions that generate relationships with unconsolidated entities or

financial partnerships, such as entities often referred to as structured finance or special purpose entities, or SPEs, which would have been
established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As of
December 31, 2018, we were not involved in any unconsolidated SPE transactions.

Contractual Obligations

As of December 31, 2018, future minimum payments under long-term debt, non-cancelable operating leases, inventory purchase

obligations and other obligations were as follows:

Total

Less than 1 year

1-3 years

3-5 years

More than 5 years

Payments due

Long-term debt obligations
Operating lease obligations
Inventory purchase obligations
Other obligations

Total

262,000 $
33,943
65,661
14,375
375,979 $

(in thousands)

— $

9,365
65,661
8,386
83,412 $

— $

18,862
—
5,117
23,979 $

— $

5,716
—
872
6,588 $

262,000
—
—
—
262,000

Other obligations consist of contractual payments due for software licenses.

Our consolidated balance sheet at December 31, 2018 included $7.3 million in other long-term liabilities for uncertain tax positions,

some of which may result in cash payment. The future payments related to uncertain tax positions recorded as other long-term liabilities
have not been presented in the table above due to the uncertainty of the amounts and timing of cash settlement with the taxing authorities.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and

rates. Our market risk exposure is primarily a result of fluctuations in foreign currency exchange rates and interest rates. We do not hold or
issue financial instruments for trading purposes.

Foreign Currency Risk

To date, our international customer and vendor agreements have been denominated mostly in United States dollars. Accordingly, we

have limited exposure to foreign currency exchange rates and do not enter into foreign currency hedging transactions. The functional
currency of certain foreign subsidiaries is the local currency. Accordingly, the effects of exchange rate fluctuations on the net assets of
these foreign subsidiaries’ operations are accounted for as translation gains or losses in accumulated other comprehensive income (loss)
within stockholders’ equity. A hypothetical change of 100 basis points in such foreign currency exchange rates would result in a change to
translation gain/loss in accumulated other comprehensive income of approximately $0.3 million.

Interest Rate Risk

On May 12, 2017, we entered into a credit agreement with certain lenders and a collateral agent in connection with the acquisition of

Exar. The credit agreement provides for an initial secured term B loan facility (the “Initial Term Loan”) in an

aggregate principal amount of $425.0 million. As of December 31, 2018, aggregate borrowings under the Initial Term Loan were $262.0
million. The credit agreement permits the Company to request incremental loans in an aggregate principal amount not to exceed the sum of
$160.0 million (subject to adjustments for any voluntary prepayments), plus an unlimited amount that is subject to pro forma compliance
with certain secured leverage ratio and total leverage ratio tests. Incremental loans are subject to certain additional conditions, including
obtaining additional commitments from the lenders then party to the credit agreement or new lenders. The term loan facility has a seven-
year term and bears interest at either an Adjusted LIBOR or an Adjusted Base Rate, at our option, and, in each case, plus a fixed applicable
margin. In November 2017, to hedge a substantial portion of our existing interest rate risk with respect to the term loans, we entered into a
fixed-for-floating interest rate swap agreement with an amortizing notional amount to swap some of our variable rate interest payments
under our term loans for fixed interest payments bearing an interest rate of 1.74685% through October 2020. Our outstanding debt is still
subject to a 2.5% fixed applicable margin during the term of the loan. As a result of entering the swap, the interest rate on a substantial
portion of our long-term debt is effectively fixed at approximately 4.25%. However, interest rate trends are inherently difficult to predict
and interest rates may significantly increase or decrease over a short period of time. Should interest rates trend below that of our fixed swap
interest rate, we may pay higher interest expense than market and seek to terminate or modify the terms of the swap prior to its maturity
which could result in termination or other fees. We are also still subject to a variable amount of interest on the principal balance in excess
of the notional amount of the interest rate swap and could be adversely impacted by rising interest rates and/or decreased prepayments of
principal in the future. If LIBOR interest rates had increased by 10%, or 1000 basis points, during the periods presented, the rate increase
would have resulted in an increase of approximately $1.8 million to interest expense.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA

The financial statements and supplementary data required by this item are included in Part IV, Item 15 of this Report.

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

None.

ITEM 9A.

CONTROLS AND
PROCEDURES

Evaluation of Disclosure and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic
reports filed with the SEC is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the
SEC and that such information is accumulated and communicated to our management, including our principal executive officer and
principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the
disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated,
can provide only reasonable assurance of achieving the desired control objectives, and no evaluation of controls and procedures can
provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Management is
required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, prior to filing this Form
10-K, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive
officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Form 10-K. Based on their evaluation,
our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of the
end of the period covered by this Form 10-K.

Management’s Annual Report on Internal Controls over Financial Reporting

Our management, including our principal executive officer and principal financial officer, is responsible for establishing and
maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our
management, including our principal executive officer and principal financial officer, evaluated the effectiveness of our internal control
over financial reporting based on criteria established in the Internal Control — Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). Based upon

that evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2018. The
effectiveness of our internal control over financial reporting as of December 31, 2018 has been audited by Grant Thornton LLP, an
independent registered public accounting firm, and Grant Thornton LLP has issued a report on our internal control over financial reporting,
which is included herein.

Changes in Internal Control over Financial Reporting

An evaluation was performed under the supervision and with the participation of our management, including our principal executive
officer and principal financial officer, to determine whether any change in our internal control over financial reporting occurred during the
fiscal quarter ended December 31, 2018 that materially affected, or is reasonably likely to materially affect, our internal control over
financial reporting. There were no changes in our internal control over financial reporting identified in connection with the evaluation
required by paragraph (d) of Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934, as amended, that has materially affected,
or is reasonably likely to materially affect, our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
MaxLinear, Inc.

Opinion on internal control over financial reporting

We have audited the internal control over financial reporting of MaxLinear, Inc. (a Delaware corporation) and subsidiaries (the

“Company”) as of December 31, 2018, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2018, based on criteria established in the 2013 Internal
Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2018, and our report dated
February 5, 2019 expressed an unqualified opinion on those financial statements.

Basis for opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment
of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal
Control over Financial Reporting (“Management's Report”). Our responsibility is to express an opinion on the Company’s internal control
over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent
with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities
and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our
audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists,
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other
procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and limitations of internal control over financial reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability

of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Grant Thornton LLP

Newport Beach, California
February 5, 2019

ITEM 9B.

OTHER
INFORMATION

None.

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE

PART III

The information required by Item 10 with respect to our directors and executive officers will be either (i) included in an amendment
to this Annual Report on Form 10-K or (ii) incorporated by reference to our Definitive Proxy Statement to be filed in connection with our
2019 Annual Meeting of Stockholders, or the 2019 Proxy Statement. Such amendment in the 2019 Proxy Statement will be filed with the
Securities and Exchange Commission no later than 120 days after December 31, 2018.

Item 405 of Regulation S-K calls for disclosure of any known late filing or failure by an insider to file a report required by Section

16(a) of the Exchange Act. This information will be contained under the caption “Related Person Transactions and Section 16(a) Beneficial
Ownership Reporting Compliance” in either an amendment to this Annual Report on Form 10-K or the 2019 Proxy Statement and is
incorporated herein by reference.

Code of Conduct

We have adopted a code of ethics and employee conduct that applies to our board of directors and all of our employees, including

our chief executive officer and principal financial officer.

Our code of conduct is available at our website by visiting www.maxlinear.com and clicking through “Investors,” “Corporate
Governance,” and “Code of Conduct.” When required by the rules of the New York Stock Exchange, or NYSE, or the Securities and
Exchange Commission, or SEC, we will disclose any future amendment to, or waiver of, any provision of the code of conduct for our chief
executive officer and principal financial officer or any member or members of our board of directors on our website within four business
days following the date of such amendment or waiver.

The information required by Item 10 with respect to our audit committee is incorporated by reference from the information set forth
under the caption “Corporate Governance and Board of Directors — Board Committees” in either an amendment to this Annual Report on
Form 10-K or the 2019 Proxy Statement.

ITEM 11.

EXECUTIVE
COMPENSATION

The information required by Item 11 is incorporated by reference from the information set forth under the captions “Compensation

of Non-Employee Directors” and “Executive Compensation" in either an amendment to this Annual Report on Form 10-K or our 2019
Proxy Statement.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS

The information required by Item 12 is incorporated by reference from the information set forth under the captions “Executive

Compensation — Equity Compensation Plan Information” and “Security Ownership” in either an amendment to this Annual Report on
Form 10-K or our 2019 Proxy Statement.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE

The information required by Item 13 is incorporated by reference from the information set forth under the captions “Corporate
Governance and Board of Directors — Director Independence” and “Related Person Transactions and Section 16(a) Beneficial Ownership
Reporting Compliance” in either an amendment to this Annual Report on Form 10-K or our 2019 Proxy Statement.

ITEM 14.

PRINCIPAL ACCOUNTING FEES AND
SERVICES

The information required by Item 14 is incorporated by reference from the information set forth under the caption “Proposal Number

3 — Ratification of Appointment of Independent Registered Public Accounting Firm” in either an amendment to this Annual Report on
Form 10-K or our 2019 Proxy Statement.

PART IV — FINANCIAL INFORMATION

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT
SCHEDULES

a) Documents filed as part of the report

1. Financial Statements

Our consolidated financial statements are attached hereto and listed on the Index to Consolidated Financial Statements set forth on

page F-1 of this Annual Report on Form 10-K.

2. Financial Statement Schedules

Schedule II. Valuation and Qualifying Accounts —Years ended December 31, 2018, 2017 and 2016

All other schedules are omitted as the required information is inapplicable, or the information is presented in the financial

statements or related notes.

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS (in thousands):

Classification
Allowance for doubtful accounts
2018
2017
2016
Warranty reserves
2018
2017
2016
Valuation allowance for deferred tax assets
2018
2017
2016

Balance at
beginning of
year

Additions
(deductions)
charged to
expenses

Other
Additions

(Deductions)

Balance at
end of year

73 $
87
236

941 $
860
157

— $
133
87

(414) $
492
335

— $
27
—

— $
122
489

(27) $
(174)
(236)

(8) $

(533)
(121)

46
73
87

519
941
860

84,560 $
100,284
98,535

(5,761) $
(50,881)
—

397 $

35,157
8,410

— $
—
(6,661)

79,196
84,560
100,284

3. Exhibits

Exhibit Number
2.1

2.2

3.1

3.2

3.3

3.4

4.1

+10.1

+10.2

+10.3

+10.4

+10.5

+10.6

+10.7

+10.8

+10.12

+10.13

10.14

†10.15

Exhibit Title

Agreement and Plan of Merger and Reorganization, dated as of February 3, 2015, by and among MaxLinear, Inc., a
Delaware corporation, Entropic Communications, Inc., a Delaware corporation, Excalibur Acquisition Corporation, a
Delaware corporation and a wholly-owned subsidiary of MaxLinear, and Excalibur Subsidiary, LLC, a Delaware
limited liability company and wholly-owned subsidiary of MaxLinear (incorporated by reference to Exhibit 2.1 to the
Registrant’s Current Report on Form 8-K filed on February 4, 2015 (File No. 001-34666)).
Agreement and Plan of Merger, dated as of March 28, 2017, by and among MaxLinear, Inc., a Delaware corporation,
Exar Corporation, a Delaware corporation, and Eagle Acquisition Corporation, a Delaware corporation and a wholly-
owned subsidiary of MaxLinear (incorporated by reference to Exhibit 2.1 to the Registrant's Current Report on Form
8-K filed on March 29, 2017 (File No. 001-34666)).
Registrant’s Amended and Restated Certificate of Incorporation, as filed with the Secretary of State of the State of
Delaware on March 29, 2010 (incorporated by reference to Exhibit 3.5 of the Registrant’s Registration Statement on
Form S-1 and all amendments thereto (File No. 333-162947)).
Registrant’s Amended and Restated Bylaws, as amended to date (incorporated by reference to Exhibit 3.1 to the
Registrant’s Current Report on Form 8-K filed on November 10, 2015 (File No. 001-34666)).
Registrant’s Amended and Restated Bylaws, as amended to date (incorporated by reference to Exhibit 3.2 to
the Registrant’s Current Report on Form 8-K filed on February 16, 2017 (File No. 001-34666)).
Certificate of Retirement (incorporated by reference to Exhibit 3.1 to the Amendment No. 1 on Form 8-A filed with
the Securities and Exchange Commission on March 30, 2017 (Registration No. 001-34666)).
Specimen common stock certificate of Registrant (incorporated by reference to Exhibit 4.1 of the Registrant’s
Amendment No. 1 on Form 8-A filed on March 30, 2017 (File No. 001-34666)).
Form of Director and Executive Officer Indemnification Agreement (incorporated by reference to Exhibit 10.1 of the
Registrant’s Registration Statement on Form S-1 and all amendments thereto (File No. 333-162947)).
Form of Director and Controlling Person Indemnification Agreement (incorporated by reference to Exhibit 10.2 of the
Registrant’s Registration Statement on Form S-1 and all amendments thereto (File No. 333-162947)).
2004 Stock Plan, as amended (incorporated by reference to Exhibit 10.3 of the Registrant’s Annual Report on Form
10-K filed on February 6, 2013 (File No. 001-34666)).
Form of Stock Option Agreement under the 2004 Stock Plan (incorporated by reference to Exhibit 10.4 of the
Registrant’s Registration Statement on Form S-1 and all amendments thereto (File No. 333-162947)).
Amendment No. 1 to the form of Stock Option Agreement under the 2004 Stock Plan (incorporated by reference to
Exhibit 10.5 of the Registrant’s Registration Statement on Form S-1 and all amendments thereto (File No. 333-
162947)).
2010 Equity Incentive Plan, as amended on December 13, 2018 (incorporated by reference to Exhibit 10.3 of the
Registrant’s Current Report on Form 8-K filed on December 19, 2018 (File No. 001-34666)).
Form of Agreement under the 2010 Equity Incentive (incorporated by reference to Exhibit 10.7 of the Registrant’s
Quarterly Report on Form 10-Q filed on July 28, 2011 (File No. 001-34666)).
2010 Employee Stock Purchase Plan, as amended (incorporated by reference to Exhibit 10.8 of the Registrant’s
Current Report on Form 8-K filed on August 15, 2016 (File No. 001-34666)).
Form of Change in Control Agreement for Chief Executive Officer and Chief Financial Officer (incorporated herein
by reference to Exhibit 10.12 of the Registrant's Annual Report on Form 10-K filed on February 17, 2016).
Form of Change in Control Agreement for Executive Officers (incorporated herein by reference to Exhibit 10.13 of
the Registrant's Annual Report on Form 10-K filed on February 17, 2016).
Lease Agreement, dated May 18, 2009, between the Registrant and JCCE - Palomar, LLC (incorporated by reference
to Exhibit 10.14 of the Registrant’s Registration Statement on Form S-1 and all amendments thereto (File No. 333-
162947)).
Sublease Agreement, dated May 9, 2009, between the Registrant and CVI Laser, LLC (incorporated by reference to
Exhibit 10.15 of the Registrant’s Registration Statement on Form S-1 and all amendments thereto (File No. 333-
162947)).

Exhibit Number
†10.16

+†10.17

†10.18

†10.19

†10.20

+10.21

+10.22

10.23

10.24

10.26

10.28

10.29

10.30

+10.31

+10.32

10.33

10.34

10.35

Exhibit Title

Intellectual Property License Agreement, dated June 18, 2009, between the Registrant and Intel Corporation,
(incorporated by reference to Exhibit 10.16 of the Registrant’s Registration Statement on Form S-1 and all
amendments thereto (File No. 333-162947)).
Employment Offer Letter, dated November 9, 2012, between the Registrant and Will Torgerson (incorporated by
reference to Exhibit 10.17 of the Registrant’s Annual Report on Form 10-K filed on February 6, 2013 (File No. 001-
34666)).
Distributor Agreement, dated June 5, 2009, between the Registrant and Moly Tech Limited (incorporated by
reference to Exhibit 10.18 of the Registrant’s Registration Statement on Form S-1 and all amendments thereto (File
No. 333-162947)).
Distributor Agreement, dated October 3, 2005, between the Registrant and Tomen Electronics Corporation
(incorporated by reference to Exhibit 10.19 of the Registrant’s Registration Statement on Form S-1 and all
amendments thereto (File No. 333-162947)).
Distributor Agreement, dated August 19, 2009, between the Registrant and Lestina International Ltd. (incorporated by
reference to Exhibit 10.20 of the Registrant’s Registration Statement on Form S-1 and all amendments thereto (File
No. 333-162947)).
MaxLinear, Inc. Executive Bonus Plan, as amended (incorporated herein by reference to Exhibit 10.21 of the
Registrant’s Annual Report on Form 10-K filed on February 17, 2016).
Employment Offer Letter, dated April 22, 2011, between the Registrant and Michael LaChance (incorporated by
reference to Exhibit 10.22 of the Registrant’s Annual Report on Form 10-K filed on March 14, 2012 (File No. 001-
34666)).
Stock Repurchase Agreement, dated August 21, 2012, by and among the Registrant, Mission Ventures III, L.P.,
Mission Ventures Affiliates III, L.P., and U.S. Venture Partners VIII, L.P. (incorporated by reference to Exhibit 10.23
of the Registrant’s Current Report on Form 8-K filed on August 22, 2012 (File No. 001-34666)).
Stock Repurchase Agreement, dated October 31, 2012, by and among the Registrant, U.S. Venture Partners VIII, L.P,
USVP VIII Affiliates Fund, L.P., USVP Entrepreneur Partners VIII-A, L.P. and USVP Entrepreneur Partners VIII-B,
L.P. (incorporated by reference to Exhibit 10.24 of the Registrant’s Current Report on Form 8-K filed on October 31,
2012 (File No. 001-34666)).

Lease Agreement, dated December 17, 2013, between Registrant and The Campus Carlsbad, LLC (incorporated by
reference to Exhibit 10.26 of the Registrant’s Annual Report on Form 10-K filed on February 7, 2014 (File No. 001-
34666)).
Form of MaxLinear Voting Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report
on Form 8-K filed on February 4, 2015 (File No. 001-34666)).
Form of Entropic Voting Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on
Form 8-K filed on February 4, 2015 (File No. 001-34666)).
First Amendment to Lease, dated May 6, 2015, between Registrant, on the one hand, and Brookwood CB I, LLC and
Brookwood CB II, LLC, as tenants in common and successors-in-interest to The Campus Carlsbad, LLC, on the other
hand (incorporated by reference to Exhibit 10.1 of Registrant’s Quarterly Report on Form 10-Q filed on August 10,
2015 (File No. 333-34666)).
Entropic Communications, Inc. 2007 Equity Incentive Plan and Form of Option Agreement, Form of Option Grant
Notice thereunder and Notice of Exercise (incorporated herein by reference to Entropic Communication, Inc.’s
Annual Report on Form 10-K filed on March 3, 2008 (File No. 001-33844)).
Entropic Communications, Inc. 2007 Non-Employee Directors’ Stock Option Plan and Form of Option Agreement,
Forms of Grant Notice, and Notice of Exercise thereunder (incorporated herein by reference to Entropic
Communications, Inc.’s Registration Statement on Form S-1 filed on July 27, 2007 (No. 333-144899)).
Lease Agreement, dated November 11, 2015, between Registrant and The Northwestern Mutual Life Insurance
Company (incorporated herein by reference to Exhibit 10.33 of the Registrant’s Annual Report on Form 10-K filed
on February 17, 2016).
Asset Purchase Agreement, by and between the Company and Microsemi, dated as of April 28, 2016 (incorporated
herein by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on April 28, 2016).
Asset Purchase Agreement, dated as of May 9, 2016, by and between the Registrant and Broadcom (incorporated
herein by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on May 9, 2016).

Exhibit Number
+10.36

Exhibit Title
Employment Offer Letter, dated December 21, 2015, between the Registrant and Dana McCarty (incorporated herein
by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 10-Q filed on May 9, 2016).
Employment Promotion Letter, dated February 11, 2016, between the Registrant and Connie Kwong (incorporated
herein by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 10-Q filed on May 9, 2016).
Debt Commitment Letter by and among MaxLinear, Inc., JPMorgan Chase Bank, N.A., Deutsche Bank AG New
York Branch, and Deutsche Bank Securities Inc., dated as of March 28, 2017 (incorporated by reference to Exhibit
10.1 to the Registrant's Current Report on Form 8-K/A filed on March 31, 2017 (File No. 001-34666)).

Credit Agreement, dated as of May 12, 2017, by and among MaxLinear, Inc., the lenders from time to time party
thereto, and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (incorporated by references to
Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on May 12, 2017 (File No. 001-34666)).

Security Agreement, dated as of May 12, 2017, by and among MaxLinear, Inc., the subsidiary guarantors from time to
time party thereto, and JPMorgan Chase Bank, N.A., as collateral agent (incorporated by references to Exhibit 10.2 to
the Registrant's Current Report on Form 8-K filed on May 12, 2017 (File No. 001-34666)).

Employment Offer Letter, dated June 7, 2018, between the Registrant and Steven Litchfield (incorporated by
reference to Exhibit 10.1 to the Registrants Current Report on Form 10-Q filed on August 7, 2018 (File No. 001-
34666)).

Employment Offer Letter, dated June 27, 2018, between the Registrant and Michael Bolleson (incorporated by
reference to Exhibit 10.2 to the Registrants Current Report on Form 10-Q filed on August 7, 2018 (File No. 001-
34666)).

Form of Change in Control Agreement for Chief Executive Officer and Chief Financial Officer, as amended
(incorporated herein by reference to Exhibit 10.1 of the Registrant's Form 8-K filed on December 19, 2018 (File No.
001-34666)).
Form of Change in Control Agreement for Executive Officers, as amended (incorporated herein by reference to
Exhibit 10.2 of the Registrant's Form 8-K filed on December 19, 2018 (File No. 001-34666)).

Executive Incentive Bonus Plan, as amended on December 13, 2018 (incorporated by reference to Exhibit 10.4 of the
Registrant’s Current Report on Form 8-K filed on December 19, 2018 (File No. 001-34666)).

Clawback Policy, as adopted on December 13, 2018 (incorporated by reference to Exhibit 10.5 of the Registrant’s
Current Report on Form 8-K filed on December 19, 2018 (File No. 001-34666)).

Statement re computation of income (loss) per share (included in Part IV, Item 15 of this Form 10-K).
Subsidiaries of the Registrant.
Consent of Independent Registered Public Accounting Firm.
Power of Attorney (included on the signature page of this Form 10-K).
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.

XBRL Instance Document
XBRL Taxonomy Extension Schema Document
XBRL Taxonomy Extension Calculation Linkbase Document
XBRL Taxonomy Extension Definition Linkbase Document
XBRL Taxonomy Extension Label Linkbase Document
XBRL Taxonomy Extension Presentation Linkbase Document

+10.37

10.38

10.39

10.40

+10.41

+10.42

+10.43

+10.44

+10.45

+10.46

*11.1
*21.1
*23.1
*24.1
*31.1
*31.2

#*32.1
101.INS
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE

Filed herewith.

†

In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 33-8238 and 34-47986, Final Rule:
Management’s Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic
Reports, the certifications furnished pursuant to this item will not be deemed “filed” for purposes of Section 18 of the Exchange
Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated
by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically
incorporates it by reference.

Indicates a management contract or compensatory plan.

Confidential treatment has been requested and received for certain portions of these exhibits.

(b) Exhibits

The exhibits filed as part of this report are listed in Item 15(a)(3) of this Form 10-K.

The financial statement schedule required by Regulation S-X and Item 8 of this form is listed in Item 15(a)(2) of this Form 10-K.

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report

to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

Date:

February 5, 2019

MAXLINEAR, INC.

(Registrant)

By:

/s/ KISHORE SEENDRIPU, PH.D

Kishore Seendripu, Ph.D
President and Chief Executive Officer

(Principal Executive Officer)

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Kishore

Seendripu, Ph.D. and Steven Litchfield, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution
and resubstitution, to sign any and all amendments (including post-effective amendments) to this Annual Report on Form 10-K and to file
the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting
unto each of said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each of said attorneys-in-facts and agents, or his substitute or substitutes, or any of them, shall do or cause to be
done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on

behalf of the registrant and in the capacities and on the dates indicated:

Signature
/s/ KISHORE SEENDRIPU, PH.D
Kishore Seendripu, Ph.D

Title
President and Chief Executive Officer
(Principal Executive Officer)

/s/ STEVEN G. LITCHFIELD
Steven G. Litchfield

Chief Financial Officer and Chief Strategy Officer
(Principal Financial Officer)

Corporate Controller
(Principal Accounting Officer)

Date
February 5, 2019

February 5, 2019

/s/ CONNIE KWONG
Connie Kwong

/s/ THOMAS E. PARDUN
Thomas E. Pardun

/s/ DANIEL A. ARTUSI
Daniel A. Artusi

/s/ CAROLYN D. BEAVER
Carolyn D. Beaver

/s/ STEVEN C. CRADDOCK
Steven C. Craddock

/s/ ALBERT J. MOYER
Albert J. Moyer

/s/ DONALD E. SCHROCK
Donald E. Schrock

/s/ THEODORE TEWKSBURY, PH.D

Theodore Tewksbury, Ph.D

Lead Director

February 5, 2019

Director

MaxLinear, Inc.

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income (Loss)
Consolidated Statements of Stockholders’ Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements

77
78
79
80
81
82
83

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
MaxLinear, Inc.

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of MaxLinear, Inc. (a Delaware corporation) and subsidiaries (the
“Company”) as of December 31, 2018 and 2017, the related consolidated statements of operations, comprehensive income (loss),
stockholders' equity and cash flows for each of the three years in the period ended December 31, 2018, and the related notes and financial
statement schedule included under Item 15(a) (collectively referred to as the “financial statements”). In our opinion, the financial
statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results
of its operations and its cash flows for each of the three years in the period ended December 31, 2018, in conformity with accounting
principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”),
the Company's internal control over financial reporting as of December 31, 2018, based on criteria established in the 2013 Internal Control-
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated
February 5, 2019 expressed an unqualified opinion.

Change in accounting principle

As discussed in Note 1 to the financial statements, the Company has changed its method of accounting for revenue from contracts with
customers in 2018 due to the adoption of the new revenue standard using the modified retrospective method with an adjustment to
accumulated deficit as of January 1, 2018 for the cumulative effect of adoption. Periods prior to 2018 have not been adjusted to reflect the
change in accounting principle.

Basis for opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the
Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud,
and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.

/s/ Grant Thornton LLP

We have served as the Company's auditor since 2016.

Newport Beach, California
February 5, 2019

MAXLINEAR, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value amounts)

Assets
Current assets:

Cash and cash equivalents
Short-term restricted cash
Accounts receivable, net
Inventory
Prepaid expenses and other current assets

Total current assets
Long-term restricted cash
Property and equipment, net
Intangible assets, net
Goodwill
Deferred tax assets
Other long-term assets
Total assets
Liabilities and stockholders’ equity
Current liabilities:

Accounts payable
Deferred revenue and deferred profit
Accrued price protection liability
Accrued expenses and other current liabilities
Accrued compensation

Total current liabilities
Deferred rent
Long-term debt
Other long-term liabilities
Total liabilities

Commitments and contingencies

Stockholders’ equity:

Preferred stock, $0.0001 par value; 25,000 shares authorized, no shares issued or outstanding
Common stock, $0.0001 par value; 550,000 shares authorized, 69,551 shares issued and
outstanding at December 31, 2018 and 550,000 shares authorized, 67,400 shares issued and
outstanding at December 31, 2017, respectively
Additional paid-in capital
Accumulated other comprehensive income
Accumulated deficit

Total stockholders’ equity
Total liabilities and stockholders’ equity

See accompanying notes.

December 31,

2018

2017

73,142 $
645
59,491
41,738
5,595
180,611
404
18,404
244,900
238,330
51,518
4,664
738,831 $

15,588 $

—
16,454
23,520
15,005
70,567
4,097
255,757
8,474
338,895

71,872
1,476
66,099
53,434
8,423
201,304
1,064
22,658
315,045
237,992
39,878
6,921
824,862

16,939
4,362
21,571
20,306
13,208
76,386
4,885
347,609
8,558
437,438

—

7
493,287
272
(93,630)
399,936
738,831 $

7
455,497
1,039
(69,119)
387,424
824,862

MAXLINEAR, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

Net revenue
Cost of net revenue
Gross profit
Operating expenses:

Research and development
Selling, general and administrative
Impairment losses
Restructuring charges

Net income (loss) per share:

Basic
Diluted

Shares used to compute net income (loss) per share:

Basic
Diluted

$
$

Years Ended December 31,

2018

2017

2016

384,997 $
176,223
208,774

120,046
101,789
2,198
3,838
227,871
(19,097)
78
(14,255)
422
(13,755)
(32,852)
(6,653)
(26,199) $

(0.38) $
(0.38) $

68,490
68,490

420,318 $
212,355
207,963

112,279
105,831
2,000
9,524
229,634
(21,671)
274
(10,378)
(2,223)
(12,327)
(33,998)
(24,811)
(9,187) $

(0.14) $
(0.14) $

66,252
66,252

387,832
157,842
229,990

97,745
64,454
1,300
3,432
166,931
63,059
572
(104)
163
631
63,690
2,398
61,292

0.96
0.91

63,781
67,653

See accompanying notes.

MAXLINEAR, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)

Net income (loss)
Other comprehensive income (loss), net of tax

Unrealized gain (loss) on investments, net of tax of $0 in 2018, $0
in 2017 and $27 in 2016

Less: Reclassification adjustments of unrealized loss, net of tax
of $0 in 2018, 2017 and 2016

Unrealized gain on investments, net of tax
Foreign currency translation adjustments, net of tax benefit of $200
in 2018, $202 in 2017, and $39 in 2016(1)
Unrealized gain on interest rate swap, net of tax expense of $187
in 2018, tax expense of $257 in 2017, and $0 in 2016

Other comprehensive income (loss)
Total comprehensive income (loss)
___________________________
(1)

Years Ended December 31,

2018

2017

2016

(26,199) $

(9,187) $

61,292

—

—
—

(55)

55
—

(1,572)

2,122

702
(870)
(27,069) $

477
2,599
(6,588) $

—
11

(749)

—
(738)
60,554

Tax amount recognized in Other Long-Term Liabilities of the Consolidated Balance Sheets as part of long-term deferred tax
liabilities.

See accompanying notes.

MAXLINEAR, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands, except share amounts)

Balance at December 31, 2015

Shares repurchased
Conversion of Class B common stock to
Class A common stock
Common stock issued pursuant to equity
awards, net

Employee stock purchase plan

Stock-based compensation

Other comprehensive loss

Net income

Balance at December 31, 2016

Shares repurchased and cancelled
Conversion of Class B common stock to
Class A common stock
Conversion of Class A and B common
stock to common stock
Common stock issued pursuant to equity
awards, net
Vested stock-based awards assumed in
acquisition

Employee stock purchase plan

Stock-based compensation

Other comprehensive income

Net loss

Balance at December 31, 2017
Common stock issued pursuant to equity
awards, net

Employee stock purchase plan

Stock-based compensation
Cumulative effect of adoption of new
accounting principles
Other comprehensive loss

Net loss

Common Stock

Class A
Common Stock

Class B
Common Stock

Amount

— $ — 55,737 $
—
—

—

Shares
5 6,665 $
— —

Additional
Paid-In
Capital
1 $384,961 $
—

—

Accumulated
Other
Comprehensive
Income (Loss)

Accumulated
Deficit

Total
Stockholders’
Equity

(822) $(121,221) $ 262,924
(3)

—

(3)

—

(3)

—

—
—
—
—
—
—
—

2,344
—
279
—
—
—
—
—
—
—
— 58,363
(13)
—

1
6
— —
— —
— —
— —
6 6,668
— —

2,839
—
4,134
—
21,975
—
—
—
—
—
1 413,909
(334)
—

—
—
—
(738)
—
(1,560 )
—

—
—
—
—
61,292
(59,932 )
—

2,840

4,134

21,975

(738)

61,292

352,424

(334)

—

163

—

(163)

—

65,446

7 (58,876)

(6) (6,570)

(1)

—

1,738

—

363

—

398

—
216
—
—
—
67,400

1,875
276
—

—
—
—
—
—
7

—
—
—

—
—
—
—
—
—

—
—
—

— —
— —
— —
— —
— —
— —

— —
— —
— —

4,613
—
4,308
—
32,603
—
—
—
—
—
— 455,497

—
—
—

1,761
4,452
31,734

—

—
—
—

2,599

—

1,039

—
—
—

—

398

—
—
—
—
(9,187 )
(69,119 )

4,613

4,308

32,603

2,599

(9,187 )

387,424

—
—
—

1,761

4,452

31,734

—

— —

—

(157)

103

1,688

1,634

—
—

—
—
7

— —
— —

—
—
— $ — — $ — $493,287 $

—
—

See accompanying notes.

(870)
—
272

(870)

—
(26,199 )

(26,199 )
$ (93,630 ) $ 399,936

Balance at December 31, 2018

69,551 $

MAXLINEAR, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

Years Ended December 31,

2018

2017

2016

(26,199 ) $

(9,187 ) $

61,292

Operating Activities

Net income (loss)

Adjustments to reconcile net income (loss) to cash provided by operating activities:

Amortization and depreciation

Impairment losses

Provision for losses on accounts receivable

Amortization (accretion) of investment premiums (discount), net

Amortization of inventory step-up

Amortization of debt issuance costs and discount

Stock-based compensation

Deferred income taxes

Loss on disposal of property and equipment

(Gain) loss on sale of available-for-sale securities

Change in fair value of contingent consideration

Impairment of lease and leasehold improvements

(Gain) loss on foreign currency

Excess tax benefits on stock-based awards

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable

Inventory

Prepaid expenses and other assets

Accounts payable, accrued expenses and other current liabilities

Accrued compensation

Deferred revenue and deferred profit

Accrued price protection liability

Other long-term liabilities

Net cash provided by operating activities

Investing Activities

Purchases of property and equipment

Proceeds from sale of property and equipment

Purchases of intangible assets

Cash used in acquisitions, net of cash acquired

Purchases of available-for-sale securities

Maturities of available-for-sale securities

Net cash used in investing activities

Financing Activities

Net proceeds from the issuance of debt

Repayment of debt

Repurchases of common stock

Net proceeds from issuance of common stock

Minimum tax withholding paid on behalf of employees for restricted stock units

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash and cash equivalents

Increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

Cash, cash equivalents and restricted cash at end of period

Supplemental disclosures of cash flow information:

Cash paid for interest

Cash paid for income taxes

Supplemental disclosures of non-cash investing and financing activities:

Issuance of accrued share-based bonus plan
Lease incentive for leasehold improvements

Issuance of restricted stock units to Physpeed continuing employees

See accompanying notes.

79,027
2,198
—
—
—
1,148
31,721
(12,144 )
430
—
—
735
(809)
(2,028 )

6,595
11,696
5,833
1,161
8,961
(138)
(5,117 )
(381)
102,689

(7,825 )
—
—
—
—
—
(7,825 )

—
(93,000 )
—
6,839
(7,623 )
(93,784 )
(1,301 )
(221)
74,412
74,191 $

13,957 $
5,426 $

6,997 $
— $
— $

66,738
2,000
133
(60)
25,557
763
32,668
(31,767 )
168
38
—
—
2,153
(8,559 )

(4,377 )
(1,788 )
1,272
(1,918 )
1,567
(1,629 )
6,395
(5,103 )
75,064

(7,468 )
30
(5,378 )
(473,304 )
(30,577 )
84,546
(432,151 )

416,846
(70,000 )
(334)
12,052
(11,543 )
347,021
1,582
(8,484 )
82,896
74,412 $

8,843 $
9,435 $

3,314 $
— $
818 $

26,703

1,300

169

5,641

—

21,765

101

366

(50)

220

388

(216)

(8,291 )

(8,175 )

9,846

402

3,249

5,609

1,925

(4,850 )

(164)

117,317

(8,512 )

—

(390)

(101,000 )

(90,307 )

98,896

(101,313 )

—

(3)

6,649

(7,316 )

(670)

(394)

14,940

67,956
82,896

—

1,583

7,649

1,061

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

1. Organization and Summary of Significant Accounting Policies

Description of Business

MaxLinear, Inc. was incorporated in Delaware in September 2003. MaxLinear, Inc., together with its wholly owned subsidiaries,

collectively referred to as MaxLinear, or the Company, is a provider of radio-frequency, or RF, high-performance analog, and mixed-signal
communications system-on-chip solutions for the connected home, wired and wireless infrastructure, and industrial and multi-market
applications. MaxLinear's customers include electronics distributors, module makers, original equipment manufacturers, or OEMs, and
original design manufacturers, or ODMs, who incorporate the Company’s products in a wide range of electronic devices, including cable
DOCSIS broadband modems and gateways, wireline connectivity devices for in-home networking applications, RF transceivers and
modems for wireless carrier access and backhaul infrastructure, fiber-optic modules for data center, metro, and long-haul transport
networks, video set-top boxes and gateways, hybrid analog and digital televisions, direct broadcast satellite outdoor and indoor units, and
power management and interface products used in these and a range of other markets. The Company is a fabless integrated circuit design
company whose products integrate all or a substantial portion of a broadband communication system.

Basis of Presentation and Principles of Consolidation

The consolidated financial statements include the accounts of MaxLinear, Inc. and its wholly owned subsidiaries and have been

prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. All intercompany
transactions and investments have been eliminated in consolidation.

The functional currency of certain foreign subsidiaries is the local currency. Accordingly, assets and liabilities of these foreign

subsidiaries are translated at the current exchange rate at the balance sheet date and historical rates for equity. Revenue and expense
components are translated at weighted average exchange rates in effect during the period. Gains and losses resulting from foreign currency
translation are included as a component of stockholders’ equity. Foreign currency transaction gains and losses are included in the results of
operations, and to date, have not been material.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes of the consolidated financial
statements. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash

equivalents are recorded at cost, which approximates market value.

Accounts Receivable

The Company performs ongoing credit evaluations of its customers and assesses each customer's credit worthiness. The Company

monitors collections and payments from its customers and maintains an allowance for doubtful accounts based upon its historical
experience, its anticipation of uncollectible accounts receivable and any specific customer collection issues that the Company has
identified. As of December 31, 2018 and 2017, the Company had an allowance for doubtful accounts of $0.05 million and $0.1 million,
respectively.

Inventory

The Company assesses the recoverability of its inventory based on assumptions about demand and market conditions. Forecasted
demand is determined based on historical sales and expected future sales. Inventory is stated at the lower of cost or net realizable value.
Cost approximates actual cost on a first-in, first-out basis and net realizable value is the estimated selling price in the ordinary course of
business, less reasonably predictable costs of completion, disposal and transportation. The Company reduces its inventory to its lower of
cost or net realizable value on a part-by-part basis to account for its obsolescence or lack of marketability. Reductions are calculated as the
difference between the cost of inventory and its net realizable value based upon assumptions about future demand, market conditions and
costs. Once established, these adjustments are considered permanent and are not revised until the related inventory is sold or disposed of.

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

Fair Value of Financial Instruments

The carrying amount of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses and

compensation are considered to be representative of their respective fair value because of the short-term nature of these accounts. The
interest rate swap is carried at fair value.

Property and Equipment

Property and equipment is carried at cost and depreciated over the estimated useful lives of the assets, ranging from two to five years,
using the straight-line method. Leasehold improvements are stated at cost and amortized over the shorter of the estimated useful lives of the
assets or the lease term.

Production Masks

Production masks with alternative future uses or discernible future benefits are capitalized and amortized over their estimated useful

life of two to five years. To determine if the production mask has alternative future uses or benefits, the Company evaluates risks
associated with developing new technologies and capabilities, and the related risks associated with entering new markets. Production masks
that do not meet the criteria for capitalization are expensed as research and development costs.

Goodwill and Intangible Assets

Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations
accounted for under the acquisition method. Intangible assets represent purchased intangible assets including developed technology, in-
process research and development, or IPR&D, technologies acquired or licensed from other companies, customer relationships, non-
compete covenants, backlog, and trademarks and tradenames. Purchased finite-lived intangible assets are capitalized and amortized over
their estimated useful lives. Technologies acquired or licensed from other companies, customer relationships, non-compete covenants,
backlog, and trademarks and tradenames are capitalized and amortized over the lesser of the terms of the agreement, or estimated useful
life. The Company capitalizes IPR&D projects acquired as part of a business combination. On completion of each project, IPR&D assets
are reclassified to developed technology and amortized over their estimated useful lives.

Impairment of Goodwill and Long-Lived Assets

Goodwill is not amortized but is tested for impairment using either a qualitative assessment, and/or the two-step method as needed.

Step one is the identification of potential impairment. This involves comparing the fair value of each reporting unit, which the Company
has determined to be the entity itself, with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds the carrying
amount, the goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the
carrying amount of a reporting unit exceeds its fair value, the second step of the impairment test is performed to measure the amount of
impairment loss, if any. The Company tests by reporting unit, goodwill and other indefinite-lived intangible assets for impairment as of
October 31 each year or more frequently if it believes indicators of impairment exist.

During development, IPR&D is not subject to amortization and is tested for impairment annually or more frequently if events or

changes in circumstances indicate that the asset might be impaired. The Company reviews indefinite-lived intangible assets for impairment
using a qualitative assessment, followed by a quantitative assessment, as needed, each year as of October 31, the date of its annual goodwill
impairment review, or whenever events or changes in circumstances indicate the carrying value may not be recoverable. Recoverability of
indefinite-lived intangible assets is measured by comparing the carrying amount of the asset to its fair value. In certain cases, the Company
utilizes the relief-from-royalty method when appropriate, and a fair value will be obtained based on analysis over the costs saved by owning
the right instead of leasing it.

Once an IPR&D project is complete, it becomes a finite-lived intangible asset and is evaluated for impairment both immediately prior

to its change in classification and thereafter in accordance with the Company's policy for long-lived assets.

The Company regularly reviews the carrying amount of its long-lived assets subject to depreciation and amortization, as well as the

useful lives, to determine whether indicators of impairment may exist which warrant adjustments to carrying values or estimated useful
lives. An impairment loss would be recognized when the sum of the expected future undiscounted net cash flows is less than the carrying
amount of the asset. Should impairment exist, the impairment loss would be measured based on the excess of the carrying amount of the
asset over the asset’s fair value.

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

During the years 2018, 2017, and 2016, the Company identified impairment of intangible assets of $2.2 million, $2.0 million and

$1.3 million, respectively. Refer to Goodwill and Intangible Assets, Note 5 for more information.

Revenue Recognition

On January 1, 2018, the Company adopted Financial Accounting Standards Board, or FASB, Accounting Standards Codification

Topic 606, Revenue from Contracts with Customers, or ASC 606, using the modified retrospective method and accordingly, modified its
policy on revenue recognition as stated below. The primary impact of adopting ASC 606 for the Company was to accelerate the timing of
the Company’s revenue and related cost recognition on products sold via some of its distributors, which changed from recognition upon the
sale to the distributors' end customers, or the sell-through method, to recognition upon the Company's sale to the distributor, or the sell-in
method. The Company is now also required to estimate the effects of pricing credits to its distributors from contractual price protection and
unit rebate provisions, as well as stock rotation rights and record such estimated credits upon the Company's sale to the distributor. As a
result of the adoption of ASC 606 as of January 1, 2018 using the modified retrospective method, prior period amounts have not been
adjusted to reflect the change in revenue recognition for such distributor sales.

Substantially all of the Company's revenue is generated from sales of the Company’s integrated circuits to electronics distributors,
module makers, OEMs, and ODMs under individual customer purchase orders, some of which have underlying master sales agreements
that specify terms governing the product sales. Effective January 1, 2018, the Company adopted ASC 606 and recognizes revenue at the
point in time when control of the products is transferred to the customer at the estimated net consideration for which collection is probable,
taking into account the customer's rights to price protection, other pricing credits, unit rebates, and rights to return unsold product. Transfer
of control occurs either when products are shipped to or received by the distributor or direct customer, based on the terms of the specific
agreement with the customer, if the Company has a present right to payment and transfer of legal title and the risks and rewards of
ownership to the customer has occurred. For most of the Company's product sales, transfer of control occurs upon shipment to the
distributor or direct customer. In assessing whether collection of consideration from a customer is probable, the Company considers the
customer's ability and intention to pay that amount of consideration when it is due. Payment of invoices is due as specified in the
underlying customer agreement, typically 30 days from the invoice date, which occurs on the date of transfer of control of the products to
the customer. Since payment terms are less than a year, the Company has elected the practical expedient and does not assess whether a
customer contract has a significant financing component.

A five-step approach is applied in the recognition of revenue under ASC 606: (1) identify the contract with a customer, (2) identify

the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance
obligations in the contract, and (5) recognize revenue when the Company satisfies a performance obligation. The Company applied ASC
606 to its customer contracts that were not completed before the January 1, 2018 adoption date. Customer purchase orders plus the
underlying master sales agreements are considered to be contracts with the customer for purposes of applying the five-step approach under
ASC 606.

Pricing adjustments and estimates of returns under contractual stock rotation rights are treated as variable consideration for purposes

of determining the transaction price, and are estimated at the time control transfers using the expected value method based on the
Company's analysis of actual price adjustment claims by distributors and historical product return rates, and then reassessed at the end of
each reporting period. The Company also considers whether any variable consideration is constrained, since such amounts for which it is
probable that a significant reversal will occur when the contingency is subsequently resolved are required to be excluded from revenues.
Price adjustments are finalized at the time the products are sold through to the end customer and the distributor or end customer submits a
claim to reduce the sale price to a pre-approved net price. Stock rotation allowances are capped at a fixed percentage of the Company's
sales to a distributor for a period of time, up to six months, as specified in the individual distributor contract. If the Company's current
estimates of such credits and rights are materially inaccurate, it may result in adjustments that affect future revenues and gross profits.
Returns under the Company's general assurance warranty of products for a period of one to three years have not been material and
warranty-related services are not considered a separate performance obligation under the customer contracts. Most of the Company's
customers resell our product as part of their product and thus are tax-exempt; however, to the extent the Company collects and remits taxes
on product sales from customers, it has elected to exclude from the measurement of transaction price such taxes.

Each distinct promise to transfer products is considered to be an identified performance obligation for which revenue is recognized

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

performance obligations, which represent products to be shipped within 12 months under open customer purchase orders, at the end of the
current reporting period as allowed under ASC 606. The Company has also elected to record sales commissions when incurred, pursuant to
the practical expedient under ASC 340, as the period over which the sales commission asset that would have been recognized is less than
one year.

Customer contract liabilities consist of obligations to deliver rebates to customers in the form of units of products which are included

in accrued expenses and other current liabilities in the consolidated balance sheets. Other obligations to customers consist of estimates of
price protection rights offered to the Company's end customers, which are included in accrued price protection liability in the consolidated
balance sheets, as well as price adjustments expected to be claimed by the distributor upon sell-through of the products to their customers,
and amounts expected to be returned by distributors under stock rotation rights, which are included in accrued expenses and other current
liabilities in the consolidated balance sheets. The Company also records a right of return asset, consisting of amounts representing the
products the Company expects to receive from customers in returns, which is included in inventory in the consolidated balance sheets, and
is typically settled within six months of transfer of control to the customer, or the period over which stock rotation rights are based. Upon
lapse of the time period for stock rotations, or the contractual end to price protection and rebate programs, which is approximately one to
two years, and when the Company believes unclaimed amounts are no longer subject to payment and will not be paid, any remaining asset
or liability is derecognized by an offsetting entry to cost of net revenue and net revenue. For additional disclosures regarding contract
liabilities and other obligations to customers, see Note 14.

The Company assesses customer accounts receivable and contract assets for impairment in accordance with ASC 310-10-35.

The following tables present the amounts by which each financial statement line item was affected as a result of applying ASC 606:

Year Ended December 31, 2018

Amounts under
Legacy GAAP

Impact of Adoption
(in thousands, except per share amounts)

As reported

Consolidated statement of operations:

Net revenue
Cost of net revenue
Gross profit
Loss from operations
Loss before income taxes
Income tax benefit
Net loss
Basic and diluted loss per share

370,033 $
170,719
199,314
(28,557)
(42,312)
(8,640)
(33,672)
(0.49)

14,964 $
5,504
9,460
9,460
9,460
1,987
7,473
0.11

384,997
176,223
208,774
(19,097)
(32,852)
(6,653)
(26,199)
(0.38)

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

December 31, 2018

Amounts under
Legacy GAAP

Impact of Adoption
(in thousands)

As reported

59,491 $
41,470
180,343
738,563
19,499
12,860
79,406
347,734
(102,737)
390,829
738,563

— $

268
268
268
(19,499)
10,660
(8,839)
(8,839)
9,107
9,107
268

59,491
41,738
180,611
738,831
—
23,520
70,567
338,895
(93,630)
399,936
738,831

Revenues from sales through the Company’s distributors accounted for 42%, 34% and 19% of net revenue for the years ended

December 31, 2018, 2017 and 2016, respectively.

Warranty

The Company generally provides a warranty on its products for a period of one to three years. The Company makes estimates of

product return rates and expected costs to replace the products under warranty at the time revenue is recognized based on historical
warranty experience and any known product warranty issues. If actual return rates and/or replacement costs differ significantly from these
estimates, adjustments to recognize additional cost of net revenue may be required in future periods. As of December 31, 2018 and 2017,
the Company has warranty reserves of $0.5 million and $0.9 million, respectively, based on the Company’s estimates.

Segment Information

The Company operates in one segment as it has developed, marketed and sold primarily only one class of similar products, radio-

frequency, high-performance analog and mixed-signal communications system-on-chip solutions for the connected home, wired and
wireless infrastructure markets and industrial and multi-market applications.

Operating segments are defined as components of an enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing
performance. The Company’s chief operating decision maker is its Chief Executive Officer. The Company’s Chief Executive Officer
reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance.
The Company has one business activity and there are no segment managers who are held accountable for operations, operating results and
plans for products or components below the consolidated unit level. Accordingly, the Company reports as a single operating segment.

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

Stock-based Compensation

The Company measures the cost of employee services received in exchange for equity incentive awards, including restricted stock

units and restricted stock awards, employee stock purchase rights and stock options based on the grant date fair value of the award. The
Company calculates the fair value of restricted stock units and restricted stock awards based on the fair market value of its common stock
on the grant date. The Company uses the Black-Scholes valuation model to calculate the fair value of stock options and employee stock
purchase rights granted to employees. Stock-based compensation expense is recognized over the period during which the employee is
required to provide services in exchange for the award, which is usually the vesting period. The Company recognizes compensation
expense over the vesting period using the straight-line method and classifies these amounts in the consolidated statements of operations
based on the department to which the related employee reports.

Research and Development

Costs incurred in connection with the development of the Company’s technology and future products are charged to research and

development expense as incurred.

Derivatives and Hedging Activities

The Company records derivatives in the consolidated balance sheets at fair value. Hedge accounting is applied to derivatives
designated in a hedging relationship. A derivative designated as a hedge of a forecasted transaction is carried at fair value with the effective
portion of a derivative’s gain or loss recorded in other comprehensive income (i.e., a separate component of stockholders’ equity) and
subsequently recognized in earnings in the same period or periods the hedged forecasted transaction affects earnings. The ineffective
portion of a derivative’s gain or loss is recorded in earnings as it occurs. Changes in certain terms of the hedged transactions, including the
selection of interest rate from one-month LIBOR to another rate could cause ineffectiveness in the derivatives and result in reclassification
of amounts in accumulated other comprehensive income (loss) into earnings.

Income Taxes

The Company provides for income taxes utilizing the asset and liability approach of accounting for income taxes. Under this
approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are
recovered or paid. Deferred taxes are presented net as noncurrent. The provision for income taxes generally represents income taxes paid
or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from the differences between the
financial and tax bases of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are
enacted. Valuation allowances are recorded to reduce deferred tax assets when a judgment is made that is considered more likely than not
that a tax benefit will not be realized. A decision to record a valuation allowance results in an increase in income tax expense or a decrease
in income tax benefit. If the valuation allowance is released in a future period, income tax expense will be reduced accordingly.

The calculation of tax liabilities involves dealing with uncertainties in the application of complex global tax regulations. The impact

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all
of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable
income during the periods in which those temporary differences become deductible. The Company continually assesses the need for a
valuation allowance on the deferred tax asset by evaluating both positive and negative evidence that may exist. Any adjustment to the net
deferred tax asset valuation allowance would be recorded in the income statement for the period that the adjustment is determined to be
required.

On December 22, 2017, the Tax Cuts and Jobs Act, or the Tax Act, was enacted into U.S. tax law. Also on December 22, 2017, the
SEC issued guidance in Staff Accounting Bulletin No. 118, or SAB 118, to address certain fact patterns where the accounting for changes
in tax laws or tax rates under ASC Topic 740 is incomplete upon issuance of an entity's financial statements for the reporting period in
which the Tax Act is enacted. As permitted in SAB 118, in 2017, the Company took a measurement period approach and reported certain
provisional amounts, based on reasonable estimates, for certain tax effects in which the accounting under ASC 740 was incomplete. Such
provisional amounts were subject to adjustment during a limited

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

measurement period, not to extend one year beyond the tax law enactment date. The Company has completed the accounting required
under ASC 740 in a timely manner.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity (net assets) of a business entity during a period from transactions and

other events and circumstances from non-owner sources. Other comprehensive income (loss) includes certain changes in equity that are
excluded from net income (loss), net of tax, such as foreign currency translation gains and losses, and unrealized gains and losses from
interest rate hedging activities.

The following table summarizes the balances in accumulated other comprehensive income (loss) by component:

Balance at December 31, 2018
Balance at December 31, 2017

Litigation and Settlement Costs

Cumulative Translation
Adjustments

Interest Rate Hedge

Total

$
$

(in thousands)

(907) $
562 $

1,179 $
477 $

272
1,039

Legal costs are expensed as incurred. The Company is involved in disputes, litigation and other legal actions in the ordinary course
of business. The Company continually evaluates uncertainties associated with litigation and records a charge equal to at least the minimum
estimated liability for a loss contingency when both of the following conditions are met: (i) information available prior to issuance of the
financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial
statements and (ii) the loss or range of loss can be reasonably estimated.

Recently Adopted Accounting Pronouncements

In May 2014, the FASB, issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which provides for new

accounting guidance related to revenue recognition. This new standard replaced all prior U.S. GAAP guidance on this topic and eliminated
all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is
recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to
customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services.
This guidance became effective for the Company on January 1, 2018 and can be applied either retrospectively to each period presented or
as a cumulative-effect adjustment as of the date of adoption. The Company applied the guidance prospectively with an adjustment to
accumulated deficit for the cumulative effect of adoption. Adoption of the amendments in this guidance accelerated the timing of the
Company’s revenue and related cost recognition on products sold via some distributors, which changed from the sell-through method to the
sell-in method under this guidance. The Company is also required to estimate the effects of pricing credits to its distributors from
contractual price protection and unit rebate provisions, as well as stock rotation rights. The Company has completed its assessment of the
impact of adopting this new accounting standard on the Company's consolidated financial position and results of operations for the year
ended December 31, 2018; such impact is disclosed above, under the caption "Significant Accounting Policies—Revenue Recognition."
The impact to accumulated deficit as of January 1, 2018 was not material. As a result of applying the guidance prospectively with an
adjustment to accumulated deficit in the Company's consolidated financial statements for the cumulative effect of adoption, revenues that
would have been recognized on a sell-through basis for the amount of deferred revenue and profit remaining as of the adoption date will
not be recognized in earnings for any period.

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities.

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

In March 2016, the FASB issued ASU No. 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net )

to clarify the revenue recognition implementation guidance on principal versus agent considerations. The amendments in this update clarify
that when another party is involved in providing goods or services to a customer, an entity that is the principal has obtained control of a
good or service before it is transferred to a customer, and provides indicators to assist an entity in determining whether it controls a
specified good or service prior to the transfer to the customer. An entity that is the principal recognizes revenue in the gross amount of
consideration to which it expects to be entitled in exchange for the specified good or service transferred to the customer, whereas an agent
recognizes revenue in the amount of any fee or commission to which it expects to be entitled in exchange for arranging for the specified
good or service to be provided by the other party. The amendments in this update were effective for the Company beginning in the first
quarter of fiscal year 2018, concurrent with and applied on the same basis as the new revenue recognition standard. The adoption of the
amendments in this update did not have a material impact on the Company's consolidated financial position and results of operations for the
year ended December 31, 2018.

In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments to eliminate the

diversity in practice regarding the presentation and classification of certain cash receipts and cash payments, including, among other things,
contingent consideration payments made following a business combination, proceeds from the settlement of insurance claims in the
statement of cash flows, and debt prepayment or debt extinguishment costs. Cash payments not made soon after the acquisition date up to
the amount of the contingent consideration liability recognized at the acquisition date should be classified as financing activities and any
excess payments should be classified as operating activities, whereas cash payments made soon after the acquisition date to settle the
contingent consideration should be classified as investing activities and cash payments for debt prepayment or debt extinguishment costs
should be classified as financing activities. Cash proceeds received from settlement of insurance claims should be classified on the basis of
the nature of the related losses. The amendments in this update should be applied using a retrospective transition method to each period
presented, unless impracticable, and if impracticable, would be applied prospectively as of the earliest date practicable. The amendments in
this update were effective for the Company beginning in the first quarter of fiscal year 2018. The adoption of the amendments in this
update did not have a material impact on the Company's consolidated statements of cash flows for the year ended December 31, 2018.

In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification
Accounting to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic
718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in this
update require the Company to account for the effects of a modification in a stock-based award unless the fair value, vesting conditions and
classification of the modified award is the same as those of the original award immediately before the original award is modified. If the
modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to
estimate the value immediately before and after the modification. The amendments in this update were effective for the Company for fiscal
years beginning with fiscal year 2018, including interim periods within those years, with early adoption permitted in any interim period.
The amendments in this update are applied prospectively to an award modified on or after the adoption date. Since the Company has not
had any modifications to stock-based awards that do not affect the inputs into the Black Scholes fair value calculation, the adoption of this
guidance did not have a material impact on the Company's consolidated financial position and results of operations for the year ended
December 31, 2018.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs
Act, or the Tax Act. The Tax Act makes broad and complex changes to the U.S. tax code. On December 22, 2017, the U.S. Securities and
Exchange Commission Staff, or SEC Staff, issued guidance in Staff Accounting Bulletin No. 118, or SAB 118, to address certain fact
patterns where the accounting for changes in tax laws or tax rates under ASC Topic 740 is incomplete upon issuance of an entity's financial
statements for the reporting period in which the Tax Act is enacted. As permitted in SAB 118, in 2017, the Company took a measurement
period approach and reported certain provisional amounts, based on reasonable estimates, for certain tax effects in which the accounting
under ASC 740 is incomplete. Such provisional amounts are subject to adjustment during a limited measurement period, not to extend one
year beyond the tax law enactment date, until the accounting under ASC 740 is complete. The Company completed the accounting required
under ASC 740 in 2018; however as new guidance and interpretations of the tax law become available, any further adjustments related to
the enacted tax laws could result in a material adverse impact on the Company's net income and our financial position in 2019.

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other

Comprehensive Income. The amendments in this update allow a reclassification from accumulated other comprehensive income to retained
earnings for stranded tax effects resulting from the Tax Act. The amendments in this update are effective for the Company beginning in
fiscal 2019, including interim periods. Early adoption is permitted. The amendments should be applied either in the period of adoption or
retrospectively to each period or periods in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act is
recognized. The Company elected to early adopt this guidance in the year ended December 31, 2018. The adoption of this guidance did not
have a material impact on the Company's consolidated financial position and results of operations for the year ended December 31, 2018.

In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC
Staff Accounting Bulletin No. 118. The amendments in this update amend the SEC paragraphs included in Topic 740 to be consistent with
the guidance in SAB 118, which the Company adopted in the year ended December 31, 2017, as described above.

In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee

Share-Based Payment Accounting, to expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and
services from nonemployees. As a result, the accounting for share-based payment awards to nonemployees and employees will be
substantially aligned by eliminating the need to measure nonemployee share-based awards at fair value on the earlier of performance
commitment date or date performance is complete. Both employee and nonemployee share-based awards are now measured at grant-date
fair value. The amendments in this update are effective for the Company beginning with fiscal year 2019, including interim periods, with
early adoption permitted, but no earlier than the Company's adoption of Topic 606. The Company elected to early adopt the amendments in
this update as of July 1, 2018, with the cumulative effect of the change recorded against accumulated deficit as of July 1, 2018. As the
Company's nonemployee share-based awards are not significant, such adoption did not have a material impact on the Company's
consolidated accumulated deficit as of July 1, 2018.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The amendments in this update require a lessee to
recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing
its right to use the underlying asset for the lease term for all leases with terms greater than twelve months. For leases less than twelve
months, an entity is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease
liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease
term. The Company intends to make this election, along with other available practical expedients. Also, in July 2018, the FASB issued
ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, to provide an additional transition method. An entity can now elect not to
present comparative financial information under Topic 842 if it recognizes a cumulative-effect adjustment to retained earnings upon
adoption. The Company also intends to make this election. The amendments in these update are effective for the Company for fiscal years
beginning with 2019, including interim periods within those years, with early adoption permitted. The Company has performed an
assessment of the impact of the adoption of the amendments in these updates on the Company's consolidated financial position and results
of operations for the Company's leases, which primarily consist of facility leases. Based on that assessment, the Company has estimated
that the adoption of Topic 842 will result in the recognition of approximately $24 million of right-of-use assets and lease liabilities as of
January 1, 2019 based on the present value of future minimum lease payments. Also, the impacts from the adoption of Topic 842 to the
Company's accumulated deficit as of January 1, 2019 and to consolidated results of operations for the year ending December 31, 2019 are
not expected to be material.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for
Goodwill Impairment, to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. An
entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a
reporting unit to all of its assets and liabilities as if the reporting unit had been acquired in a business combination. Instead, under the
amendments in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a
reporting unit with its carrying amount. The Board also eliminated the requirements for any reporting unit with a zero or negative carrying
amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. The
amendments in this update are effective for the Company beginning with fiscal year 2020, including interim periods, with early adoption
permitted for interim or annual

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of the amendments in this update is not expected
to have a material impact on the Company's consolidated financial position and results of operations.

In July 2018, the FASB issued ASU No. 2018-09, Codification Improvements, to clarify the Codification and prevent unintended

application of the guidance. An amendment to ASC 718-740, Compensation—Stock Compensation—Income Taxes, clarifies that excess tax
benefits should be recognized in the period in which the amount of the deduction is determined. The transition and effective date guidance
is based on the facts and circumstances of each amendment. The amendment identified above will be effective for the Company beginning
with fiscal year 2019. The adoption of the amendments in this update is not expected to have a material impact on the Company's
consolidated financial position and results of operations.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815), which is intended to improve accounting for

In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases, to clarify on how to apply
certain aspects of the new lease accounting standard. The amendments in this update, among other things, better articulates the requirement
for a lessee's reassessment of lease classification as of the effective date of a modification, clarifies that a change to an index or rate for
variable lease payments does not constitute a resolution of a contingency that would result in the remeasurement of lease payments, and
requires entities that apply Topic 842 retrospectively to each reporting period and do not adopt the practical expedients to write off any
prior unamortized initial direct costs that do not meet the definition under Topic 842 to equity. The amendments in this update have the
same effective date and transition requirements as the new lease standard summarized above. The Company has disclosed the impact of
adoption of Topic 842 on the Company’s consolidated financial position and results of operations as stated above.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework— Changes to
the Disclosure Requirements for Fair Value Measurement, to improve the fair value measurement reporting of financial instruments. The
amendments in this update require, among other things, added disclosure of the range and weighted average of significant unobservable
inputs used to develop Level 3 fair value measurements. The amendments in this update eliminate, among other things, disclosure of the
reasons for and amounts of transfers between Level 1 and Level 2 for assets and liabilities that are measured at fair value on a recurring
basis and an entity's valuation processes for Level 3 fair value measurements. The amendments in this update will be effective for the
Company beginning with fiscal year 2020, with early adoption permitted. Retrospective application is required for all amendments in this
update except the added disclosures, which should be applied prospectively. The adoption of the amendments in this update is not expected
to have a material impact on the Company's consolidated financial position and results of operations.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles- Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, to provide
additional guidance on the accounting for costs of implementing cloud computing arrangements that are service contracts. The
amendments in this update require the capitalization of implementation costs during the application development stage of such hosting
arrangements and amortization of the expense over the term of the arrangement including any option to extend reasonably certain to be
exercised or option to terminate reasonably certain not to be exercised. Capitalized implementation costs and amortization thereof are also
required to be classified in the same line item in the statements of financial position, operations and cash flows associated with the hosting
service fees. The amendments in this update will be effective for the Company beginning with fiscal year 2020, with early adoption
permitted. Entities may select retrospective or prospective application to all implementation costs incurred after the adoption date. The
adoption of the amendments in this update is not expected to have a material impact on the Company's consolidated financial position and
results of operations.

2. Net Income (Loss) Per Share

Basic earnings per share, or EPS, is calculated by dividing net income (loss) by the weighted-average number of common shares
outstanding for the period, without consideration for common stock equivalents. Diluted EPS is computed by dividing net income by the
weighted-average number of common shares outstanding for the period and the weighted-average

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

number of dilutive common stock equivalents outstanding for the period determined using the treasury-stock method. For purposes of this
calculation, common stock options, restricted stock units and restricted stock awards are considered to be common stock equivalents and
are only included in the calculation of diluted EPS when their effect is dilutive. In periods in which the Company has a net loss, dilutive
common stock equivalents are excluded from the calculation of diluted EPS.

The table below presents the computation of basic and diluted earnings per share:

Numerator:
Net income (loss)
Denominator:
Weighted average common shares outstanding—basic
Dilutive common stock equivalents
Weighted average common shares outstanding—diluted

Net income (loss) per share:
Basic
Diluted

Years Ended December 31,

2018

2017

2016

(in thousands, except per share amounts)

$
$

(26,199) $

(9,187) $

61,292

68,490
—
68,490

(0.38) $
(0.38) $

66,252
—
66,252

(0.14) $
(0.14) $

63,781
3,872
67,653

0.96
0.91

For the years ended December 31, 2018 and 2017, the Company incurred net losses and accordingly excluded common stock
equivalents, which represented all potentially dilutive securities, of 3.7 million and 4.5 million, respectively, from the calculation of diluted
net loss per share due to their anti-dilutive nature. The Company excluded 0.8 million common stock equivalents resulting from
outstanding equity awards for the year ended December 31, 2016 from the calculation of diluted net income per share due to their anti-
dilutive nature.

3. Business Combinations

Acquisition of Exar Corporation

On May 12, 2017, pursuant to the March 28, 2017 Agreement and Plan of Merger, Eagle Acquisition Corporation, a Delaware
corporation and wholly-owned subsidiary of MaxLinear, merged with and into Exar Corporation, or Exar, with Exar surviving as a wholly
owned subsidiary of MaxLinear. Under this Agreement and Plan of Merger, the Company agreed to acquire all of Exar's outstanding
common stock for $13.00 per share in cash. MaxLinear also assumed certain of Exar's stock-based awards in the merger. MaxLinear paid
aggregate cash consideration of $688.1 million including $12.7 million of cash paid to settle certain stock-based awards that were not
assumed by MaxLinear in the merger. The Company funded the transaction with cash from the balance sheet of the combined companies,
including $235.8 million of cash from Exar, and the net proceeds of approximately $416.8 million from $425.0 million of new transaction
debt (Note 8). The Company also assumed a purchase agreement that includes an indemnification obligation from Exar related to a
November 9, 2016 business unit divestiture by Exar (Note 12).

During the year ended December 31, 2018, the Company made updates to estimates of certain tax-related assets acquired and

liabilities assumed with a corresponding net increase to goodwill of $0.3 million related to this acquisition (Note 5). The Company has
completed its purchase price allocation accounting associated with this acquisition.

Acquisition of Certain Assets and Assumption of Certain Liabilities of the G.hn business of Marvell Semiconductor, Inc.

On April 4, 2017, the Company consummated the transactions contemplated by a share and asset acquisition agreement with Marvell
Semiconductor, Inc., or Marvell, to purchase certain assets and assume certain liabilities of Marvell’s G.hn business, including its Spain
legal entity, for aggregate cash consideration of $21.0 million. The Company also hired certain employees of the G.hn business outside of
Spain and assumed employment obligations of the Spanish entity acquired, which is now a subsidiary of MaxLinear. The acquired assets
and assumed liabilities, together with the employees who joined MaxLinear and its subsidiaries as a result of the transaction, represent a
business as defined in ASC 805, Business Combinations. The Company has integrated the acquired assets and employees into its existing
business. The Company has completed its purchase price allocation accounting associated with this acquisition.

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

Acquisition of Certain Assets and Assumption of Certain Liabilities of the Wireless Infrastructure Backhaul Business of Broadcom
Corporation

On July 1, 2016, the Company consummated the transactions contemplated by an asset purchase agreement entered into with
Broadcom Corporation. The Company paid cash consideration of $80.0 million for the purchase of certain assets of Broadcom's wireless
infrastructure backhaul business, and the assumption of certain liabilities. The acquired assets and assumed liabilities, together with
employees who joined MaxLinear and its subsidiaries as a result of the transaction, represent a business as defined in ASC 805, Business
Combinations. The Company has integrated the acquired assets and employees into the Company's existing business. The Company has
completed its purchase price allocation accounting associated with this acquisition.

Acquisition of Certain Assets and Assumption of Certain Liabilities of the Wireless Infrastructure Access Business of Microsemi
Storage Solutions, Inc. (formerly known as PMC-Sierra, Inc.)

On April 28, 2016, the Company entered into an asset purchase agreement with Microsemi Storage Solutions, Inc., formerly known
as PMC-Sierra, Inc., or Microsemi, and consummated the transactions contemplated by the asset purchase agreement. The Company paid
cash consideration of $21.0 million for the purchase of certain wireless access assets of Microsemi's wireless infrastructure access
business, and assumed certain liabilities. The acquired assets and assumed liabilities, together with employees who joined MaxLinear and
its subsidiaries as a result of the transaction, represent a business as defined in ASC 805, Business Combinations. The Company has
integrated the acquired assets and employees into the Company's existing business. The Company has completed its purchase price
allocation accounting associated with this acquisition.

4. Restructuring Activity

From time to time, the Company approves and implements restructuring plans as a result of acquisitions, internal resource alignment,

and cost saving measures. Such restructuring plans include terminating employees, vacating certain leased facilities, and cancellation of
contracts.

The following table presents the activity related to the plans, which is included in restructuring charges in the consolidated

statements of operations:

Employee separation expenses
Lease related expenses
Other

Years Ended December 31,

2018

2017

2016

(in thousands)

2,094 $
1,608
136
3,838 $

8,353 $
1,025
146
9,524 $

1,038
2,264
130
3,432

Included in employee separation expenses for the year ended December 31, 2017 is stock-based compensation from the acceleration
of certain stock-based awards the Company assumed from Exar due to existing change in control provisions triggered upon termination or
diminution of authority of former Exar executives of $5.1 million.

Lease related and other charges primarily related to exiting certain redundant facilities. The lease related restructuring charges in the

2016 period also included adjustments to the estimates of net present value of the remaining lease obligation associated with certain
vacated facilities that are under assumed lease arrangements. Total sublease income related to leased facilities the Company ceased using
was approximately $2.4 million, $2.1 million and $1.3 million for the for the years ended December 31, 2018, 2017, and 2016 respectively.
The Company does not expect to incur additional material costs related to 2018 restructuring plans.

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

The following table presents a roll-forward of the Company's restructuring liability for the years ended December 31, 2018 and 2017.

The restructuring liability is included in accrued expenses and other current liabilities in the consolidated balance sheets.

Liability as of December 31, 2016
Transfers from deferred rent
Restructuring charges
Assumed in acquisition
Cash payments
Non-cash charges
Liability as of December 31, 2017
Restructuring charges
Cash payments
Non-cash charges
Liability as of December 31, 2018

5. Goodwill and Intangible Assets

Goodwill

Employee
Separation
Expenses

Lease Related
Expenses

Other

Total

— $
—
8,353
—
(2,984)
(5,130)
239
2,094
(1,924)
—
409 $

(in thousands)
499 $

4,405
1,025
—
(2,861)
(375)
2,693
1,608
(1,884)
(927)
1,490 $

37 $
—
146
70
(146)
—
107
136
(196)
—
47 $

536
4,405
9,524
70
(5,991)
(5,505)
3,039
3,838
(4,004)
(927)
1,946

Goodwill arises from the acquisition method of accounting for business combinations and represents the excess of the purchase price

over the fair value of the net assets and other identifiable intangible assets acquired. The fair values of net tangible assets and intangible
assets acquired are based upon preliminary valuations and the Company's estimates and assumptions are subject to change within the
measurement period (potentially up to one year from the acquisition date). During the year ended December 31, 2018, the Company
adjusted its allocation of purchase price for the acquisition of Exar related to updates to estimates of certain tax-related assets acquired and
liabilities assumed with a corresponding net increase in goodwill of $0.3 million.

The following table presents the changes in the carrying amount of goodwill for the periods indicated:

Beginning balance
Acquisitions
Adjustments
Ending balance

Years Ended December 31,

2018

2017

(in thousands)

237,992 $

—
338
238,330 $

76,015
162,318
(341)
237,992

The Company performs an annual goodwill impairment assessment on October 31st each year, using a two-step quantitative
assessment. Step one is the identification of potential impairment. This involves comparing the fair value of each reporting unit, which the
Company has determined to be the entity itself, with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds
the carrying amount, the goodwill of the reporting unit is considered not impaired and the second step of the impairment test is
unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the impairment test is performed to
measure the amount of impairment loss, if any.

The Company determined there were no indications of impairment associated with goodwill. As a result, no goodwill impairment
was recognized as of October 31, 2018. In addition to its annual review, the Company performs a test of impairment when indicators of
impairment are present. As of December 31, 2018, there were no indications of impairment of the Company's goodwill balances.

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

Acquired Intangibles

Finite-lived Intangible Assets

The following table sets forth the Company’s finite-lived intangible assets resulting from business acquisitions and other purchases,

which continue to be amortized:

December 31, 2018

December 31, 2017

Weighted
Average
Useful Life
(in Years)

Gross
Carrying
Amount

Accumulated
Amortization

Net Carrying
Amount

Gross
Carrying
Value

Accumulated
Amortization

Net Carrying
Amount

2,070 $

(1,130) $

(in thousands)
940 $

2,070 $

238,961
13,800
121,100
1,100
377,031 $

(74,630)
(4,252)
(55,647)
(872)
(136,531) $

164,331
9,548
65,453
228
240,500 $

241,561
13,800
121,100
1,100
379,631 $

3.7
6.9
6.1
4.6
3.0
6.1

(575) $

(39,252)
(1,992)
(26,661)
(506)
(68,986) $

1,495
202,309
11,808
94,439
594
310,645

Licensed technology
Developed technology
Trademarks and trade names
Customer relationships
Non-compete covenants

The following table sets forth amortization expense associated with finite-lived intangible assets, which is included in the

consolidated statements of operations as follows:

Cost of net revenue
Research and development
Selling, general and administrative

Years Ended December 31,

2018

2017

2016

(in thousands)

35,821 $
150
31,976
67,947 $

25,316 $
551
28,827
54,694 $

8,512
619
6,953
16,084

Amortization of finite-lived intangible assets in cost of net revenue in the consolidated statements of operations results primarily

from acquired developed technology.

The following table sets forth activity during the years ended December 31, 2018 and 2017 related to finite-lived intangible assets:

Beginning balance
Acquisitions
Other additions
Transfers to developed technology from IPR&D
Amortization
Impairment losses

Ending balance

Years Ended December 31,

2018

2017

(in thousands)

310,645 $

—
—
—
(67,947)
(2,198)
240,500 $

81,861
245,500
5,378
32,600
(54,694)
—
310,645

The Company regularly reviews the carrying amounts of its long-lived assets subject to depreciation and amortization, as well as the

related useful lives, to determine whether indicators of impairment may exist which warrant adjustments to carrying values or estimated
useful lives. An impairment loss is recognized when the sum of the expected future undiscounted net cash flows is less than the carrying
amount of the asset. Should impairment exist, the impairment loss is measured based on the

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

excess of the carrying amount of the asset over the asset’s fair value. Impairment losses related to finite-lived intangible assets for the year
ended December 31, 2018 were $2.2 million and related to acquired developed technology. During the years ended December 31, 2017 and
2016, no impairment losses related to finite-lived intangible assets were recognized.

The following table presents future amortization of the Company’s finite-lived intangible assets at December 31, 2018:

2019
2020
2021
2022
2023
Thereafter
Total

Amortization
(in thousands)

56,819
55,954
55,171
37,641
25,446
9,469
240,500

Indefinite-lived Intangible Assets

Indefinite-lived intangible assets consist entirely of acquired in-process research and development technology, or IPR&D. The

following table sets forth the Company’s activities related to the indefinite-lived intangible assets:

Beginning balance
Acquisitions
Transfers to developed technology from IPR&D
Impairment losses

Ending balance

Years Ended December 31,

2018

2017

(in thousands)
4,400 $
—
—
—
4,400 $

22,400
16,600
(32,600)
(2,000)
4,400

The Company performs its annual assessment of indefinite-lived intangible assets on October 31 each year or more frequently if
events or changes in circumstances indicate that the asset might be impaired utilizing a qualitative test as a precursor to the quantitative test
comparing the fair value of the assets with their carrying amount. Based on the qualitative test, if it is more likely than not that indicators of
impairment exists, the Company proceeds to perform a quantitative analysis. Based on the Company’s assessment as of October 31, 2018,
no indicators of impairment were identified. In the year ended December 31, 2018, no IPR&D impairment losses were recorded. In the year
ended December 31, 2017, the Company recognized impairment losses of $2.0 million related to a single IPR&D project, which was
abandoned. In the year ended December 31, 2016, the Company recognized impairment losses of $1.3 million related to the Company's
abandonment of a single IPR&D project.

6. Financial Instruments

The composition of financial instruments is as follows:

Assets
Interest rate swap

December 31, 2018

December 31, 2017

(in thousands)

1,623 $

734

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

The fair values of the Company’s financial instrument is the amount that would be received in an asset sale or paid to transfer a
liability in an orderly transaction between unaffiliated market participants and is recorded using a hierarchical disclosure framework based
upon the level of subjectivity of the inputs used in measuring assets and liabilities. The levels are described below:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities.

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available.

The Company classifies its financial instrument within Level 2 of the fair value hierarchy on the basis of models utilizing market
observable inputs. The interest rate swap has been valued on the basis of valuations provided by third-party pricing services, as derived
from standard valuation or pricing models. Market-based observable inputs for the interest rate swap include one month LIBOR-based
yield curves over the term of the swap. The Company reviews third-party pricing provider models, key inputs and assumptions and
understands the pricing processes at its third-party providers in determining the overall reasonableness of the fair value of its Level 2
financial instruments. The Company also considers the risk of nonperformance by assessing the swap counterparty's credit risk in the
estimate of fair value of the interest rate swap. As of December 31, 2018 and 2017, the Company has not made any adjustments to the
valuations obtained from its third party pricing providers.

The following table presents a summary of the Company’s financial instruments that are measured on a recurring basis:

Assets
Interest rate swap, December 31, 2018
Interest rate swap, December 31, 2017

Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)

Fair Value Measurements
Significant
Other
Observable
Inputs
(Level 2)

(in thousands)

Significant
Unobservable
Inputs
(Level 3)

Balance

$
$

1,623 $
734 $

— $
— $

1,623 $
734 $

—
—

The following table summarizes activity for the interest rate swap:

Interest rate swap asset
Beginning balance

Unrealized gain recognized in other comprehensive income (loss)

Ending balance

Fair Value at December 31,

2018

2017

(in thousands)

734 $
889
1,623 $

—
734
734

There were no transfers between Level 1, Level 2 or Level 3 fair value hierarchy categories in the years ended December 31, 2018

and 2017.

Financial Instruments Not Recorded at Fair Value on a Recurring Basis

Some of the Company’s financial instruments are not measured at fair value on a recurring basis but are recorded at amounts that

approximate fair value due to their liquid or short-term nature. Such financial assets and financial liabilities include: cash and cash
equivalents, restricted cash, net receivables, certain other assets, accounts payable, accrued price protection liability, accrued expenses,
accrued compensation costs, and other current liabilities.

The Company’s long-term debt is not recorded at fair value on a recurring basis, but is measured at fair value for disclosure purposes

(Note 8).

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

7. Balance Sheet Details

Cash, cash equivalents, and restricted cash consist of the following:

Cash and cash equivalents
Short-term restricted cash
Long-term restricted cash
Total cash, cash equivalents and restricted cash

December 31, 2018 December 31, 2017
(in thousands)

73,142 $
645
404
74,191 $

71,872
1,476
1,064
74,412

As of December 31, 2018 and 2017, the Company has restricted cash of $1.0 million and $2.5 million, respectively. The cash is

restricted in connection with guarantees for certain import duties and office leases.

Inventory consists of the following:

Work-in-process
Finished goods

Property and equipment consist of the following:

Furniture and fixtures
Machinery and equipment
Masks and production equipment
Software
Leasehold improvements
Construction in progress

Less accumulated depreciation and amortization

December 31, 2018 December 31, 2017
(in thousands)

17,618 $
24,120
41,738 $

21,823
31,611
53,434

Useful Life
(in Years)

December 31, 2018 December 31, 2017

5
3-5
2
3
1-5
N/A

(in thousands)
2,020 $
34,225
12,645
5,675
17,493
133
72,191
(53,787)
18,404 $

2,105
33,462
11,470
4,695
14,340
639
66,711
(44,053)
22,658

Depreciation expense for the years ended December 31, 2018, 2017 and 2016 was $11.1 million, $12.0 million and $10.6 million,

respectively.

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

Deferred revenue and deferred profit consist of the following:

Deferred revenue—rebates
Deferred revenue—distributor transactions
Deferred cost of net revenue—distributor transactions

__________

December 31, 2018

December 31, 2017 (1)

(in thousands)
— $
—
—
— $

156
5,341
(1,135)
4,362

(1) Due to the adoption of ASC 606 using the modified retrospective method, prior period amounts have not been adjusted to reflect the
change to recognize certain distributor sales upon sale to the distributor, or the sell-in method, from recognition upon the Company's sale to
the distributors' end customers, or the sell-through method, which required the deferral of revenue and profit on such distributor sales.

Accrued price protection liability consists of the following activity:

Beginning balance

Charged as a reduction of revenue
Reversal of unclaimed rebates
Payments
Ending balance

Accrued expenses and other current liabilities consist of the following:

Accrued technology license payments
Accrued professional fees
Accrued engineering and production costs
Accrued restructuring
Accrued royalty
Accrued leases—other
Accrued customer credits
Income tax liability
Customer contract liabilities
Accrued obligations to customers for price adjustments
Accrued obligations to customers for stock rotation rights
Other

___________

Years Ended December 31,

2018

2017

(in thousands)

21,571 $
34,288
(2,413)
(36,992)
16,454 $

15,176
46,520
(101)
(40,024)
21,571

December 31, 2018

December 31, 2017 (1)

(in thousands)
4,500 $
1,270
646
1,946
980
1,214
1,204
1,642
71
7,558
1,494
995
23,520 $

4,500
1,497
2,378
3,039
1,206
1,105
2,667
—
—
—
—
3,914
20,306

(1) Due to the adoption of ASC 606 using the modified retrospective method, prior period amounts have not been adjusted to include
customer contract liabilities and accrued obligations to customers for price adjustments and stock rotation rights, which are now required to
be estimated and disclosed at the time of sale.

100

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

8. Debt and Interest Rate Swap

Debt

The carrying amount of the Company's long-term debt consists of the following:

Principal
Less:
Unamortized debt discount
Unamortized debt issuance costs
Net carrying amount of long-term debt
Less: current portion of long-term debt
Long-term debt, non-current portion

December 31, 2018

December 31, 2017

(in thousands)

262,000 $

355,000

(1,630)
(4,613)
255,757
—

255,757 $

(1,930)
(5,461)
347,609
—
347,609

On May 12, 2017, the Company entered into a credit agreement with certain lenders and a collateral agent in connection with the

acquisition of Exar (Note 3). The credit agreement provides for an initial secured term B loan facility (the “Initial Term Loan”) in an
aggregate principal amount of $425.0 million. The credit agreement permits the Company to request incremental loans in an aggregate
principal amount not to exceed the sum of $160.0 million (subject to adjustments for any voluntary prepayments), plus an unlimited amount
that is subject to pro forma compliance with certain secured leverage ratio and total leverage ratio tests. Incremental loans are subject to
certain additional conditions, including obtaining additional commitments from the lenders then party to the credit agreement or new
lenders.

Loans under the credit agreement bear interest, at the Company’s option, at a rate equal to either (i) a base rate equal to the highest of

(x) the federal funds rate, plus 0.50%, (y) the prime rate then in effect and (z) an adjusted LIBOR rate determined on the basis of a one-
three- or six-month interest period, plus 1.0% or (ii) an adjusted LIBOR rate, subject to a floor of 0.75%, in each case, plus an applicable
margin of 2.50% in the case of LIBOR rate loans and 1.50% in the case of base rate loans. Commencing on September 30, 2017, the Initial
Term Loan will amortize in equal quarterly installments equal to 0.25% of the original principal amount of the Initial Term Loan, with the
balance payable on the maturity date. The Initial Term Loan has a term of seven years and will mature on May 12, 2024, at which time all
outstanding principal and accrued and unpaid interest on the Initial Term Loan must be repaid. The Company is also required to pay fees
customary for a credit facility of this size and type.

The Company is required to make mandatory prepayments of the outstanding principal amount of term loans under the credit
agreement with the net cash proceeds from the disposition of certain assets and the receipt of insurance proceeds upon certain casualty and
condemnation events, in each case, to the extent not reinvested within a specified time period, from excess cash flow beyond stated
threshold amounts, and from the incurrence of certain indebtedness. The Company has the right to prepay its term loans under the credit
agreement, in whole or in part, at any time without premium or penalty, subject to certain limitations and a 1.0% soft call premium
applicable during the first six months for the loan term. The Company exercised its right to prepay and made aggregate payments of
principal of $163.0 million to date through December 31, 2018.

The Company’s obligations under the credit agreement are required to be guaranteed by certain of its domestic subsidiaries meeting

materiality thresholds set forth in the credit agreement. Such obligations, including the guaranties, are secured by substantially all of the
assets of the Company and the subsidiary guarantors pursuant to a security agreement with the collateral agent.

The credit agreement contains customary affirmative and negative covenants, including covenants limiting the ability of the
Company and its restricted subsidiaries to, among other things, incur debt, grant liens, undergo certain fundamental changes, make
investments, make certain restricted payments, and sell assets, in each case, subject to limitations and exceptions. As of December 31, 2018,
the Company was in compliance with such covenants. The credit agreement also contains customary events of default that include, among
other things, certain payment defaults, cross defaults to other indebtedness, covenant defaults, change in control defaults, judgment
defaults, and bankruptcy and insolvency defaults. If an event of default exists, the lenders may require immediate payment of all obligations
under the credit agreement, and may exercise certain other rights and remedies provided for under the credit agreement, the other loan
documents and applicable law.

101

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

As of December 31, 2018 and 2017, the weighted average effective interest rate on long-term debt was approximately 4.6% and

4.1%, respectively.

The debt is carried at its principal amount, net of unamortized debt discount and issuance costs, and is not adjusted to fair value each

period. The issuance date fair value of the liability component of the debt in the amount of $398.5 million was determined using a
discounted cash flow analysis, in which the projected interest and principal payments were discounted back to the issuance date of the term
loan at a market interest rate for nonconvertible debt of 4.6%, which represents a Level 2 fair value measurement. The debt discount of
$2.1 million and debt issuance costs of $6.0 million are being amortized to interest expense using the effective interest method from the
issuance date through the contractual maturity date of the term loan of May 12, 2024.

During the year ended December 31, 2018, the Company recognized amortization of debt discount of $0.3 million and debt issuance

costs of $0.8 million to interest expense. During the year ended December 31, 2017, the Company recognized amortization of debt
discount of $0.2 million and debt issuance costs of $0.6 million to interest expense.

The approximate fair value of the term loan as of December 31, 2018 and 2017 was $268.1 million and $360.0 million, respectively,
which was estimated on the basis of inputs that are observable in the market and which is considered a Level 2 measurement method in the
fair value hierarchy.

As of December 31, 2018 and 2017, the remaining principal balance on the term loan was $262.0 million and $355.0 million,

respectively. The remaining principal balance is due on May 12, 2024 at the maturity date on the term loan.

Interest Rate Swap

In November 2017, the Company entered into a fixed-for-floating interest rate swap with an amortizing notional amount to swap a

substantial portion of variable rate LIBOR interest payments under its term loans for fixed interest payments bearing an interest rate of
1.74685%. The Company's outstanding debt is still subject to a 2.5% fixed applicable margin during the term of the loan. The interest rate
swap is designated as a cash flow hedge of a portion of floating rate interest payments on long-term debt and effectively fixes the interest
rate on a substantial portion of the Company’s long-term debt at approximately 4.25%. Accordingly, the Company applies cash flow hedge
accounting to the interest rate swap and it is recorded at fair value as an asset or liability and the effective portion of changes in the fair
value of the interest rate swap, as measured quarterly, are reported in other comprehensive income (loss). As of December 31, 2018 and
2017, the fair value of the interest rate swap asset was $1.6 million and $0.7 million, respectively, (Note 6) and is included in other long-
term assets in the consolidated balance sheets. The increase in fair value related to the interest rate swap asset included in other
comprehensive income for the years ended December 31, 2018 and 2017 was $0.9 million and $0.7 million, respectively. The interest rate
swap expires in October 2020 and the total $1.6 million of unrealized gain recorded in accumulated other comprehensive income at
December 31, 2018 is not expected to be recorded in interest expense over the next twelve months.

9. Stock-Based Compensation and Employee Benefit Plans

Common Stock

On March 29, 2017, each share of the Company’s then outstanding Class A common stock and Class B common stock automatically
converted into a single class of common stock pursuant to the terms of the Company’s Amended and Restated Certificate of Incorporation.
Also on March 29, 2017, the shares underlying outstanding stock options, restricted stock units and restricted stock awards automatically
converted to rights to receive shares of a single class of common stock. The conversion had no impact on the total number of issued and
outstanding shares of capital stock; the Class A shares and Class B shares converted into an equivalent number of shares of common stock.
The board of directors approved a reduction in the Company’s total number of authorized shares of capital stock by 65,445,853 from
1,575,000,000 to 1,509,554,147 to account for the 58,876,053 shares of Class A common stock and 6,569,800 shares of Class B common
stock retired upon conversion, such that the authorized number of shares of Class A common stock is 441,123,947 and the authorized
number of shares of Class B common stock is 493,430,200. No additional Class A shares or Class B shares will be issued following the
conversion. The authorized number of shares of common stock and preferred stock remain unchanged at 550,000,000 shares and
25,000,000 shares, respectively.

Following the conversion, each share of common stock is entitled to one vote per share and otherwise has the same designations,
rights, powers and preferences as the Class A common stock prior to the conversion. In addition, holders of the common stock vote as a
single class of stock on any matter that is submitted to a vote of stockholders. Prior to the conversion, the holders of the Company’s Class
A and Class B common stock had identical voting rights, except that holders of Class A common

102

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

stock were entitled to one vote per share and holders of Class B common stock were entitled to ten votes per share with respect to
transactions that would result in a change of control of the Company or that relate to the Company’s equity incentive plans. In addition,
holders of Class B common stock had the exclusive right to elect two members of the Company’s Board of Directors, each referred to as a
Class B Director. The shares of Class B common stock were not publicly traded. Each share of Class B common stock was convertible at
any time at the option of the holder into one share of Class A common stock and in most instances automatically converted upon sale or
other transfer.

Employee Compensation Plans

At December 31, 2018, the Company had stock-based compensation awards outstanding under the following plans: the 2004 Stock

Plan, the 2010 Equity Incentive Plan, as amended, or 2010 Plan, and the 2010 Employee Stock Purchase Plan, or ESPP, and plans under
which equity incentive awards were assumed in connection with the acquisitions of Entropic in 2015 and Exar Corporation in 2017. All
current stock awards are issued under the 2010 Plan and ESPP.

2010 Equity Incentive Plan

The 2010 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock

unit awards, stock appreciation rights, performance-based stock awards, and other forms of equity compensation, or collectively, stock
awards. The aggregate number of shares of common stock that may be issued pursuant to stock awards under the 2010 Plan will increase by
any shares subject to stock options or other awards granted under the 2004 Stock Plan that expire or otherwise terminate without having
been exercised in full and shares issued pursuant to awards granted under the 2004 Stock Plan that are forfeited to or repurchased by the
Company. In addition, the number of shares of common stock reserved for issuance will automatically increase on the first day of each
fiscal year, equal to the lesser of: 2,583,311 shares of the Company’s common stock; four percent (4%) of the outstanding shares of the
Company’s common stock on the last day of the immediately preceding fiscal year; or such lesser amount as the Company’s board of
directors may determine. Options granted will generally vest over a four year period and the term can be from seven to ten years.

In December 2018, the Company's board of directors approved an amendment to the plan to add a clawback policy, which requires
the Company's executive officers to repay to MaxLinear certain incentive compensation if (i) the Company restates its financial statements
as a result of a material error or due to material non-compliance with reporting requirements under applicable law; (ii) no more than three
(3) years have elapsed since the original filing date of the financial statements; and (iii) an independent committee of the board’s
compensation committee determines, in its sole discretion, that the misreporting event occurred due to fraud or intentional misconduct
within MaxLinear and, following consideration of such factors as the committee may deem reasonable and appropriate, including the
extent to which an executive officer knew or should have known of the factors resulting in the misreporting, that the executive officer
should repay any “recoverable compensation.” Recoverable compensation is defined in the clawback policy but generally includes any cash
or equity compensation paid to executive officers under the Company's Executive Incentive Bonus Plan or 2010 Equity Incentive Plan to
the extent the amount actually paid by MaxLinear exceeds the amount that would have been paid if the financial misreporting event had not
occurred. To date, there has been no repayment of compensation from executive officers pursuant to such clawback policy.

As of December 31, 2018, the number of shares reserved for future issuance under the 2010 Plan and awards outstanding under the

2004 Plan are 12,800,027 shares and 553,710 shares, respectively.

2010 Employee Stock Purchase Plan

The ESPP authorizes the issuance of shares of the Company’s common stock pursuant to purchase rights granted to the Company’s

employees. The number of shares of the Company’s common stock reserved for issuance will automatically increase on the first day of
each fiscal year, equal to the least of: 968,741 shares of the Company’s common stock; one and a quarter percent (1.25%) of the
outstanding shares of the Company’s common stock on the first day of the fiscal year; or such lesser amount as may be determined by the
Company's board of directors or a committee appointed by the Company's board of directors to administer the ESPP. The ESPP is
implemented through a series of offerings of purchase rights to eligible employees. Under the ESPP, the Company may specify offerings
with a duration of not more than 27 months, and may specify shorter purchase periods within each offering. Each offering will have one or
more purchase dates on which shares of the Company’s common stock will be purchased for employees participating in the offering. An
offering may be terminated under certain circumstances. Generally, all eligible employees, including executive officers, employed by the
Company may participate in the ESPP and may contribute up to 15% of their earnings for the purchase of the Company’s common stock
under the ESPP. Unless otherwise determined by the Company’s board of directors, common stock will be purchased for accounts of
employees participating in the ESPP at a price per share equal to the lower of (a) 85% of the fair market value of a share of the

103

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

Company’s common stock on the first date of an offering or (b) 85% of the fair market value of a share of the Company’s common stock on
the date of purchase. As of December 31, 2018, the number of shares of common stock reserved for future issuance under the ESPP is
2,130,864 shares.

Employee Incentive Bonus

In May 2013, the Company's compensation committee amended its Executive Incentive Bonus Plan to permit the settlement of

awards under the plan in any combination of cash or shares of its common stock. Additionally, the Company settles a majority of bonus
awards for all other employees in common stock. When bonus awards are settled in common stock issued under the 2010 Plan, the number
of shares issuable to plan participants is determined based on the closing sales price of the Company's common stock as determined in
trading on the New York Stock Exchange on the date approved by the Board of Directors. In February 2018, the Company issued 0.3
million freely-tradable shares of its common stock in settlement of bonus awards to employees, including executives, for the 2017
performance period. In February 2017, the Company issued 0.2 million freely-tradable shares of its Class A common stock in settlement of
bonus awards to employees, including executives, for the July 1, 2016 to December 31, 2016 performance period. In August 2016, the
Company issued 0.2 million freely-tradable shares of its Class A common stock in settlement of bonus awards to employees, including
executives, for the January 1, 2016 to June 30, 2016 performance period. At December 31, 2018, an accrual of $8.9 million was recorded
for bonus awards for employees for the January 1, 2018 to December 31, 2018 performance period, which the Company intends to settle in
shares of its common stock to be issued under its 2010 Equity Incentive Plan, as amended, with the number of shares issuable to plan
participants determined based on the closing sales price of the Company’s common stock as determined in trading on the New York Stock
Exchange at a date to be determined. The Company's compensation committee retains discretion to effect payment in cash, stock, or a
combination of cash and stock.

Stock-Based Compensation

The Company recognizes stock-based compensation expense in the consolidated statements of operations, based on the department

to which the related employee reports, as follows:

Cost of net revenue
Research and development
Selling, general and administrative
Restructuring expense

Years Ended December 31,

2018

2017

(in thousands)

2016

489 $

17,953
13,279
—
31,721 $

332 $

16,190
11,016
5,130
32,668 $

210
14,403
7,152
—
21,765

The total unrecognized compensation cost related to unvested restricted stock units as of December 31, 2018 was $53.4 million, and

the weighted average period over which these equity awards are expected to vest is 2.62 years. The total unrecognized compensation cost
related to unvested stock options as of December 31, 2018 was $4.5 million, and the weighted average period over which these equity
awards are expected to vest is 2.84 years.

Restricted Stock Units and Restricted Stock Awards

The Company calculates the fair value of restricted stock units and restricted stock awards based on the fair market value of the

Company’s common stock (formerly Class A common stock) on the grant date. Stock-based compensation expense is recognized over the
vesting period using the straight-line method.

104

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

A summary of the Company’s restricted stock unit and restricted stock award activity for the year ended December 31, 2018 is as

follows:

Outstanding at December 31, 2017

Granted
Vested
Canceled

Outstanding at December 31, 2018

Employee Stock Purchase Rights and Stock Options

Number of Shares
(in thousands)

Weighted-Average
Grant-Date Fair Value
per Share

3,183 $
2,460
(1,736)
(644)
3,263

20.13
19.40
18.64
20.90

20.23

The Company uses the Black-Scholes valuation model to calculate the grant-date fair value of employee stock purchase rights and

stock options. Stock-based compensation expense is recognized over the vesting period using the straight-line method.

Employee Stock Purchase Rights

During the year ended December 31, 2018, there were 275,782 shares of common stock purchased under the ESPP at a weighted

average price of $16.14.

The fair values of employee stock purchase rights were estimated using the Black-Scholes option pricing model at their respective

grant date using the following assumptions:

Weighted-average grant date fair value per share
Risk-free interest rate
Dividend yield
Expected term (in years)
Volatility

Years Ended December 31,

2018

2017

$5.01 - $5.37
2.09 - 2.51%
—%
0.5

38.82 - 46.17%

$6.20 - $7.46
0.60 - 1.39%
—%

0.38 - 0.50
29.56 - 49.94%

2016

$5.85 - $6.20
0.38 - 0.6%

—%
0.5
49.94 - 53.94%

The risk-free interest rate assumption was based on the United States Treasury’s rates for U.S. Treasury zero-coupon bonds with

maturities similar to those of the expected term of the award being valued. The assumed dividend yield was based on the Company’s
expectation of not paying dividends in the foreseeable future. The expected term is the duration of the offering period for each grant date.
In addition, the estimated volatility incorporates the historical volatility over the expected term based on the Company's daily closing stock
prices.

Stock Options

A summary of the Company’s stock option activity for the year ended December 31, 2018 is as follows:

Number of Options
(in thousands)

Weighted-Average
Exercise Price

Weighted-Average
Contractual Term
(in years)

Aggregate Intrinsic
Value
(in thousands)

Outstanding at December 31, 2017

Granted
Exercised
Canceled

Outstanding at December 31, 2018

Vested and expected to vest at December 31, 2018
Exercisable at December 31, 2018

3,069 $
335
(636)
(109)
2,659 $
2,630 $
2,184 $

105

8.95
18.40
7.04
16.82
10.27
10.19
8.71

2.23 $
2.19 $
1.43 $

20,800
20,782
20,322

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

The fair values of stock options granted were estimated using the Black-Scholes option pricing model on the grant date using the

following assumptions:

Years Ended December 31,

2018

2016(2)

Weighted-average grant date fair value per share
Risk-free interest rate
Dividend yield
Expected term (in years)
Volatility
_____________
(1) On May 12, 2017, the Company assumed certain stock options and restricted stock units from Exar. The assumptions above pertain to
the Company's estimates of the fair value of such assumed equity awards, of which the vested portion was allocated to purchase price and
the unvested portion allocated to future unrecognized compensation expense to be recognized over the remaining service period of the
awards.

8.14
2.76%
—%
5.5
44.30%

N/A
N/A
N/A
N/A
N/A

45.39% - 50.32%

1.6 - 6.0

2017(1)
8.77 - 21.04
1.29% - 1.99%
—%

(2) No options were granted during the year ended December 31, 2016.

The risk-free interest rate assumption was based on the United States Treasury’s rates for U.S. Treasury zero-coupon bonds with

maturities similar to those of the expected term of the award being valued. The assumed dividend yield was based on the Company’s
expectation of not paying dividends in the foreseeable future. The expected term of the options was calculated using the simplified method
as prescribed by guidance provided by the SEC. This decision was based on the lack of historical data due to the Company’s limited
number of stock option exercises under the 2010 Equity Incentive Plan. Estimated volatility incorporates historical volatility of the
Company over the expected term based on the Company's daily closing stock prices.

The intrinsic value of stock options exercised during 2018, 2017 and 2016 was $8.1 million, $16.3 million, and $6.5 million,

respectively. Cash received from exercise of stock options was $0.7 million, $7.9 million and $3.6 million during the years ended
December 31, 2018, 2017 and 2016, respectively. The tax benefit from stock options exercised was $7.8 million, $11.9 million, and $5.7
million during the years ended December 31, 2018, 2017 and 2016, respectively.

10. Income Taxes

The domestic and international components of income (loss) before income taxes are presented as follows:

Domestic
Foreign
Income (loss) before income taxes

106

Years Ended December 31,

2018

2017

2016

(in thousands)

16,405 $
(49,257)
(32,852) $

42,580 $
(76,578)
(33,998) $

75,778
(12,088)
63,690

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

The income tax provision (benefit) consists of the following:

Current:

Federal
State
Foreign

Total current
Deferred:

Federal
State
Foreign
Change in valuation allowance

Total deferred

Total income tax provision (benefit)

Years Ended December 31,

2018

2017

2016

(in thousands)

3,292 $
37
1,640
4,969

788
(2,799)
(3,884)
(5,727)
(11,622)
(6,653) $

13,470 $

26
1,784
15,280

19,451
(4,668)
(3,697)
(51,177)
(40,091)
(24,811) $

1,216
(11)
1,092
2,297

17,492
(8,271)
(2,459)
(6,661)
101
2,398

The actual income tax provision (benefit) differs from the amount computed using the federal statutory rate as follows:

Provision (benefit) at statutory rate
State income taxes (net of federal benefit)
Research and development credits
Foreign rate differential
Stock compensation
Foreign deemed dividend
Transaction costs
Provision to return
Uncertain tax positions
Foreign tax credits
Permanent and other
Foreign unremitted earnings
Tax Act
Other tax rate changes
Valuation allowance
Total income tax provision (benefit)

Years Ended December 31,

2018

2017

2016

(in thousands)

(6,814) $
20
(8,849)
8,640
74
1,103
—
(27)
1,463
—
1,319
1,960
185
—
(5,727)
(6,653) $

(11,899) $

17
(8,153)
23,666
(5,713)
—
553
(917)
1,993
(5)
1,730
(1,368)
25,205
1,257
(51,177)
(24,811) $

22,294
(13)
(9,076)
2,888
(5,756)
51
749
—
(1,204)
(72)
(802)
—
—
—
(6,661)
2,398

107

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

The components of the deferred income tax assets are as follows:

Deferred tax assets:

Net operating loss carryforwards
Research and development credits
Accrued expenses and other
Accrued compensation
Stock-based compensation
Intangible assets

Less valuation allowance

Deferred tax liabilities:

Fixed assets
Intangible assets
Unremitted foreign earnings

Net deferred tax assets

December 31,

2018

2017

(in thousands)

64,887 $
75,032
7,965
2,504
2,550
—
152,938
(79,196)
73,742

(1,391)
(20,833)
—
51,518 $

77,355
69,668
10,506
2,444
2,659
—
162,632
(84,560)
78,072

(1,777)
(35,981)
(436)
39,878

At December 31, 2018, the Company had federal, state and foreign tax net operating loss carryforwards of approximately $261.4
million, $95.5 million and $13.6 million, respectively. The federal, state and foreign tax loss carryforwards will begin to expire in 2020,
2019 and 2026 respectively, unless previously utilized.

At December 31, 2018, the Company had federal, state and foreign tax credit carryforwards of approximately $37.8 million, $83.1

million and $5.6 million, respectively. The federal and foreign tax credit carryforwards will begin to expire in 2023 and 2024 respectively,
unless previously utilized. The state tax credit carryforwards do not expire. The Company also has foreign incentive deductions of
approximately $23.5 million that do not expire.

In addition, the Company has $0.7 million of federal alternative minimum tax credit carryforwards that will be refundable in future

years, due to the Tax Cuts and Jobs Act described below.

The Company utilizes the asset and liability method of accounting for income taxes, under which deferred taxes are determined
based on temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect
during the years in which the temporary differences reverse. The Company records a valuation allowance to reduce its deferred taxes to the
amount it believes is more likely than not to be realized. In making such determination, the Company considers all available positive and
negative evidence quarterly, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning
strategies, and recent financial performance. Forming a conclusion that a valuation allowance is not required is difficult when there is
negative evidence such as cumulative losses in recent years. Based upon the Company's review of all positive and negative evidence, the
Company released $51.2 million in valuation allowance against certain of its deferred tax assets in 2017. In 2018, the Company released an
additional $11.3 million of its valuation allowance as a result of completing its analysis of the effects of the Tax Act. The Company
continues to have a valuation allowance on its state deferred taxes, certain of its federal deferred tax assets, and certain foreign deferred tax
assets in jurisdictions where the Company has cumulative losses or otherwise is not expected to utilize certain tax attributes. The Company
does not incur expense or benefit in certain tax free jurisdictions in which it operates.

The income tax benefit for the year ended December 31, 2018 primarily related to a partial release of the Company's valuation

allowance as a result of the Tax Act and the mix of pre-tax income among jurisdictions, excess tax benefits related to stock-based
compensation, and release of uncertain tax positions under ASC 740-10.

The income tax benefit for the year ended December 31, 2017 primarily related to the release of the federal valuation allowance in

108

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

reductions to our foreign corporate tax rates on our deferred income taxes in Singapore as a result of the concessionary income tax rates in
Singapore. The income tax benefit for the year ended December 31, 2017 included provisional estimates for certain tax effects of the Tax
Act for which accounting under ASC 740 was incomplete. Provisional amounts related to the Tax Act were subject to adjustment during a
one-year measurement period, which ended December 31, 2018. During 2018, we recorded an additional income tax benefit of $11.3
million for a reduction to our federal valuation allowance on certain net operating loss carryforwards as a result of additional projected
federal taxable income resulting from the Tax Act. Other changes to provisional amounts related to the Tax Act did not have a material
impact on our income tax benefit for 2018.

Income tax positions must meet a more-likely-than-not threshold to be recognized. Income tax positions that previously failed to
meet the more-likely-than-not threshold are recognized in the first subsequent financial reporting period in which that threshold is met.
Previously recognized tax positions that no longer meet the more-likely-than-not threshold are derecognized in the first financial reporting
period in which that threshold is no longer met. The Company records potential penalties and interest accrued related to unrecognized tax
benefits within the consolidated statements of operations as income tax expense. At December 31, 2018, the Company’s unrecognized tax
benefits totaled $61.5 million, $52.2 million of which, if recognized at a time when the valuation allowance no longer exists, would affect
the effective tax rate. At December 31, 2018, the Company had accrued approximately $1.1 million of interest and penalties. The Company
does not expect its unrecognized tax benefits to change significantly over the next 12 months.

The following table summarizes the changes to the unrecognized tax benefits during 2018, 2017 and 2016:

Balance as of December 31, 2015
Additions based on tax positions related to the current year
Decreases based on tax positions of prior year
Balance as of December 31, 2016
Additions based on tax positions related to the current year
Additions related to acquisitions
Decreases based on tax positions of prior year
Balance as of December 31, 2017
Additions based on tax positions related to the current year
Decreases based on tax positions of prior year
Balance as of December 31, 2018

(in thousands)

26,053
2,025
(4,661 )
23,417
3,037
37,090

(458 )
63,086
3,080
(4,696 )
61,470

The Company is subject to federal and state income tax in the United States and is also subject to income tax in certain other foreign
tax jurisdictions. At December 31, 2018, the statutes of limitations for the assessment of federal, state, and foreign income taxes are closed
for the years before 2015, 2014 and 2011, respectively.

In April 2017, the Company's subsidiary in Singapore began operating under certain tax incentives in Singapore, which are generally

effective through March 2022, and are conditional upon meeting certain employment and investment thresholds in Singapore. Under the
incentives, qualifying income derived from certain sales of the Company's integrated circuits is taxed at a concessionary rate over the
incentive period, and there are reduced Singapore withholding taxes on certain intercompany royalties during the incentive period.
Primarily because of the Company's Singapore net operating losses and a full valuation allowance in Singapore, the incentives did not have
a material impact on the Company's income tax expense in 2017 or 2018.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs

Act, or the Tax Act. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years
beginning in 2018, the transition of U.S international taxation from a worldwide tax system to a territorial system, which includes a new
federal tax on global intangible low-taxed income (Global Minimum Tax or GMT), and a one-time transition tax on the mandatory deemed
repatriation of cumulative foreign earnings as of December 31, 2017. The Company calculated its best estimate of the impact of the Tax
Act in its 2017 income tax benefit in accordance with its understanding of the Tax Act and guidance available as of the date of the 2017 10-
K filing.

In addition, the SEC Staff issued SAB 118, which provides guidance on accounting for the tax effects of the Tax Act. SAB 118

provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the
accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax

109

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

effects of those aspects of the Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for
certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it was previously required to record
a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial
statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the
enactment of the Tax Act. The provisional amounts were subject to revisions as the Company completed its analysis of the Tax Act,
collected and prepared necessary data, and interpreted any additional guidance issued by the U.S. Treasury Department, Internal Revenue
Service, or IRS, FASB, and other standard-setting and regulatory bodies. The measurement period expired on December 31, 2018 and the
Company's accounting for the Tax Act is complete. During 2018, the Company reduced its valuation allowance on certain of its federal
deferred tax assets by $11.3 million as a result of completing its analysis of the effects of the Tax Act. The other changes in 2018 to
provisional amounts recorded in 2017 for the effects of the Tax Act were not material.

11. Employee Retirement Plan

The Company has a 401(k) defined contribution retirement plan (the 401(k) Plan) covering all eligible employees. Participants may

voluntarily contribute on a pre-tax basis an amount not to exceed a maximum contribution amount pursuant to Section 401(k) of the
Internal Revenue Code. The Company is not required to contribute, nor has it contributed, to the 401(k) Plan for any of the periods
presented.

12. Commitments and Contingencies

Lease Commitments and Other Contractual Obligations

The Company leases facilities and certain equipment under operating lease arrangements expiring at various years through fiscal

2023. Certain of our leases contain standard rent escalation and renewal clauses. Lease expense for lease payments is recognized on a
straight-line basis over the lease term. As of December 31, 2018, future minimum payments under non-cancelable operating leases,
inventory purchase and other obligations are as follows:

2019
2020
2021
2022
2023
Thereafter
Total minimum payments

Operating
Leases

Inventory
Purchase
Obligations

(in thousands)

Other
Obligations

Total

9,365 $
9,576
9,286
4,511
1,205
—
33,943 $

65,661 $

—
—
—
—
—
65,661 $

8,386 $
4,424
693
425
447
—
14,375 $

83,412
14,000
9,979
4,936
1,652
—
113,979

Other obligations consist of contractual payments due for software licenses.

The total rental expense for all operating leases was $4.5 million, $4.2 million and $2.9 million for the years ended December 31,

2018, 2017 and 2016, respectively.

The Company has subleased certain facilities that it ceased using in connection with a restructuring plan (Note 4). Such subleases

expire at various years through fiscal 2023. As of December 31, 2018, future minimum rental income under non-cancelable subleases are as
follows:

110

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

2019
2020
2021
2022
2023
Thereafter
Total minimum rental income

Amount

(in thousands)

3,566
4,036
4,057
782
291
—
12,732

Total sublease income related to leased facilities the Company ceased using in connection with a restructuring plan for the years

ended December 31, 2018, 2017 and 2016 was approximately $2.4 million, $2.1 million and $1.3 million, respectively (Note 4).

Exar iML Divestiture Indemnification

Under the terms of the purchase agreement relating to the November 9, 2016 divestiture of Integrated Memory Logic Limited, or
iML, by Exar, Exar agreed to indemnify the purchaser of the business unit for breaches of representations and warranties and covenants
and for certain other matters. Exar also agreed to place $5.0 million of the total purchase price into an escrow account for a period of 18
months to partially secure its indemnification obligations under the purchase agreement; of this amount, $0.8 million remained in escrow as
of December 31, 2018; $1.3 million has been released to the purchaser of iML and $2.9 million has been released to Exar through
December 31, 2018. Exar’s indemnification obligations for breaches of representations and warranties survived for 12 months from the
closing of the sale transaction, except for breaches of representations and warranties covering intellectual property, which survived for 18
months, and breaches of representations and warranties of certain fundamental representations, which survive until the expiration of the
applicable statute of limitations. Exar’s maximum indemnification obligation for breaches of representations and warranties, other than
intellectual property and fundamental representations, is $13.6 million, its maximum indemnification obligation for breaches of intellectual
property representations is $34.0 million, and is maximum indemnity obligation for breaches of fundamental representations is the full
purchase price amount (approximately $136.0 million). The aggregate amount recovered by the purchaser in accordance with the
indemnification provisions with respect to matters that are subject to the intellectual property representations, together with the aggregate
amount recovered by the Buyer in accordance with the indemnification provisions with respect to matters that are subject to the general
representations and warranties (other than fundamental representations), will in no event exceed $34.0 million. The Company believes it
does not have a material indemnification obligation as of December 31, 2018; however, if the Company were required to make payments in
satisfaction of these indemnification obligations related to breaches of representations and warranties of certain fundamental obligations
which have not yet expired, it could have a material adverse effect on the Company's business, financial condition, results of operations,
and cash flows.

CrestaTech Litigation

On January 21, 2014, CrestaTech Technology Corporation, or CrestaTech, filed a complaint for patent infringement against the
Company in the United States District Court of Delaware, or the District Court Litigation. In its complaint, CrestaTech alleged that the
Company infringed U.S. Patent Nos. 7,075,585, or the ‘585 Patent and 7,265,792, or the ‘792 Patent. In addition to asking for
compensatory damages, CrestaTech alleged willful infringement and sought a permanent injunction. CrestaTech also named Sharp
Corporation, Sharp Electronics Corp. and VIZIO, Inc. as defendants based upon their alleged use of the Company's television tuners.

On January 28, 2014, CrestaTech filed a complaint with the U.S. International Trade Commission, or ITC, again naming, among

others, MaxLinear, Sharp, Sharp Electronics, and VIZIO, or the ITC Investigation. On May 16, 2014, the ITC granted CrestaTech’s motion
to file an amended complaint adding six OEM Respondents, namely, SIO International, Inc., Hon Hai Precision Industry Co., Ltd., Wistron
Corp., Wistron Infocomm Technology (America) Corp., Top Victory Investments Ltd. and TPV International (USA), Inc. which are
collectively referred to with MaxLinear, Sharp and VIZIO as the Company Respondents. CrestaTech’s ITC complaint alleged a violation of
19 U.S.C. § 1337 through the importation into the United States, the sale for importation, or the sale within the United States after
importation of MaxLinear's accused products that CrestaTech alleged infringe the same two patents asserted in the Delaware action.
Through its ITC complaint, CrestaTech sought an exclusion order preventing entry into the United States of certain of the Company's
television tuners and televisions

111

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

containing such tuners from Sharp, Sharp Electronics, and VIZIO. CrestaTech also sought a cease and desist order prohibiting the Company
Respondents from engaging in the importation into, sale for importation into, the sale after importation of, or otherwise transferring within
the United States certain of the Company's television tuners or televisions containing such tuners.

On March 10, 2014, the court stayed the District Court Litigation pending resolution of the ITC Investigation.

On December 15, 2014, the ITC held a trial in the ITC Investigation. On February 27, 2015, the Administrative Law Judge, or the
ALJ, issued a written Initial Determination, or ID, ruling that the Company Respondents do not violate Section 1337 in connection with
CrestaTech’s asserted patents because CrestaTech failed to satisfy the economic prong of the domestic industry requirement pursuant to
Section 1337(a)(2). In addition, the ID stated that certain of the Company's television tuners and televisions incorporating those tuners
manufactured and sold by certain customers infringe three claims of the ‘585 Patent (claims 10, 12 and 13), and these three claims were not
determined to be invalid. On April 30, 2015, the ITC issued a notice indicating that it intended to review portions of the ID finding no
violation of Section 1337, including the ID’s findings of infringement with respect to, and validity of, the ‘585 Patent, and the ID’s finding
that CrestaTech failed to establish the existence of a domestic industry within the meaning of Section 1337.

The ITC subsequently issued its opinion, which terminated its investigation. The opinion affirmed the findings of the ALJ that no

In addition, the Company has filed four petitions for inter partes review, or IPR, by the US Patent Office, two for each of the
CrestaTech patents asserted against the Company. The Patent Trial and Appeal Board, or the PTAB, did not institute two of these IPRs as
being redundant to IPRs filed by another party that were already underway for the same CrestaTech patent. The remaining two petitions
were instituted or instituted-in-part meaning, together with the IPRs filed by third parties, there were six IPR proceedings instituted
involving the two CrestaTech patents asserted against the Company.

In August 2016, the PTAB issued final written decisions in the remaining four pending IPR proceedings (two for each of the

asserted patents), holding that many of the reviewed claims - including the two remaining claims of the ‘585 Patent which the ITC held
were infringed - are unpatentable. The parties have appealed the two decisions related to the ‘585 Patent; however, no appeals were filed as
to the PTAB's rulings for the ‘792 Patent. The Federal Circuit heard oral argument on these appeals on December 4, 2017. On December 7,
the Federal Circuit issued a Rule 36 affirmance in one of the '585 appeals, affirming that the two remaining claims that the ITC had ruled
were valid and infringed (claims 12 and 13) are unpatentable. On January 25, 2018, the Federal Circuit issued its ruling in the other ‘585
appeal, vacating the PTAB's ruling that certain claims were not unpatentable and remanding to the PTAB for further analysis of whether
CrestaTech is estopped from arguing and/or has waived the right to argue whether six dependent claims are patentable.

As a result of these IPR decisions, all 13 claims that CrestaTech asserted against the Company in the ITC Investigation have been

found to be unpatentable by the PTAB and the Federal Circuit.

In April 2017, the Delaware court continued the stay of the District Court Litigation per the parties’ request, pending resolution of

112

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

asserting in any of the proceedings purchased through the Sale Agreement,” which includes the District Court Litigation against the
Company. In re Cresta Technology Corporation, Case No. 16-50808 (N.D. Cal. Bank. 2016) at Dkt. No. 270. At this time, the Company
cannot predict whether the District Court or other litigation will be re-instated.

Trango Systems, Inc. Litigation

On or about August 2, 2016, Trango Systems, Inc., or Trango, filed a complaint in the Superior Court of California, County of San

Diego, Central Division, against defendants Broadcom Corporation, Inc., or Broadcom, and the Company, collectively, Defendants. Trango
is a purchaser that alleges various fraud, breach of contract, and interference with economic relations claims in connection with the
discontinuance of a chip line the Company acquired from Broadcom in 2016. Trango seeks unspecified general and special damages, pre-
judgment interest, expenses and costs, attorneys’ fees, punitive damages, and unspecified injunctive and equitable relief. On June 23, 2017,
the Court sustained the Company's demurrer to each cause of action in the second amended complaint filed on or about December 6, 2016.
Trango filed its third amended complaint on or about July 13, 2017. On February 23, 2018, the Court sustained, in part, the Company's
demurrer, dismissing with prejudice the cause of action for breach of a written contract, and Trango voluntarily dismissed its cause of
action for breach of an implied-in-fact contract. The remaining causes of action have been permitted to proceed. On March 15, 2018,
Trango filed its fourth amended complaint. The Company filed its answer on April 17, 2018. Also, on April 17, Broadcom filed a cross-
complaint against the Company, alleging causes of action for indemnity, contribution and apportionment, and declaratory relief. Broadcom
voluntarily dismissed the cross-complaint on June 8, 2018. On December 10, 2018, the Company filed a motion for summary judgment, or
in the alternative summary adjudication concerning all of Trango’s causes of action asserted against it. The hearing on that motion is
currently scheduled for March 1, 2019. The trial date is set for May 3, 2019. The Company intends to continue to vigorously defend against
the lawsuit as it proceeds.

The Company cannot predict the outcome of the Trango Systems, Inc. litigation. Any adverse determination in the Trango Systems,

Inc. litigation could have a material adverse effect on the Company's business and operating results.

Other Matters

In addition, from time to time, the Company is subject to threats of litigation or actual litigation in the ordinary course of business,
some of which may be material. Other than the CrestaTech and Trango litigation described above, the Company believes that there are no
other currently pending litigation matters that, if determined adversely by the Company, would have a material effect on the Company's
business or that would not be covered by the Company's existing liability insurance.

13. Concentration of Credit Risk, Significant Customers and Geographic Information

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash
equivalents and accounts receivable. Collateral is generally not required for customer receivables. The Company limits its exposure to
credit loss by placing its cash with high credit quality financial institutions. At times, such deposits may be in excess of insured limits. The
Company has not experienced any losses on its deposits of cash and cash equivalents.

Significant Customers

The Company markets its products and services to manufacturers of a wide range of electronic devices (Note 1). The Company

makes periodic evaluations of the credit worthiness of its customers.

113

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

Customers comprising greater than 10% of net revenues for each of the periods presented are as follows:

Percentage of total net revenue
Customer A
Customer B

Years Ended December 31,

2018

2017

2016

18%
*

25%
*

27%
10%

* Represents less than 10% of the net revenue for the respective period.

Balances greater than 10% of accounts receivable, based on the Company's billings to the contract manufacturer customers, are as

follows:

Percentage of gross accounts receivable
Customer C
Customer D
Customer E

* Represents less than 10% of the gross accounts receivable for the respective period end.

Suppliers comprising greater than 10% of total inventory purchases are as follows:

Vendor A
Vendor B
Vendor C
Vendor D
Vendor E
Vendor F

* Represents less than 10% of the inventory purchases for the respective period.

114

December 31,

2018

2017

*
*
10%

Years ended December 31,

2018

2017

2016

16%
19%
15%
*
13%
*

21%
16%
15%
14%
11%
*

17%
10%
*

16%
13%
11%
11%
18%
12%

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

Geographic Information

The Company's consolidated net revenues by geographic area based on ship-to location are as follows (in thousands):

Asia
United States
Rest of world
Total

Years Ended December 31,

2018

2017

2016

Amount
$ 312,877
18,060
54,060
$ 384,997

% of total net
revenue

Amount
81% $ 372,103
10,829
5%
14%
37,386
100% $ 420,318

% of total
net revenue Amount

89% $ 360,325
9,181
2%
18,326
9%
100% $ 387,832

% of total
net revenue
93%
2%
5%
100%

The products shipped to individual countries representing greater than 10% of net revenue for each of the periods presented are as

follows:

Percentage of total net revenue
China

Years Ended December 31,

2018

2017

2016

63%

71%

78%

The determination of which country a particular sale is allocated to is based on the destination of the product shipment. No other

individual country accounted for more than 10% of net revenue during these periods.

Long-lived assets, which consists of property and equipment, intangible assets, and goodwill, by geographic area are as follows (in

thousands):

United States
Singapore
Rest of world

Total

As of December 31,

Amount

2018
% of total

2017
% of total

Amount
85% $ 481,638
92,414
14%
1,643
1%
100% $ 575,695

84%
16%
—%
100%

$ 426,321
71,945
3,368
$ 501,634

115

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

14. Revenue from Contracts with Customers

Revenue by Market

The table below presents disaggregated net revenues by market (in thousands):

Connected home

% of net revenue

Infrastructure

% of net revenue

Industrial and multi-market

% of net revenue

Total net revenue
______________

Years Ended December 31,

2018

2017(1)

2016(1)

207,336

288,610

346,990

54%

82,388

21%

95,273

25%

69%

71,779

17%

59,929

14%

89%

37,411

10%

3,431

384,997

420,318

387,832

Contract Liabilities

As of December 31, 2018, customer contract liabilities consist of estimates of obligations to deliver rebates to customers in the form
of units of products and were approximately $0.1 million. Revenue recognized in the year ended December 31, 2018 that was included in
the contract liability balance as of January 1, 2018 was immaterial.

There were no material changes in the contract liabilities balance during the year ended December 31, 2018.

Obligations to Customers for Price Adjustments and Returns and Assets for Right-of-Returns

As of December 31, 2018, obligations to customers consisting of estimates of price protection rights offered to the Company's end

customers totaled $16.5 million and are included in accrued price protection liability in the consolidated balance sheets. For activity in this
account, including amounts included in net revenue, refer to Note 7. Other obligations to customers representing estimates of price
adjustments to be claimed by distributors upon sell-through of their inventory to their end customer and estimates of stock rotation returns
to be claimed by distributors on products sold as of December 31, 2018 were $7.6 million and $1.5 million, respectively, and are included
in accrued expenses and other current liabilities in the consolidated balance sheets (Note 7). The increase in revenue from net changes in
transaction prices for amounts included in obligations to customers for price adjustments as of January 1, 2018 was not material. As of
December 31, 2018, right of return assets under customer contracts representing the estimates of product inventory the Company expects to
receive from customers in stock rotation returns were approximately $0.3 million. Right of return assets are included in inventory in the
consolidated balance sheets (Note 7).

As of December 31, 2018, there were no impairment losses recorded on customer accounts receivable.

15. Selected Quarterly Financial Data (Unaudited)

The following table presents the Company’s unaudited quarterly financial data for each of the eight quarters in the period ended

December 31, 2018. In management’s opinion, this information has been presented on the same basis as the audited consolidated financial
statements included in a separate section of this report, and all necessary adjustments, consisting only of normal recurring adjustments, have
been included in the amounts below to present fairly the unaudited quarterly results when read in conjunction with the audited consolidated
financial statements and related notes. As described in Note 1, as a result of the adoption of ASC 606 as of January 1, 2018 using the
modified retrospective method, prior period amounts have not been adjusted to reflect the change to recognize certain distributor sales upon
sale to the distributor, or the sell-in method, from recognition upon the Company's sale to the distributors' end customers, or the sell-
through method, which required the deferral

116

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts and percentage data)

of revenue and profit on such distributor sales. The operating results for any quarter should not be relied upon as necessarily indicative of
results for any future period.

Net revenue
Gross profit
Net income (loss)
Net income (loss) per share:
Basic
Diluted

First Quarter

Year Ended December 31, 2018

Second Quarter
(in thousands, except per share amounts)

Third Quarter

Fourth Quarter

110,827 $
62,668

1,847 $

101,533 $
56,330
(14,422) $

85,010 $
43,876
(13,935) $

0.03 $
0.03 $

(0.21) $
(0.21) $

(0.20) $
(0.20) $

87,627
45,900
311

0.00
0.00

Year Ended December 31, 2017

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

(in thousands, except per share amounts)

88,841 $
52,924 $
8,463 $

0.13 $
0.12 $

104,175 $
51,104 $
10,965 $

113,581 $
51,842 $
(9,167) $

0.17 $
0.16 $

(0.14) $
(0.14) $

113,721
52,093
(19,448)

(0.29)
(0.29)

$
$

$
$
$

$
$

117

SIGNIFICANT SUBSIDIARIES OF MAXLINEAR, INC.

Name

MaxLinear Asia Singapore Pte. Ltd.
Entropic Communications, LLC
Exar Corporation

Jurisdiction

Singapore
Delaware, U.S.A.
Delaware, U.S.A

EXHIBIT 21.1

Consent of Independent Registered Public Accounting Firm

EXHIBIT 23.1

We have issued our reports dated February 5, 2019, with respect to the consolidated financial statements, financial statement schedule, and
internal control over financial reporting included in the Annual Report of MaxLinear, Inc. on Form 10-K for the year ended December 31,
2018. We consent to the incorporation by reference of said reports in the Registration Statements of MaxLinear, Inc. on Form S-4 (File No.
333-202679) and on Forms S-8 (File No. 333-217021, File No. 333-218022, and File No. 333-223847).

/s/ Grant Thornton, LLP

Newport Beach, California
February 5, 2019

Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

EXHIBIT 31.1

I, Kishore Seendripu, Ph.D., certify that:

I have reviewed this Form 10-K of
MaxLinear, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the
period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material

respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as

defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our

supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions

about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such
evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
most recent fiscal quarter (registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the
equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which

are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's

internal control over financial reporting.

Date:

February 5, 2019

/s/ Kishore Seendripu, Ph.D.
Kishore Seendripu, Ph.D.
President and Chief Executive Officer
(Principal Executive Officer)

Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

EXHIBIT 31.2

I, Steven G. Litchfield, certify that: