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

                     --------------------------------------

                                    FORM 10-Q

(Mark One)

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

For the quarterly period ended July 1, 2001

                                       OR

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

Commission file number 0-21970

                     --------------------------------------

                                ACTEL CORPORATION
             (Exact name of Registrant as specified in its charter)

                California                                       77-0097724
      (State or other jurisdiction of                         (I.R.S. Employer
      incorporation or organization)                        Identification No.)

          955 East Arques Avenue
           Sunnyvale, California                                 94086-4533
 (Address of principal executive offices)                        (Zip Code)

                                 (408) 739-1010
              (Registrant's telephone number, including area code)

                     --------------------------------------

     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 X         No

     Number of  shares  of Common  Stock  outstanding  as of  August  10,  2001:
23,861,791

<PAGE>


                         PART I -- FINANCIAL INFORMATION

Item 1.       Financial Statements.
<TABLE>
<CAPTION>

                                                     ACTEL CORPORATION

                                       CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                      (unaudited, in thousands except per share amounts)


                                                            Three Months Ended                  Six Months Ended
                                                 ----------------------------------------  --------------------------
                                                    Jul. 1,      Jul. 2,       Apr. 1,       Jul. 1,       Jul. 2,
                                                      2001         2000          2001          2001          2000
                                                 ------------  ------------  ------------  ------------  ------------
<S>                                              <C>           <C>           <C>           <C>           <C>
Net revenues................................     $     36,460  $     55,544  $     45,034  $     81,494  $    106,210
Costs and expenses:
   Cost of revenues.........................           17,572        20,949        16,874        34,446        40,157
   Research and development.................            9,103         8,888         9,764        18,867        17,239
   Selling, general, and administrative.....           10,289        11,827        11,184        21,473        23,356
   Amortization of goodwill and other
     acquisition-related intangibles........            3,729         1,544         3,749         7,478         2,567
   Purchased in-process research and
     development............................             --           5,558          --            --           5,558
                                                 ------------  ------------  ------------  ------------  ------------
         Total costs and expenses...........           40,693        48,766        41,571        82,264        88,877
                                                 ------------  ------------  ------------  ------------  ------------
Income (loss) from operations...............           (4,233)        6,778         3,463          (770)       17,333
Interest income and other, net..............            2,023         1,859         2,085         4,108         3,164
Gain on sale of Chartered Semiconductor
 common stock...............................             --          28,329          --            --          28,329
                                                 ------------  ------------  ------------  ------------  ------------
Income (loss) before tax provision and equity
   in net loss of equity method investee....           (2,210)       36,966         5,548         3,338        48,826
Equity in net (loss) of equity method investee           --            (356)         --            --            (479)
Tax provision...............................              421        16,498         2,753         3,174        20,136
                                                 ------------  ------------  ------------  ------------  ------------
Net income (loss)...........................     $     (2,631) $     20,112  $      2,795  $        164  $     28,211

Net income (loss) per share:
   Basic....................................     $      (0.11) $       0.86  $       0.12  $       0.01  $       1.23
                                                 ============  ============  ============  ============  ============
   Diluted..................................     $      (0.11) $       0.77  $       0.11  $       0.01  $       1.09
                                                 ============  ============  ============  ============  ============

Shares used in computing net income (loss)
 per share:
   Basic....................................           23,642        23,263        23,472        23,557        23,015
                                                 ============  ============  ============  ============  ============
   Diluted..................................           23,642        26,186        25,126        25,113        25,907
                                                 ============  ============  ============  ============  ============
</TABLE>

<PAGE>


                                ACTEL CORPORATION

                      CONSOLIDATED CONDENSED BALANCE SHEETS
                            (unaudited, in thousands)

                                                    Jul. 1,       Dec. 31,
                                                      2001          2000
                                                  ------------  ------------
                                     ASSETS

Current assets:
   Cash and cash equivalents..................    $      5,576  $      9,266
   Short-term investments.....................         128,334       131,544
   Accounts receivable, net...................          14,490        29,256
   Inventories, net...........................          33,438        25,503
   Deferred income taxes......................          26,118        26,118
   Prepaid expenses and other current assets..           4,232         7,598
                                                  ------------  ------------
         Total current assets.................         212,188       229,285
Property and equipment, net...................          13,363        12,137
Goodwill, net.................................          43,699        47,470
Other assets, net.............................          25,923        23,542
                                                  ------------  ------------
                                                  $    295,173  $    312,434
                                                  ============  ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Accounts payable...........................    $     11,902  $     14,921
   Accrued salaries and employee benefits.....           9,490        17,200
   Other accrued liabilities..................           4,586         5,354
   Income taxes payable.......................           1,497          --
   Deferred income............................          31,091        44,858
                                                  ------------  ------------
         Total current liabilities............          58,566        82,333
   Deferred compensation plan liability.......           1,934          --
                                                  ------------  ------------
         Total liabilities....................          60,500        82,333
Commitments and contingencies
Shareholders' equity:
   Common stock...............................              24            23
   Additional paid-in capital.................         154,169       150,709
   Retained Earnings..........................          80,072        79,908
   Note receivable from officer...............            (368)         (368)
   Unearned compensation cost.................            (430)         (922)
   Accumulated other comprehensive income.....           1,206           751
                                                  ------------  ------------
         Total shareholders' equity...........         234,673       230,101
                                                  ------------  ------------
                                                  $    295,173  $    312,434
                                                  ============  ============
<PAGE>


                                ACTEL CORPORATION

                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                            (unaudited, in thousands)

                                                           Six Months Ended
                                                        ----------------------
                                                         Jul. 1,      Jul. 2,
                                                           2001         2000
                                                        ---------    ---------
Operating activities:
   Net income .......................................   $     164    $  28,211
   Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
     Depreciation and amortization ..................      10,995        6,538
     Equity in net loss of equity method investee ...        --            479
     Unearned compensation cost recognized ..........         157         --
     Gain on sale of Chartered Semiconductor stock ..        --        (28,329)
     Purchased in-process research and development ..        --          5,558
     Changes in operating assets and liabilities:
       Accounts receivable ..........................      14,766       (5,143)
       Inventories ..................................      (7,935)      (1,437)
       Other current assets .........................       3,366         (187)
       Accounts payable, accrued salaries and
        employee benefits, and other accrued
        liabilities .................................     (11,668)       7,767
       Deferred compensation plan net assets ........        (124)        --
       Deferred income ..............................     (13,767)       5,799
       Deferred income taxes ........................        (664)        (822)
                                                        ---------    ---------
   Net cash (used in) provided by operating activities     (4,710)      18,434
                                                        ---------    ---------
Investing activities:
   Purchases of property and equipment ..............      (4,743)      (2,169)
   Purchases of available-for-sale securities .......     (97,180)    (154,935)
   Sales of available-for-sale securities ...........     101,295      113,840
   Proceeds from sale of Chartered Semiconductor
    common stock ....................................        --         39,009
   Cash acquired in Prosys acquisition ..............        --             43
   Note receivable from GateField ...................        --         (1,000)
   Other assets .....................................      (2,313)          24
                                                        ---------    ---------
   Net cash (used in) investing activities ..........      (2,941)      (5,188)
                                                        ---------    ---------
Financing activities:
   Receipt of note payable from officer .............        --           (368)
   Proceeds from sale of common stock ...............       3,961        9,827
                                                        ---------    ---------
   Net cash provided by financing activities ........       3,961        9,459
                                                        ---------    ---------
Net increase (decrease) in cash and cash equivalents       (3,690)      22,705
Cash and cash equivalents, beginning of period ......       9,266        4,939
                                                        ---------    ---------
Cash and cash equivalents, end of period ............   $   5,576    $  27,644
                                                        =========    =========
Supplemental disclosures of cash flow information:
   Cash paid for taxes ..............................   $     199    $  10,371
Supplemental disclosures of non-cash transactions:
   Issuance of common stock in conjunction with
    Prosys aquisition ...............................        --      $   7,526


<PAGE>


1.   Basis of Presentation and Summary of Significant Accounting Policies

     The  accompanying  unaudited  consolidated  financial  statements  of Actel
Corporation  (Actel) have been prepared in accordance  with  generally  accepted
accounting   principles  for  interim   financial   information   and  with  the
instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly,  these
financial  statements  do  not  include  all of the  information  and  footnotes
required by generally  accepted  accounting  principles  for complete  financial
statements. In the opinion of management,  all adjustments (consisting of normal
recurring  accruals)  considered  necessary  for a fair  presentation  have been
included.

     The consolidated financial statements include the accounts of Actel and its
wholly  owned   subsidiaries.   All   significant   intercompany   accounts  and
transactions  have been  eliminated  in  consolidation.  The  interim  financial
statements should be read in conjunction with the audited  financial  statements
included in Actel's  Annual Report on Form 10-K for the year ended  December 31,
2000. The results of operations for the three and six months ended July 1, 2001,
are not  necessarily  indicative  of results that may be expected for the entire
fiscal year, which ends January 6, 2002.

2.   Derivatives and Hedging

     On  January  1, 2001,  Actel  adopted  Statement  of  Financial  Accounting
Standards  (SFAS) No. 133,  "Accounting  for Derivative  Instruments and Hedging
Activities." SFAS 133 requires that all derivatives be recognized on the balance
sheet at fair market value.  Derivatives that are not hedges must be adjusted to
fair value through  earnings.  If the  derivative  is a hedge,  depending on the
nature of the  hedge,  changes in the fair  value of the  derivative  are either
offset against the change in the fair value of the hedged item through  earnings
or recognized in other comprehensive  income until the hedged item is recognized
in earnings.  The ineffective  portion of a derivative's change in fair value is
immediately  recognized  in  earnings.  The  adoption of SFAS 133 did not have a
material impact on Actel's consolidated financial position or operating results.

     Actel  purchases a portion of its wafers used in production from a Japanese
supplier  denominated  in  Japanese  Yen.  The  amount  of US  Dollars  that are
necessary  to purchase  wafers is subject to  fluctuations  in foreign  currency
exchange rates between the US Dollar and Yen. Actel enters into foreign exchange
forward  contracts  to reduce the  variability  in the amount of US Dollars that
will be required to settle forecasted wafer purchases denominated in Yen.

     Actel's  accounting  policies  for  these  forward  contracts  are based on
Actel's  designation of the Yen forward  contracts as foreign currency cash flow
hedges.  The  criteria  Actel  uses for  designating  an  instrument  as a hedge
includes its effectiveness in exposure reduction and one-to-one  matching of the
derivative  financial  instrument with the underlying  transaction being hedged.
Hedge  effectiveness  is assessed by  comparing  the change in fair value of the
forward contract with the change in fair value of the forecasted payments. Gains
and losses on these contracts are recognized upon usage of the contracts and are
included  in  cost  of  sales  along  with  the  offsetting  gain or loss on the
underlying  transactions  being hedged. If the criteria for designation of these
instruments as hedging  transactions are not met, then the instruments  would be
marked to market,  with gains and losses  recognized in that period.  At July 1,
2001, and December 31, 2000,  Actel had no forward  foreign  exchange  contracts
outstanding  and  no  amounts  related  to  valuation  of  derivative  financial
instruments were included in other comprehensive income at either date.

     Actel limits the amount of forward foreign exchange  contract to the amount
sufficient to hedge forecasted Yen-based payments for a maximum of three months.
Actel does not use forward foreign exchange contracts for speculative or trading
purposes.  During the second  quarter of 2001,  Actel did not enter into or hold
any forward foreign exchange contracts.  During the first quarter of 2001, Actel
recognized  $15,000 in loss on the income  statement  related to forward foreign
exchange contracts. The forward contracts were perfectly effective as hedges and
offset gains of $15,000 on payments for Yen denominated  wafer purchases  during
the quarter.

3.   Equity Accounting

     During 1998,  Actel entered into a product  marketing rights agreement with
GateField Corporation (GateField) and made investments in GateField common stock
and GateField  convertible  preferred stock,  which were valued at cost.  During
1999,  Actel made additional  investments in GateField,  which resulted in Actel
accounting for its investments in GateField  under the equity method  commencing
July 1, 1999.

     On May 31, 2000,  GateField and Actel announced the signing of a definitive
agreement to merge.  On November 15, 2000,  the  acquisition  was  completed and
Actel paid cash  consideration of $5.25 for each share of GateField common stock
not already owned by Actel.  Equity  accounting was  discontinued as a result of
the acquisition on November 15, 2000.

4.   Inventories

     Inventories consist of the following:

                                                       July 1,       Dec. 31,
                                                         2001          2000
                                                     ------------  ------------
                                                           (in thousands)
Inventories:
   Purchased parts and raw materials.............    $      9,702  $      5,334
   Work-in-process...............................          19,533        11,443
   Finished goods................................           4,203         8,726
                                                     ------------  ------------
                                                     $     33,438  $     25,503
                                                     ============  ============

     Inventories are stated at the lower of cost (first-in, first-out) or market
(net  realizable  value).  Given the  volatility of the market for its products,
Actel makes inventory  provisions for potentially  excess and obsolete inventory
based on backlog and forecast demand. However, such backlog demand is subject to
revisions, cancellations, and rescheduling. Actual demand will inevitably differ
from such backlog and forecast  demand,  and such differences may be material to
the financial statements. Excess inventory increases handling costs and the risk
of  obsolescence,  is a  non-productive  use of  capital  resources,  and delays
realization of the price and performance  benefits associated with more advanced
manufacturing processes.

5.   Earnings Per Share

     The  following  table  sets  forth the  computation  of basic  and  diluted
earnings per share in accordance with SFAS No. 128, "Earnings per Share":

<TABLE>
<CAPTION>
                                                            Three Months Ended                  Six Months Ended
                                                 ----------------------------------------  --------------------------
                                                    Jul. 1,       Jul. 2,       Apr. 1,      Jul. 1,        Jul. 2,
                                                     2001          2000          2001         2001           2000
                                                 ------------  ------------  ------------  ------------  ------------
                                                               (in thousands, except per share amounts)
<S>                                              <C>           <C>           <C>           <C>           <C>
Basic:
Average common shares outstanding...........           23,642        23,263        23,472        23,557        23,015
Shares used in computing net income (loss)
   per shar ................................           23,642        23,263        23,472        23,557        23,015
                                                 ============  ============  ============  ============  ============
Net income (loss)...........................     $     (2,631) $     20,112  $      2,795  $        164  $     28,211
                                                 ============  ============  ============  ============  ============
Net income (loss) per share.................     $      (0.11) $       0.86  $       0.12  $       0.01  $       1.23
                                                 ============  ============  ============  ============  ============

Diluted:
Average common shares outstanding...........           23,642        23,263        23,472        23,557        23,015
Net effect of dilutive stock options - based
   on the treasury stock method.............               --         2,923         1,654         1,556         2,892
                                                 ------------  ------------  ------------  ------------  ------------
Shares used in computing net income (loss) per
   share....................................           23,642        26,186        25,126        25,113        25,907
                                                 ============  ============  ============  ============  ============
Net income (loss)...........................     $    (2,631)  $     20,112  $      2,795  $        164  $     28,211
                                                 ============  ============  ============  ============  ============
Net income (loss) per share.................     $     (0.11)  $       0.77  $       0.11  $       0.01  $       1.09
                                                 ============  ============  ============  ============  ============
</TABLE>

For the three-month  period ended July 1, 2001, 1.4 million shares issuable upon
the exercise of stock options were not included in the computation because their
inclusion would have been antidilutive.

6.   Comprehensive Income (Loss)

     The components of comprehensive income (loss), net of tax, are as follows:

<TABLE>
<CAPTION>
                                                            Three Months Ended                  Six Months Ended
                                                 ----------------------------------------  --------------------------
                                                    Jul. 1,       Jul. 2,       Apr. 1,      Jul. 1,        Jul. 2,
                                                     2001          2000          2001         2001           2000
                                                 ------------  ------------  ------------  ------------  ------------
<S>                                              <C>           <C>           <C>           <C>           <C>
Net Income/(Loss)...........................     $     (2,631) $     20,112  $      2,795  $        164  $     28,211

Unrealized gain/(loss) on available-for-sale
   securities...............................              179        (5,738)          275           455           777
Less reclassification adjustment for
   (gains)/losses included in net income....               --       (17,189)           --            --       (17,178)
                                                 ------------  ------------  ------------  ------------  ------------
Other Comprehensive Income/(Loss)...........              179       (22,927)          275           455       (16,401)
                                                 ------------  ------------  ------------  ------------  ------------
Total Comprehensive Income/(Loss)...........     $     (2,452) $     (2,815) $      3,070  $        619  $     11,810
                                                 ============  ============  ============  ============  ============
</TABLE>

Accumulated  other  comprehensive  income (loss)  presented in the  accompanying
consolidated condensed balance sheets consists of the accumulated net unrealized
gain (loss) on available-for-sale securities.

7.   Infringement Claims

     On March 29, 2000, Unisys  Corporation  (Unisys) brought suit in the United
States District Court for the Northern District of California, San Jose Division
(Court),  against Actel seeking  monetary  damages and  injunctive  relief.  The
summons and complaint  were served on Actel on April 10, 2000.  Actel and Unisys
orally  agreed to settle the case on April 25,  2001,  and executed a definitive
written settlement agreement on June 29, 2001. The Court dismissed the case with
prejudice on July 13, 2001. The  settlement was immaterial to Actel's  business,
financial condition, and operating results.

     As is typical in the semiconductor industry,  Actel has been and expects to
be notified from time to time of claims that it may be infringing  patents owned
by others.  During the past year, Actel has held discussions regarding potential
patent  infringement  issues.  As it has in the past,  Actel may obtain licenses
under  patents that it is alleged to  infringe.  When  probable  and  reasonably
estimable, Actel has made provision for the estimated settlement costs of claims
for alleged  infringement  prior to the balance sheet date. While Actel believes
that  reasonable  resolution  will occur,  there can be no assurance  that these
claims will be resolved or that the  resolution  of these claims will not have a
materially adverse effect on Actel's business,  financial condition,  or results
of operations.  In addition,  Actel's evaluation of the probable impact of these
pending  disputes  could  change  based upon new  information  learned by Actel.
Subject to the foregoing,  Actel does not believe that any pending  disputes are
likely to have a  materially  adverse  effect on  Actel's  financial  condition,
results  of  operations,  or  liquidity.  The  foregoing  is  a  forward-looking
statement  subject  to all of the risks  and  uncertainties  of  patent  claims,
including  the  discovery  of new  information  and  unpredictability  as to the
outcome of any proceeding.

8.   Recent Accounting Pronouncements

     In July 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards (SFAS) No. 141, "Business Combinations," and SFAS
No.  142,  "Goodwill  and  Other  Intangible  Assets."  These  standards  become
effective  for fiscal years  beginning  after  December  15, 2001.  Beginning in
Actel's  2002  fiscal  year,  the first  quarter  of which  ends  April 7, 2002,
goodwill  will no longer be amortized  but will be subject to annual  impairment
tests.  All other  intangible  assets will  continue to be amortized  over their
estimated  useful  lives.  Actel is  currently  evaluating  the impact  that the
adoption of SFAS 141 and SFAS 142 will have on future  results of  operations or
financial position.


<PAGE>


Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations.

     All forward-looking  statements  contained in this Quarterly Report on Form
10-Q,  including  all  forward-looking  statements  contained  in  any  document
incorporated  herein  by  reference,  are  made  pursuant  to  the  safe  harbor
provisions of the Public Securities Litigation Reform Act of 1995. Words such as
"anticipates,"  "believes,"  "estimates," "expects," intends," "plans," "seeks,"
and  variations of such words and similar  expressions  are intended to identify
the forward-looking  statements. In addition, all forward-looking statements are
based on current  expectations and projections about the semiconductor  industry
and programmable  logic market,  and assumptions made by Actel's management that
reflect its best judgment based on other factors  currently known by management,
but they are not guarantees of future  performance.  Accordingly,  actual events
and  results  may differ  materially  from those  expressed  or  forecast in the
forward-looking  statements  due to the risk  factors  identified  herein or for
other reasons. Actel undertakes no obligation to update any statement, including
any  forward-looking  statement,  contained or incorporated by reference in this
Quarterly Report on Form 10-Q.

Results of Operations

     Net Revenues

     Net revenues were $36.5 million for the second  quarter of 2001, a decrease
of 19% from the first  quarter  of 2001 and of 34% from the  second  quarter  of
2000.  Quarterly  net revenues  declined  sequentially  due to a 17% decrease in
overall  unit  shipments  of field  programmable  gate  arrays  (FPGAs) and a 2%
decrease in the overall  average  selling  price (ASP) of FPGAs.  Quarterly  net
revenues  declined from a year ago due to a 34% decrease in unit shipments and a
1% decrease in ASP.

     Net revenues  were $81.5 million for the first six months of fiscal 2001, a
decrease of 23% from the first six months of fiscal 2000. Six-month net revenues
declined  from a year ago due to a 25%  decrease  in unit  shipments,  which was
offset in part by a 2% increase in ASP.

     Gross Margin

     Gross  margin was 51.8% of net  revenues  for the  second  quarter of 2001,
compared  with  62.5% for the  first  quarter  of 2001 and 62.3% for the  second
quarter of 2000. Gross margin was 57.7% of net revenues for the first six months
of 2001,  compared  with 62.2% of net revenues for the first six months of 2000.
The decline in gross margin was due to higher  inventory  reserves  taken in the
second  quarter  of 2001 as a  result  of  lower  customer  demand  and  reduced
manufacturing and operating efficiencies associated with lower net revenues.

     Actel seeks to improve gross margin by reducing costs. These cost reduction
activities  include  improving wafer yields,  negotiating  price reductions with
suppliers,  increasing  the level and  efficiency  of its testing and  packaging
operations,  achieving  economies of scale by means of higher production levels,
and increasing the number of die produced per wafer by shrinking the die size of
its products.  There can be no assurance  that these efforts will be successful.
The  ability  of Actel to shrink the die size of its FPGAs is  dependent  on the
availability of more advanced manufacturing  processes.  Due to the custom steps
involved in manufacturing  antifuse-based  FPGAs, Actel typically obtains access
to new  manufacturing  processes  later  than  its  competitors  using  standard
manufacturing processes.

     Research and Development (R&D)

     R&D expenditures were $9.1 million, or 25% of net revenues,  for the second
quarter of 2001,  compared  with $9.8 million,  or 22% of net revenues,  for the
first  quarter  of 2001 and $8.9  million,  or 16% of  revenues,  for the second
quarter of 2000.  The  sequential  reduction of $0.7 million in R&D spending was
the result of cost  reduction  activities  undertaken  by Actel in  response  to
declining net revenues.  These cost  reduction  activities  reductions  included
required time off for employees.

     R&D  expenditures  were $18.9  million,  or 23.2% of net revenues,  for the
first six months of 2001, compared with $17.2 million, or 16.2% of net revenues,
for the  first  six  months  of 2000.  R&D  spending  increased  from a year ago
primarily as a result of Actel's acquisitions of Prosys Technology (Prosys),  an
embedded  FPGA  intellectual  property  (IP)  developer,  in  June  2000  and of
GateField Corporation (GateField),  a developer of flash-based FPGA products, in
November 2000.

     During the second quarter,  Actel  announced a new corporate  initiative to
address   interoperability    problems   created   by   the   proliferation   of
high-performance  interface  standards.  Actel plans to increase R&D spending in
support of the  interface  initiative by $8.0 to $10.0 million over the next six
or seven  quarters,  after which R&D  spending as a  percentage  of sales should
return to levels more consistent with Actel's historical experience.

     Selling, General, and Administrative (SG&A)

     SG&A expenses were $10.3  million,  or 28% of net revenues,  for the second
quarter of 2001,  compared with $11.2 million,  or 25% of net revenues,  for the
first quarter of 2001 and $11.8 million, or 21% of net revenues,  for the second
quarter of 2000. SG&A expenses were $21.5 million,  or 26% of net revenues,  for
the first  six  months  of 2001,  compared  with  $23.4  million,  or 22% of net
revenues,  for the first  six  months of fiscal  2000.  SG&A  expenses  declined
primarily as a result of lower selling costs  associated with lower net revenues
and general cost reduction activities.

     Amortization  of Goodwill  and Other  Acquisition-Related  Intangibles  and
Expenses

     Amortization  of goodwill  and other  acquisition-related  intangibles  and
expenses was $3.7  million for the second  quarter of 2001,  compared  with $3.7
million for the first quarter of 2001 and $1.5 million for the second quarter of
2000.  Amortization  of goodwill and other  acquisition-related  intangibles was
$7.5  million for the first six months of 2001,  compared  with $2.6 million for
the first six months of 2000. The quarterly and six-month  increases from a year
ago were due to the effects of the Prosys  acquisition,  which  occurred late in
the second quarter of 2000, and the GateField acquisition, which occurred in the
middle of the fourth quarter of 2000.

     Interest Income and Other (Net)

     Interest income and other (net) were $2.0 million for the second quarter of
2001,  compared with $2.1 million for the first quarter of 2001 and $1.9 for the
second  quarter of 2000.  Interest  income and other (net) were $4.1 million for
the  first six  months of 2001,  compared  with $3.2  million  for the first six
months of 2000.  The  six-month  increase  from a year ago was due  primarily to
increased  cash,  cash  equivalents,  and short-term  investments  available for
investing by Actel,  as well as the  elimination  of losses booked on account of
Actel's equity investments in GateField.

     Tax Provision

     Actel's  effective  rate was 30% for the three  months  ended July 1, 2001,
compared with 30% for the first  quarter of 2001 and 32% for the second  quarter
of 2000. The decrease in the effective rate from a year ago was due primarily to
increased R&D credits and tax-exempt income as a percentage of projected pre-tax
book income.  Actel's  effective rate for the six months ended July 1, 2001, was
30%,  compared with 42% for the first six months of 2000. The effective tax rate
was  higher  a year  ago  due  to a  one-time  gain  on the  sale  of  Chartered
Semiconductor common stock by Actel in the second quarter of 2000. Excluding the
one-time  gain, the rate for the first six months of 2000 was 30%. The effective
tax rates are based on the estimated annual tax rate in compliance with SFAS No.
109, "Accounting for Income Taxes." This rate differs from the federal statutory
rate due primarily to state income taxes (net of federal benefit),  the benefits
of R&D credits and tax exempt income,  and the  recognition of certain  deferred
tax assets subject to valuation allowances as of December 31, 2000.

Liquidity and Capital Resources

     Actel's cash,  cash  equivalents,  and short-term  investments  were $133.9
million at the end of the second  quarter of 2001,  compared with $140.8 million
at the  beginning  of 2001.  The amount of cash and cash  equivalents  decreased
principally because of the growth in inventory.

     During  the first  six  months of 2001,  $4.7  million  of cash was used in
operating activities and $2.9 million of cash was used in investing  activities,
net of $4.1 million provided by net maturities of available-for-sale  securities
that were not re-invested and $4.7 million  purchases of property and equipment.
Financing  activities  provided cash of $4.0 million,  which was generated  from
sales of common stock under employee option and stock purchase plans.

     Actel has a line of credit with a bank that provides for  borrowings not to
exceed $5 million.  The  agreement  contains  covenants  that  require  Actel to
maintain  certain  financial ratios and levels of net worth. As of July 1, 2001,
Actel was in compliance  with the  covenants for the line of credit.  Borrowings
against the line of credit bear interest at the bank's prime rate. There were no
borrowings against the line of credit at July 1, 2001. The line of credit, which
expires in May 2002, may be terminated by either party upon not less than thirty
days' prior written notice.

     Actel  believes  that  existing  cash,  cash  equivalents,  and  short-term
investments,  together with cash from operations, will be sufficient to meet its
cash requirements for the next four quarters. A portion of available cash may be
used for investment in or acquisition of complementary businesses,  products, or
technologies.  Wafer manufacturers are increasingly  demanding financial support
from  customers in the form of equity  investments  and advance  purchase  price
deposits,  which can be substantial.  If Actel requires additional capacity,  it
may be required to incur significant expenditures to secure such capacity.

     Actel believes that the availability of adequate  financial  resources is a
substantial  competitive  factor.  To take  advantage of  opportunities  as they
arise,  or to withstand  adverse  business  conditions  when they occur,  it may
become prudent or necessary for Actel to raise additional capital. Actel intends
to continue monitoring the availability and cost of potential capital resources,
including equity,  debt, and off-balance sheet financing  arrangements,  and may
consider raising additional capital on terms that are acceptable to Actel. There
can be no assurance that additional  capital will become available on acceptable
terms.

Other Factors Affecting Future Operating Results

     Actel's operating results are subject to general economic  conditions and a
variety of risks characteristic of the semiconductor industry (including booking
and shipment  uncertainties,  wafer supply  fluctuations,  and price erosion) or
specific to Actel, any of which could cause Actel's  operating results to differ
materially from past results. For a discussion of such risks, see "Risk Factors"
in Part I of Actel's Annual Report on Form 10-K for 2000,  which is incorporated
herein by this reference.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

     As of July 1, 2001, Actel's  investment  portfolio  consisted  primarily of
corporate bonds, floating rate notes, and federal and municipal obligations. The
principal objectives of Actel's investment activities are to preserve principal,
meet liquidity  needs,  and maximize  yields.  To meet these  objectives,  Actel
invests only in high credit quality debt securities  with average  maturities of
less than two years.  Actel also limits the percentage of total investments that
may be  invested in any one issuer.  Corporate  investments  as a group are also
limited to a maximum percentage of Actel's investment portfolio.

     Actel is exposed to financial market risks,  including  changes in interest
rates,  foreign currency  exchange rates, and marketable equity security prices.
All of the  potential  changes noted below are based upon  sensitivity  analysis
performed on Actel's financial position and expected operating levels at July 1,
2001. Actual results may differ materially.

     Actel's  investments  are  subject to  interest  rate risk.  An increase in
interest  rates  could  subject  Actel to a decline in the  market  value of its
investments.  These  risks are  mitigated  by the ability of Actel to hold these
investments  to maturity.  A  hypothetical  100 basis point increase in interest
rates would  result in a reduction  of  approximately  $1.9  million in the fair
value of Actel's available-for-sale securities held at July 1, 2001.

     Actel purchases a portion of the wafers it uses in production from Japanese
suppliers,  which are  denominated  in Japanese  Yen.  An adverse  change in the
foreign  exchange  rate would  affect the price  Actel pays for a portion of the
wafers used in  production  over the long term.  Actel  attempts to mitigate its
exposure to risks from  foreign  currency  fluctuations  by  purchasing  forward
foreign  exchange  contracts to hedge firm purchase  commitments  denominated in
foreign  currencies.  Forward exchange contracts are short term and do not hedge
purchases that will be made for anticipated  longer-term wafer needs. An adverse
change of 10% in exchange  rates would  result in a reduction  in income  before
taxes of  approximately  $1.5 million based on projected Yen  denominated  wafer
purchases for the next year.

     Actel's  strategic  investments in marketable equity securities are subject
to equity price risks.  Actel  typically does not attempt to reduce or eliminate
market  exposure on these  securities.  Assuming a 10% adverse  change,  Actel's
marketable  strategic equity securities would decrease in value by approximately
$0.6 million, based on the value of the portfolio as of July 1, 2001.

Additional Quarterly Information

     The following table presents certain  unaudited  quarterly results for each
of the eight  quarters  in the  period  ended July 1,  2001.  In the  opinion of
management,  all  necessary  adjustments  (consisting  only of normal  recurring
accruals)  have been included in the amounts  stated below to present fairly the
unaudited   quarterly   results  when  read  in  conjunction  with  the  audited
consolidated financial statements of Actel and notes thereto included in Actel's
Annual Report on Form 10-K for the year ended December 31, 2001. These quarterly
operating  results are not necessarily  indicative of the results for any future
period.



<PAGE>
<TABLE>
<CAPTION>

                                                                              Three Months Ended
                                           --------------------------------------------------------------------------------------
                                            Jul. 1,     Apr. 1,   Dec. 31,    Oct. 1,    Jul. 2,    Apr. 2,    Jan. 2,    Oct. 3,
                                             2001        2001       2000       2000       2000       2000       2000       1999
                                           ========    ========   ========   ========   ========   ========   ========   ========
                                                                   (in thousands, except per share amounts)
<S>                                        <C>         <C>        <C>        <C>        <C>        <C>        <C>        <C>
Statements of Operations Data:
Net revenues ...........................   $ 36,460    $ 45,034   $ 60,129   $ 60,080   $ 55,544   $ 50,666   $ 46,042   $ 43,162
Gross profit ...........................     18,888      28,160     38,060     37,626     34,595     31,458     28,546     26,503
Income (loss) from operations ..........     (4,233)      3,463      7,497     13,648      6,778     10,555      7,175      7,492
Net income (loss) ......................   $ (2,631)   $  2,795   $  3,455   $  9,779   $ 20,112   $  8,099   $  5,823   $  5,668
Net income (loss) per share:
   Basic ...............................   $  (0.11)   $   0.12   $   0.14   $   0.41   $   0.86   $   0.36   $   0.26   $   0.26
                                           ========    ========   ========   ========   ========   ========   ========   ========
   Diluted .............................   $  (0.11)   $   0.11   $   0.13   $   0.36   $   0.77   $   0.32   $   0.24   $   0.25
                                           ========    ========   ========   ========   ========   ========   ========   ========

Shares used in computing net income
  (loss) per share:
   Basic ...............................     23,642      23,472     23,890     23,869     23,263     22,767     22,048     21,748
                                           ========    ========   ========   ========   ========   ========   ========   ========
   Diluted .............................     23,642      25,126     26,107     26,999     26,186     25,467     24,015     23,003
                                           ========    ========   ========   ========   ========   ========   ========   ========
</TABLE>
<TABLE>
<CAPTION>

                                                                              Three Months Ended
                                           --------------------------------------------------------------------------------------
                                            Jul. 1,     Apr. 1,   Dec. 31,    Oct. 1,    Jul. 2,    Apr. 2,    Jan. 2,    Oct. 3,
                                             2001        2001       2000       2000       2000       2000       2000       1999
                                           ========    ========   ========   ========   ========   ========   ========   ========
                                                                   (in thousands, except per share amounts)
<S>                                        <C>         <C>        <C>        <C>        <C>        <C>        <C>        <C>
As a Percentage of Net Revenues:
Net revenues...............................  100.0%      100.0%     100.0%     100.0%     100.0%     100.0%     100.0%     100.0%
Gross profit...............................   51.8        62.5       63.3       62.6       62.3       62.1       62.0       61.4
Income (loss) from operations..............  (11.6)        7.7       12.5       22.7       12.2       20.8       15.6       17.4
Net income (loss) .........................   (7.2)        6.2        5.7       16.3       36.2       16.0       12.6       13.1
</TABLE>

<PAGE>

                          PART II -- OTHER INFORMATION


Item 1. Legal Proceedings

     On March 29, 2000, Unisys  Corporation  (Unisys) brought suit in the United
States District Court for the Northern District of California, San Jose Division
(Court),  against Actel seeking  monetary  damages and  injunctive  relief.  The
summons and complaint  were served on Actel on April 10, 2000.  Actel and Unisys
orally  agreed to settle the case on April 25,  2001,  and executed a definitive
written settlement agreement on June 29, 2001. The Court dismissed the case with
prejudice on July 13, 2001. The  settlement was immaterial to Actel's  business,
financial condition, and operating results.

     Currently,  there are no pending legal  proceedings of a material nature to
which Actel is a party or of which any of its property is the subject. There are
no such legal  proceedings known by Actel to be contemplated by any governmental
authority.

     As is typical in the semiconductor industry,  Actel has been and expects to
be notified from time to time of claims that it may be infringing  patents owned
by others.  During the past year, Actel has held discussions regarding potential
patent  infringement  issues.  As it has in the past,  Actel may obtain licenses
under  patents that it is alleged to  infringe.  When  probable  and  reasonably
estimable, Actel has made provision for the estimated settlement costs of claims
for alleged  infringement  prior to the balance sheet date. While Actel believes
that  reasonable  resolution  will occur,  there can be no assurance  that these
claims will be resolved or that the  resolution  of these claims will not have a
materially adverse effect on Actel's business,  financial condition,  or results
of operations.  In addition,  Actel's evaluation of the probable impact of these
pending  disputes  could  change  based upon new  information  learned by Actel.
Subject to the foregoing,  Actel does not believe that any pending  disputes are
likely to have a  materially  adverse  effect on  Actel's  financial  condition,
results  of  operations,  or  liquidity.  The  foregoing  is  a  forward-looking
statement  subject  to all of the risks  and  uncertainties  of  patent  claims,
including  the  discovery  of new  information  and  unpredictability  as to the
outcome of any proceeding.


<PAGE>


Item 4. Submission of Matters to a Vote of Security Holders

     The Annual  Meeting of  Shareholders  of Actel was held on May 18, 2001. At
the Annual Meeting,  Actel shareholders (i) elected directors to serve until the
next Annual Meeting of Shareholders and until their successors are elected; (ii)
approved  Actel's  1986  Incentive  Stock Option Plan as amended and restated to
prohibit stock option repricings and cancellation/replacement awards that result
in variable award  accounting,  prohibit the granting of any option at less than
fair  market  value,  and extend the term of the Plan until May 2011;  and (iii)
ratified the  appointment of Ernst & Young LLP as Actel's  independent  auditors
for the fiscal year ending January 6, 2002.

     The vote for nominated directors was as follows:

<TABLE>
<CAPTION>
                Nominee                                   For                                 Withheld
-------------------------------------   -------------------------------------   -------------------------------------
<S>                                                   <C>                                     <C>
John C. East.........................                 17,246,221                              2,273,874
James R. Fiebiger....................                 19,394,379                               125,716
Jos C. Henkens.......................                 14,476,592                              5,043,503
Jacob S. Jacobsson...................                 19,394,179                               125,916
Frederic N. Schwettmann..............                 19,394,079                               126,016
Robert G. Spencer....................                 19,394,379                               125,716
</TABLE>

     The vote on approval of Actel's 1986 Incentive Stock Option Plan as amended
and restated was as follows:

<TABLE>
<CAPTION>
                  For                                   Against                                Abstain
-------------------------------------   -------------------------------------   -------------------------------------
<S>           <C>                                      <C>                                     <C>
              15,042,882                               4,456,294                               20,919
</TABLE>

     The vote on  ratification  of the  appointment  of Ernst & Young LLP was as
follows:

<TABLE>
<CAPTION>
                  For                                   Against                                Abstain
-------------------------------------   -------------------------------------   -------------------------------------
<S>           <C>                                       <C>                                     <C>
              19,383,983                                126,230                                 9,882
</TABLE>

<PAGE>


Item 6. Exhibits and Reports on Form 8-K


(a)  Exhibits

    Exhibit Number                                  Description
----------------------   -------------------------------------------------------
        10.1*            Form of Management Continuity Agreement, as amended and
                         restated.

     *This Exhibit is a management contract or compensatory plan or arrangement.

(b)  Reports on Form 8-K

     None.


                                    SIGNATURE

     Pursuant to the  requirements  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.




                                                     ACTEL CORPORATION




     Date: August 13, 2001                         /s/ Henry L. Perret
                                           -------------------------------------
                                                      Henry L. Perret
                                                 Vice President of Finance
                                                and Chief Financial Officer
                                              (as principal financial officer
                                               and on behalf of Registrant)

