
                                  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 October 5, 2003

                                       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.)

       2061 Stierlin Court
     Mountain View, California                               94043-4655
(Address of principal executive offices)                     (Zip Code)

                                 (650) 318-4200
              (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

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).
                               Yes X             No

     Number of shares of Common  Stock  outstanding  as of  November  18,  2003:
25,356,520.



<PAGE>


                         PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements.

                                ACTEL CORPORATION
                   CONSOLIDATED CONDENSED STATEMENTS OF INCOME
               (unaudited, in thousands, except per share amounts)

<TABLE>
<CAPTION>


                                                             Three Months Ended                 Nine Months Ended
                                                   --------------------------------------    ------------------------
                                                     Oct. 5,       Oct. 6,       Jul. 6,       Oct. 5,       Oct. 6,
                                                      2003          2002          2003          2003          2002
                                                   ----------    ----------    ----------    ----------    ----------
<S>                                                <C>           <C>           <C>           <C>           <C>
Net revenues...................................    $   38,405    $   32,912    $   36,609    $  109,355    $  100,265
Costs and expenses:
   Cost of revenues............................        15,086        13,683        14,584        44,399        39,423
   Research and development....................        10,234         9,575         9,851        29,598        29,214
   Selling, general, and administrative........        10,457        10,560        11,070        32,559        32,307
   Amortization of acquisition-related
     intangibles...............................           663           681           663         2,007         2,043
                                                   ----------    ----------    ----------    ----------    ----------
         Total costs and expenses..............        36,440        34,499        36,168       108,563       102,987
                                                   ----------    ----------    ----------    ----------    ----------
Income (loss) from operations..................         1,965        (1,587)          441           792        (2,722)
Interest income and other, net of expense......           754         1,371           724         2,470         4,672
Gain (loss) on sales and write-downs of
   equity investments..........................             -             -            91            91        (1,133)
                                                   ----------    ----------    ----------    ----------    ----------

Income (loss) before tax (benefit) provision...         2,719          (216)        1,256         3,353           817
Tax (benefit) provision........................           436        (1,323)         (130)         (547)       (1,089)
                                                   ----------    ----------    ----------    ----------    ----------
Net income.....................................    $    2,283    $    1,107    $    1,386    $    3,900    $    1,906
                                                   ==========    ==========    ==========    ==========    ==========
Net income per share:
   Basic.......................................    $     0.09    $     0.05    $     0.06    $     0.16    $     0.08
                                                   ==========    ==========    ==========    ==========    ==========
   Diluted.....................................    $     0.08    $     0.04    $     0.05    $     0.15    $     0.08
                                                   ==========    ==========    ==========    ==========    ==========
Shares used in computing net income per share:
   Basic.......................................        25,005        24,531        24,550        24,631        24,361
                                                   ==========    ==========    ==========    ==========    ==========
   Diluted.....................................        27,101        24,959        25,776        25,974        25,399
                                                   ==========    ==========    ==========    ==========    ==========

</TABLE>







       See Notes to Unaudited Consolidated Condensed Financial Statements

<PAGE>


                                ACTEL CORPORATION
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                                               Oct.5,        Jan.5,
                                                                                                2003         2003*
                                                                                            -----------    ----------
                                                                                            (unaudited)
                                                       ASSETS
Current assets:
<S>                                                                                          <C>           <C>
   Cash and cash equivalents...........................................................      $   15,526    $   18,207
   Short-term investments..............................................................         133,579       115,622
   Accounts receivable, net............................................................          14,819        17,615
   Inventories, net....................................................................          33,318        34,591
   Deferred income taxes...............................................................          23,654        28,054
   Prepaid expenses and other current assets...........................................           4,895         4,968
                                                                                             ----------    ----------
         Total current assets..........................................................         225,791       219,057
Property and equipment, net............................................................          18,188        16,204
Goodwill, net..........................................................................          32,142        32,142
Other assets, net......................................................................          25,443        25,918
                                                                                             ----------    ----------
                                                                                             $  301,564    $  293,321
                                                                                             ==========    ==========

                                        LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable....................................................................      $    8,316    $   11,500
   Accrued salaries and employee benefits..............................................           5,072         7,280
   Other accrued liabilities...........................................................           3,515         3,879
   Deferred income on shipments to distributors........................................          21,526        26,459
                                                                                             ----------    ----------
         Total current liabilities.....................................................          38,429        49,118
Deferred compensation plan liability...................................................           2,433         1,889
Deferred rent liability................................................................             625             -
                                                                                             ----------    ----------
         Total liabilities.............................................................          41,487        51,007
Commitments and contingencies
Shareholders' equity:
   Common stock........................................................................              25            24
   Additional paid-in capital..........................................................         182,426       168,428
   Retained earnings ..................................................................          77,190        73,290
   Unearned compensation cost .........................................................             (78)         (179)
   Accumulated other comprehensive income .............................................             514           751
                                                                                             ----------    ----------
         Total shareholders' equity....................................................         260,077       242,314
                                                                                             ----------    ----------
                                                                                             $  301,564    $  293,321
                                                                                             ==========    ==========
</TABLE>

*    Derived from the consolidated audited financial statements included in our
     report on Form 10-K for the fiscal year ended January 5, 2003.



       See Notes to Unaudited Consolidated Condensed Financial Statements

<PAGE>


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

<TABLE>
<CAPTION>
                                                                                                Nine Months Ended
                                                                                             ------------------------
                                                                                               Oct. 5,       Oct. 6,
                                                                                                2003          2002
                                                                                             ----------    ----------
Operating activities:
<S>                                                                                          <C>           <C>
    Net income.........................................................................      $    3,900    $    1,906
    Adjustments to reconcile net income to net cash provided by  operating activities:
       Depreciation and amortization...................................................           7,594         7,520
       Amortization of deferred compensation...........................................             101           101
       Changes in operating assets and liabilities:
          Accounts receivable..........................................................           2,796        (2,908)
          Inventories..................................................................           1,273           882
          Income tax receivable........................................................           4,944           129
          Prepaid expenses and other current assets....................................            (519)         (540)
          Accounts payable, accrued salaries and employee benefits, and other accrued
              liabilities..............................................................          (5,977)       (4,933)
          Deferred income on shipments to distributors.................................          (4,933)          185
                                                                                             ----------    ----------
    Net cash provided by operating activities..........................................           9,179         2,342
Investing activities:
    Purchases of property and equipment................................................          (7,571)       (6,286)
    Purchases of available-for-sale securities.........................................        (126,789)     (128,899)
    Sales and maturities of available for sale securities..............................         108,438       129,203
    Changes in other long term assets..................................................              64           606
                                                                                             ----------    ----------
    Net cash used in investing activities..............................................         (25,858)       (5,376)
Financing activities:
    Repurchases of common stock........................................................               -        (3,334)
    Issuance of common stock issuance under employee stock plans.......................          13,998         7,036
                                                                                             ----------    ----------
    Net cash provided by financing activities..........................................          13,998         3,702
Net increase (decrease) in cash and cash equivalents...................................          (2,681)          668
                                                                                             ----------    ----------
Cash and cash equivalents, beginning of period.........................................          18,207         7,912
                                                                                             ----------    ----------
Cash and cash equivalents, end of period...............................................      $   15,526    $    8,580
                                                                                             ==========    ==========
Supplemental disclosures of cash flow information and non-cash investing and
    financing activities:
Cash received during the period for taxes, net.........................................      $    4,622    $      275
</TABLE>







       See Notes to Unaudited Consolidated Condensed Financial Statements

<PAGE>


                                ACTEL CORPORATION

         NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


1.   Basis of Presentation and Summary of Significant Accounting Policies

     The accompanying  unaudited  consolidated condensed financial statements of
Actel  Corporation  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.

     Actel  Corporation  and its  consolidated  subsidiaries  are referred to as
"we,"  "us,"  or  "our."  Management's  Discussion  and  Analysis  of  Financial
Condition and Results of  Operations  is based upon our  unaudited  consolidated
condensed  financial  statements,  which have been prepared in  accordance  with
accounting principles for interim financial statements 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, liabilities,
revenues,  and  expenses and the related  disclosure  of  contingent  assets and
liabilities.  The United States  Securities  and Exchange  Commission  (SEC) has
defined the most critical  accounting  policies as those that are most important
to the  portrayal of an issuer's  financial  condition and results of operations
and require  management  to make the most  difficult and  subjective  judgments,
often as a result of the need to make  estimates on matters that are  inherently
uncertain.  Based upon this  definition,  our most critical  policies  currently
include:  inventories;  intangible  assets;  goodwill;  income taxes;  and legal
matters.  We base our  estimates on historical  experience  and on various other
assumptions that we believe are reasonable under the circumstances,  the results
of which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results
may differ  materially from these  estimates.  We also have other key accounting
policies,  such as policies for revenue  recognition  and  accounts  receivable.
These other  policies  either do not generally  require us to make estimates and
judgments that are as difficult or as  subjective,  or are less likely to have a
material impact on our financial  condition or results of operations for a given
period. For further information  regarding all of these policies, as well as the
estimates  and  judgments  involved,  see our Annual Report on Form 10-K for the
year ended January 5, 2003 (2002 Form 10-K).

     We have  updated our  critical  accounting  policy  related to  inventories
during the quarter  ended  October 5, 2003.  During the third  quarter of fiscal
year 2003 we modified inventory  valuation policies to properly account for last
time buy type inventory  purchases.  During the third quarter of 2003, we made a
last  time  buy  of  certain  inventory  from  one of our  wafer  suppliers  for
approximately $1.0 million.  We plan to make additional last time buys from this
and another wafer supplier in the fourth  quarter of 2003.  These last time buys
are being made because these wafer  suppliers are shutting down the  fabrication
facilities   used  to  produce   these   products   (migrating  to  more  modern
manufacturing  processes)  and we would not have  enough  product to continue to
support our customers for the foreseeable  future without making large last time
buys from  these  suppliers.  As this  inventory  was not  acquired  to meet the
current  demand,  we did not believe the  application  of our current  inventory
write  down  policy  was  appropriate,  and a  discrete  write  down  policy was
established for inventory purchased in last time buy transactions.  These unique
transactions and the related inventory are excluded from the standard excess and
obsolescence  write  down  policy  that is  discussed  in our  2002  Form  10-K.
Inventory  purchased  in last  time buy  transactions  will be  evaluated  on an
ongoing basis for indications of excess or obsolescence based on rates of actual
sell  through;  expected  future  demand  for  those  products;  and  any  other
qualitative  factors  that may  indicate  the  existence  of excess or  obsolete
inventory.

     Beginning in the second  quarter of 2003, we no longer  consider our policy
related  to  impairment  of  investments  in other  companies  to be a  critical
accounting policy because our investments in other companies are not material.


<PAGE>


                                ACTEL CORPORATION

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     No other  significant  changes to  critical  accounting  policies or to the
related  estimates and judgments  involved in applying  these policies have been
made since January 4, 2003.

     The  unaudited  consolidated  condensed  financial  statements  include our
accounts  and the  accounts of our wholly owned  subsidiaries.  All  significant
intercompany  accounts and transactions  have been eliminated on  consolidation.
The interim financial  statements should be read in conjunction with the audited
financial  statements  included in our 2002 Form 10-K. The results of operations
for the  quarter or nine  months  ended  October 5,  2003,  are not  necessarily
indicative  of results  that may be expected for the entire  fiscal year,  which
ends January 4, 2004.

     Stock Based Compensation

     In December 2002, the Financial  Accounting  Standards  Board (FASB) issued
Statement of Financial  Accounting  Standards  (SFAS) No. 148,  "Accounting  for
Stock-Based  Compensation  -  Transition  and  Disclosure  an  Amendment of FASB
Statement No. 123." SFAS No. 148 provides  alternative methods of transition for
companies  making  a  voluntary  change  to  fair  value-based   accounting  for
stock-based employee  compensation.  We continue to account for our stock option
plans under the  intrinsic  value  recognition  and  measurement  principles  of
Accounting  Principles Board (APB) Opinion No. 25,  "Accounting for Stock Issued
to Employees," and related FASB  Interpretations  (FINs).  Effective for interim
periods beginning after December 15, 2002, SFAS No. 148 also requires disclosure
of pro-forma results on a quarterly basis as if the company had applied the fair
value recognition provisions of SFAS No. 123.

     As the exercise  price of all options  granted under our stock option plans
was equal to the market price of the underlying  common stock on the grant date,
no  stock-based  employee  compensation  cost,  other  than  acquisition-related
compensation,  is recognized in net income.  The following table illustrates the
effect on net income and  earnings  per share if we had  applied  the fair value
recognition provisions of SFAS No. 123, as amended, to options granted under our
stock  option  plans and  Employee  Stock  Purchase  Plan.  For purposes of this
pro-forma disclosure, the estimated value of the options is amortized ratably to
expense  over the  options'  vesting  periods.  Because the  estimated  value is
determined as of the date of grant, the actual value ultimately  realized by the
employee may be significantly different.


<PAGE>





                                ACTEL CORPORATION

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     The  pro forma information is as follows:
<TABLE>
<CAPTION>

                                                            Three Months Ended                 Nine Months Ended
                                                   --------------------------------------    ------------------------
                                                     Oct. 5,       Oct. 6,       Jul. 6,       Oct. 5,       Oct. 6,
                                                      2003          2002          2003          2003          2002
                                                   ----------    ----------    ----------    ----------    ----------
                                                          (unaudited, in thousands except per share amounts)
Reported amounts under intrinsic value method:
Stock based employee compensation cost,
<S>                                                <C>           <C>           <C>           <C>           <C>
   net of related tax, included in net income.     $       34    $       34    $       33    $      101    $      101
Net income....................................     $    2,283    $    1,107    $    1,386    $    3,900    $    1,906
Earnings per share:
   Basic......................................     $     0.09    $     0.05    $     0.06    $     0.16    $     0.08
   Diluted....................................     $     0.08    $     0.04    $     0.05    $     0.15    $     0.08

Pro Forma amounts under fair value method:
Pro Forma stock based employee compensation
   cost, net of related tax...................     $    2,017    $    4,747    $    3,466    $    9,062    $   13,142
Pro forma net income (loss)...................     $      266    $   (3,640)   $   (2,080)   $   (5,162)   $  (11,236)
Pro forma earnings per share:
   Basic......................................     $     0.01    $    (0.15)   $    (0.08)   $    (0.21)   $    (0.46)
   Diluted....................................     $     0.01    $    (0.15)   $    (0.08)   $    (0.21)   $    (0.46)
</TABLE>



     The pro forma  information  for the  quarter  ended July 6, 2003,  has been
adjusted  to reflect  the  correction  of  previously  calculated  pro forma tax
benefits  from non  qualified  stock  options  and pro forma  compensation  cost
related to our employee stock purchase  plan.  The  adjustments  resulted in pro
forma net loss for the quarter of $(0.08) per basic and diluted share,  compared
with the previously reported pro forma net loss of $(0.11) per basic and diluted
share.  Applying the  corrections to the amounts  previously  calculated for the
2001 and 2002 fiscal  years,  pro forma net loss was reduced by $2.9 million for
2001 and by $1.9 million for 2002. This results in pro forma net loss of $(0.71)
per basic and diluted share for 2001 and $(0.72) per basic and diluted share for
2002.  The  previously  reported  pro forma net loss was  $(0.83)  per basic and
diluted  share for 2001 and $(0.80) per basic and  diluted  share for 2002.  The
corrections  are limited to footnote  disclosure  under SFAS Nos. 123 and 148 of
non-cash pro forma compensation  expense and do not change or have any impact on
our historically reported statements of income, balance sheets, or statements of
cash flows.

     SFAS No.  123  requires  the use of  option  pricing  models  that were not
developed  for  use  in  valuing  employee  stock  options.   The  Black-Scholes
option-pricing  model was  developed  for use in  estimating  the fair  value of
short-lived  exchange traded options that have no vesting  restrictions  and are
fully  transferable.  In addition,  option-pricing  models  require the input of
highly  subjective  assumptions,  including  the option's  expected life and the
price  volatility of the  underlying  stock.  Because our employee stock options
have characteristics  significantly  different from those of traded options, and
because changes in the subjective  input  assumptions can materially  affect the
fair value  estimate,  in our opinion  the  existing  models do not  necessarily
provide a reliable single measure of the fair value of employee stock options.

<PAGE>


                                ACTEL CORPORATION

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.   Impact of Recently Issued Accounting Standards

     In January 2003, the Financial Accounting Standards Board (FASB) issued FIN
No. 46,  "Consolidation  of Variable  Interest  Entities," an  interpretation of
Accounting Research Bulletin (ARB) No. 51, "Consolidated  Financial Statements."
FIN No. 46  establishes  accounting  guidance  for  consolidation  of a variable
interest  entity (VIE). A VIE is an entity in which the voting equity  investors
do not have a controlling  financial interest,  or the equity investment at risk
is insufficient to finance the entity's activities without receiving  additional
subordinated financial support from the other parties. FIN No. 46 applies to any
business enterprise,  either public or private, that has a controlling interest,
contractual relationship,  or other business relationship with a VIE. FIN No. 46
provides  guidance  for  determining  when an entity,  the Primary  Beneficiary,
should  consolidate  another  entity,  a  VIE  that  functions  to  support  the
activities of the Primary  Beneficiary.  For arrangements entered into with VIEs
created  prior to January 31, 2003,  the  provisions  of FIN 46 were  originally
effective as of the  beginning of the three  months  ended  September  27, 2003,
however,  the FASB  subsequently  delayed the effective  date of this  provision
until the first  interim or annual period  ending after  December 15, 2003.  The
provisions of FIN 46 were effective  immediately  for all  arrangements  entered
into with new VIEs created  after  January 31,  2003.  We believe that we do not
currently have any contractual  relationship or other business relationship with
a VIE entered into after  January 31, 2003 and therefore the adoption of FIN No.
46 will not have any effect on our consolidated financial position or results of
operations when fully adopted.

     In May,  2003,  the FASB  issued  SFAS No.  150,  "Accounting  for  Certain
Financial Instruments with Characteristics of both Liabilities and Equity". SFAS
No. 150  requires  that  certain  financial  instruments  which  under  previous
guidance were accounted for as equity, must now be accounted for as liabilities.
The financial  instruments  affected include mandatory redeemable stock, certain
financial instruments that require or may require the issuer to buy back some of
its shares in exchange for cash or other assets and certain obligations that can
be settled  with shares of stock.  SFAS No. 150 is effective  for all  financial
instruments  entered  into or modified  after May 31,  2003,  and  otherwise  is
effective at the beginning of the first interim period  beginning after June 15,
2003. We believe that we do not currently  have any financial  instruments  that
would be subject to the provisions of SFAS No. 150 and therefore the adoption of
SFAS No. 150 will not have any effect on our consolidated  financial position or
results of operations.

3.   Goodwill and Other Acquisition-Related Intangibles

     During 1999 and 2000, we completed the acquisitions of AutoGate Logic, Inc.
(AGL), Prosys Technology, Inc., and GateField Corporation (GateField), resulting
in a significant amount of goodwill and identified intangible assets. At October
5 and January 5, 2003, we had $32.1 million of net goodwill. At the beginning of
2002, we adopted SFAS No. 142,  "Goodwill and Other  Intangible  Assets,"  which
addresses the  financial  accounting  and  reporting  standards for goodwill and
other intangible assets subsequent to their acquisition.  This standard requires
that  goodwill  no longer be  amortized,  and  instead be tested for  impairment
annually  or more  frequently  if certain  events or  changes  in  circumstances
indicate that the carrying value may not be recoverable. We completed our annual
goodwill  impairments tests as of January 5, 2003, and noted no impairment.  Our
next annual  impairment test will be performed in the fourth quarter of 2003. No
indicators  of  impairment  were present  during the three and nine months ended
October 5, 2003.


<PAGE>


                                ACTEL CORPORATION

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     At October 5, 2003, we have definite lived intangible assets arising
from our acquisitions of AGL, Prosys Technology, Inc., and GateField with a net
book value of $5.2 million, which are being amortized on a straight line basis
over their estimated lives. In accordance with SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," we recognize impairment losses on
long-lived assets when indicators of impairment are present and the undiscounted
cash flows estimated to be generated by those assets are less than the net book
value of those assets. The impairment loss, if any, is measured by comparing the
fair value of the asset to its carrying value. Fair value is based on discounted
cash flows using present value techniques identified in SFAS No. 144. No
indicators of impairment were present during the three months ended October 5,
2003.

     We made no  acquisitions  of intangible  assets during the third quarter of
2003.  Identified  intangible  assets as of October 5,  2003,  consisted  of the
following:
<TABLE>
<CAPTION>

                                                                                 Gross        Accumulated
                                                                                 Assets      Amortization        Net
                                                                               -----------   -------------   -----------
                                                                                      (unaudited, in thousands)
<S>                                                                             <C>           <C>            <C>
Acquisition-related developed technology................................        $   11,454    $     (6,970)  $     4,484
Other acquisition-related intangibles...................................             2,600          (1,931)          669
Acquired patents........................................................               516            (432)           84
                                                                               -----------    ------------   -----------
         Total identified intangible assets.............................        $   14,570    $     (9,333)  $     5,237
                                                                               ===========    ============   ===========
</TABLE>

Identified intangible assets as of January 5, 2003, consisted of the following:
<TABLE>
<CAPTION>

                                                                                 Gross        Accumulated
                                                                                 Assets      Amortization        Net
                                                                               -----------   -------------   -----------
                                                                                      (unaudited, in thousands)
<S>                                                                            <C>           <C>             <C>
Acquisition-related developed technology................................       $    11,454   $      (5,253)  $    6,201
Other acquisition-related intangibles...................................             2,600          (1,681)         919
Acquired patents........................................................               516            (392)         124
                                                                               -----------    ------------   -----------
         Total identified intangible assets.............................       $    14,570    $     (7,326)  $    7,244
                                                                               ===========    ============   ===========
</TABLE>

         All of our identified intangible assets are subject to amortization.
Amortization of identified intangibles included the following:

<TABLE>
<CAPTION>

                                                             Three Months Ended                 Nine Months Ended
                                                   --------------------------------------    ------------------------
                                                     Oct. 5,       Oct. 6,       Jul. 6,       Oct. 5,       Oct. 6,
                                                      2003          2002          2003          2003          2002
                                                   ----------    ----------    ----------    ----------    ----------
                                                                      (unaudited, in thousands)
<S>                                                <C>           <C>           <C>           <C>           <C>
Acquisition-related developed technology....       $      573    $      572    $      573    $    1,717    $    1,716
Other acquisition-related intangibles.......               83            83            83           250           249
Acquired patents............................                7            26             7            40            78
                                                   ----------    ----------    ----------    ----------    ----------
         Total amortization expense.........       $      663    $      681    $      663    $    2,007    $    2,043
                                                   ==========    ==========    ==========    ==========    ==========
</TABLE>

Based on the carrying value of identified  intangible assets recorded at October
5, 2003,  and assuming no  subsequent  impairment  of the  underlying  assets or
acquisition  of other  identified  intangible  assets,  the annual  amortization
expense is expected to be $2.7  million for 2003,  $2.7  million for 2004,  $1.9
million for 2005, and none thereafter.



<PAGE>


                                ACTEL CORPORATION

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)


4.   Inventories

     Inventories consist of the following:


<TABLE>
<CAPTION>

                                                                                              Oct. 5,       Jan. 5,
                                                                                               2003          2003
                                                                                             ----------    ----------
                                                                                                 (in thousands)
Inventories:                                                                                 (unaudited)
<S>                                                                                          <C>           <C>
   Purchased parts and raw materials...................................................      $    4,319    $    4,066
   Work-in-process.....................................................................          24,681        26,484
   Finished goods......................................................................           4,318         4,041
                                                                                             ----------    ----------
                                                                                             $   33,318    $   34,591
                                                                                             ==========    ==========
</TABLE>

Inventory is stated at the lower of cost  (first-in,  first-out)  or market (net
realizable  value). We believe that a certain level of inventory must be carried
to maintain an adequate  supply of product for customers.  This inventory  level
may vary based upon orders  received  from  customers  or internal  forecasts of
demand for  products.  Other  considerations  in  determining  inventory  levels
include the stage of products in the product  life cycle,  design win  activity,
manufacturing  lead  times,  customer  demand,   strategic   relationships  with
foundries,  "last time buy" inventory purchases,  and competitive  situations in
the  marketplace.  Should  any  of  these  factors  have  a  result  other  than
anticipated, inventory levels and gross margins may be adversely affected.


We write down our inventory for estimated obsolescence or unmarketable inventory
equal  to the  difference  between  the  cost of  inventory  and  the  estimated
realizable  value  based  upon  assumptions   about  future  demand  and  market
conditions. To address this difficult, subjective, and complex area of judgment,
we apply a methodology that includes  assumptions and estimates to arrive at the
net realizable value.  First, we identify any inventory that has been previously
reserved  in  prior  periods.   This  inventory  remains  reserved  until  sold,
destroyed, or otherwise  dispositioned.  Second, our quality assurance personnel
examine  inventory  line  items that may have some form of  obsolescence  due to
non-conformance  with electrical or mechanical  standards.  Third, we assess the
inventory not otherwise  identified to be reserved  against  product history and
forecasted  demand,   typically  nine  months.   Finally,  the  result  of  this
methodology  is analyzed by us in light of the  product  life cycle,  design win
activity, and competitive situations in the marketplace to derive an outlook for
consumption of the inventory and the  appropriateness of the resulting inventory
levels.  If actual future demand or market  conditions  are less  favorable than
those we have projected, additional inventory write-downs may be required.






<PAGE>



                                ACTEL CORPORATION

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)


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                 Nine Months Ended
                                                   --------------------------------------    ------------------------
                                                     Oct. 5,       Oct. 6,       Jul. 6,       Oct. 5,       Oct. 6,
                                                      2003          2002          2003          2003          2002
                                                   ----------    ----------    ----------    ----------    ----------
                                                          (unaudited, in thousands except per share amounts)
Basic:
<S>                                                    <C>           <C>           <C>           <C>           <C>
Average common shares outstanding...........           25,005        24,531        24,550        24,631        24,361
Shares used in computing net income per
 share......................................           25,005        24,531        24,550        24,631        24,361
                                                   ==========    ==========    ==========    ==========    ==========
Net income..................................       $    2,283    $    1,107    $    1,386    $    3,900    $    1,906
                                                   ==========    ==========    ==========    ==========    ==========
Net income per share........................       $     0.09    $     0.05    $     0.06    $     0.16    $     0.08
                                                   ==========    ==========    ==========    ==========    ==========
Diluted:
Average common shares outstanding...........           25,005        24,531        24,550        24,631        24,361
Net effect of dilutive stock options - based
   on the treasury stock method.............            2,096           428         1,226         1,343         1,038
                                                   ----------    ----------    ----------    ----------    ----------
Shares used in computing net income per
 share......................................           27,101        24,959        25,776        25,974        25,399
                                                   ==========    ==========    ==========    ==========    ==========
Net income..................................       $    2,283    $    1,107    $    1,386    $    3,900    $    1,906
                                                   ==========    ==========    ==========    ==========    ==========
Net income per share........................       $     0.08    $     0.04    $     0.05    $     0.15    $     0.08
                                                   ==========    ==========    ==========    ==========    ==========
</TABLE>

<PAGE>


                                ACTEL CORPORATION

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)


6.   Comprehensive Income (Loss)

     The components of comprehensive income (loss), net of tax, are as follows:
<TABLE>
<CAPTION>

                                                            Three Months Ended                 Nine Months Ended
                                                   --------------------------------------    ------------------------
                                                     Oct. 5,       Oct. 6,       Jul. 6,       Oct. 5,       Oct. 6,
                                                      2003          2002          2003          2003          2002
                                                   ----------    ----------    ----------    ----------    ----------
                                                                      (unaudited, in thousands)
<S>                                                <C>           <C>           <C>           <C>           <C>
Net income..................................       $    2,283    $    1,107    $    1,386    $    3,900    $    1,906

Change in unrealized gain (loss) on
   available-for-sale securities............             (109)           71           173           143            48
Less reclassification adjustment for gains
   included in net income (loss) due to sales
   of available-for-sale securities.........              (48)         (229)         (165)         (380)         (242)
                                                   ----------    ----------    ----------    ----------    ----------
Other comprehensive income (loss)...........             (157)         (158)            8          (237)         (194)
                                                   ----------    ----------    ----------    ----------    ----------
Total comprehensive income..................       $    2,126    $      949    $    1,394    $    3,663    $    1,712
                                                   ==========    ==========    ==========    ==========    ==========
</TABLE>

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


7.   Income Taxes

     We account for income taxes in  accordance  with SFAS No. 109,  "Accounting
for Income  Taxes," which  requires that deferred tax assets and  liabilities be
recognized  using  enacted  tax rates for the  effect of  temporary  differences
between the book and tax bases of recorded assets and liabilities.  SFAS No. 109
also requires that deferred tax assets be reduced by a valuation allowance if it
is more likely than not that some or all of the  deferred tax assets will not be
realized.  We evaluate  annually the realizability of our deferred tax assets by
assessing our  valuation  allowance  and, if necessary,  we adjust the amount of
such allowance. The factors used to assess the likelihood of realization are our
forecast of future  taxable  income and available tax planning  strategies  that
could be  implemented  to realize the net deferred tax assets.  Factors that may
affect our ability to achieve sufficient  forecasted taxable income include, but
are not limited to, increased  competition,  a decline in sales or margins, loss
of market share, delays in product availability, and technological obsolescence.

     At October 5, 2003,  we had a net deferred tax asset of $39.0 million after
consideration of deferred tax liabilities and a valuation allowance. In order to
fully  utilize the $39.0 million of deferred tax assets,  taxable  income in the
amount of  approximately  $130  million  must be earned in future  periods.  For
proper valuation of deferred tax assets under SFAS No. 109, significant negative
evidence is considered to exist regarding a company's ability to generate future
taxable  income when the company has incurred a three-year  cumulative  loss. We
have incurred a cumulative operating loss for the past two fiscal years, but are
currently  profitable for 2003 through the nine months ended October 5, 2003. At
October  5,  2003,  we  believe  the  deferred  tax  asset  is  realizable   and
appropriately stated. We will complete our formal realizability  analysis during
the fourth  quarter of 2003.  The results of this  analysis  could result in the
need to record  additional  valuation  allowance,  which  would  have an adverse
impact on our consolidated financial position or results of operations.


<PAGE>


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

     Actel  Corporation  and its  consolidated  subsidiaries  are referred to as
"we," "us," or "our." You should read the  information in this Quarterly  Report
on Form 10-Q with the Risk Factors at the end of Part I of our Annual  Report on
Form 10-K for the year ended January 5, 2003 (2002 Form 10-K).  Unless otherwise
indicated,  the information in this Quarterly Report is given as of November 19,
2003, and we undertake no obligation to update any of the information, including
forward-looking  statements.  All forward-looking  statements are made under the
safe harbor provisions of the Private Securities  Litigation Reform Act of 1995.
{Bracketed  statements} and statements  containing 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.  The Risk  Factors  could cause  actual  results to
differ materially from those projected in the forward-looking statements.

Critical Accounting Policies

     The United States Securities and Exchange  Commission (SEC) has defined the
most  critical  accounting  policies  as those  that are most  important  to the
portrayal  of an issuer's  financial  condition  and results of  operations  and
require management to make the most difficult and subjective judgments, often as
a result of the need to make estimates on matters that are inherently uncertain.
Based  upon this  definition,  our most  critical  policies  currently  include:
inventories;  intangible assets;  goodwill;  income taxes; and legal matters. We
base our estimates on  historical  experience  and on various other  assumptions
that we believe are  reasonable  under the  circumstances,  the results of which
form the basis for  making  judgments  about the  carrying  values of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ  materially  from  these  estimates.  We also have  other key  accounting
policies,  such as policies for revenue  recognition  and  accounts  receivable.
These other  policies  either do not generally  require us to make estimates and
judgments that are as difficult or as  subjective,  or are less likely to have a
material impact on our financial  condition or results of operations for a given
period. For further information  regarding all of these policies, as well as the
estimates  and  judgments  involved,  see our Annual Report on Form 10-K for the
year ended January 5, 2003 (2002 Form 10-K).

     We have  updated our  critical  accounting  policy  related to  inventories
during the quarter  ended  October 5, 2003.  During the third  quarter of fiscal
year 2003 we modified inventory  valuation policies to properly account for last
time buy type inventory  purchases.  During the third quarter of 2003, we made a
last  time  buy  of  certain  inventory  from  one of our  wafer  suppliers  for
approximately $1.0 million.  We plan to make additional last time buys from this
and another wafer supplier in the fourth  quarter of 2003.  These last time buys
are being made because these wafer  suppliers are shutting down the  fabrication
facilities   used  to  produce   these   products   (migrating  to  more  modern
manufacturing  processes)  and we would not have  enough  product to continue to
support our customers for the foreseeable  future without making large last time
buys from  these  suppliers.  As this  inventory  was not  acquired  to meet the
current  demand,  we did not believe the  application  of our current  inventory
write  down  policy  was  appropriate,  and a  discrete  write  down  policy was
established for inventory purchased in last time buy transactions.  These unique
transactions and the related inventory are excluded from the standard excess and
obsolescence  write  down  policy  that is  discussed  in our  2002  Form  10-K.
Inventory  purchased  in last  time buy  transactions  will be  evaluated  on an
ongoing basis for indications of excess or obsolescence based on rates of actual
sell  through;  expected  future  demand  for  those  products;  and  any  other
qualitative  factors  that may  indicate  the  existence  of excess or  obsolete
inventory.

     During  the  second  quarter of 2003,  we  removed  the  policy  related to
impairment of investments in other companies from critical  accounting  policies
because our remaining investments in other companies are not material.

     No other  significant  changes to  critical  accounting  policies or to the
related  estimates and judgments  involved in applying  these policies have been
made since January 4, 2003.

Results of Operations

     Net Revenues

     Net  revenues  were  $38.4  million  for the third  quarter  of 2003,  a 5%
increase  from the  second  quarter  of 2003 and a 17%  increase  from the third
quarter of 2002.  Quarterly net revenues  increased  sequentially  due to an 11%
increase in the overall average selling price (ASP) of field  programmable  gate
arrays (FPGAs), which was partially offset by a 6% decrease in unit shipments of
FPGAs. Quarterly net revenues increased from a year ago due to a 25% increase in
unit shipments, which was partially offset by a 7% decrease in overall ASP. Unit
volumes and ASP levels  fluctuate  principally  because of changes in the mix of
products sold. Our product portfolio includes products ranging from devices with
lower ASPs, which typically sell in higher volumes, to devices with higher ASPs,
which  typically sell in lower volumes.  The sequential  increase in overall ASP
was driven  primarily by increased sales of  radiation-tolerant  (Rad) products,
which have higher  ASPs.  The increase in units sold and decrease in overall ASP
compared with the third quarter of 2002  reflects  increased  sales of our newer
product  families,  which as a group ship in higher  volumes and have lower ASPs
than our older products.

     Net revenues were $109.4  million for the first nine months of fiscal 2003,
an  increase  of 9% from the first nine months of fiscal  2002.  Nine-month  net
revenues increased due to a 10% increase in unit shipments,  which was partially
offset by a 1% decrease in overall  ASP.  The  increase  in unit  shipments  was
driven  primarily by increased sales of our commercial  products,  which are our
products not marketed as radiation-tolerant.

     Gross Margin

     Gross  margin  was  60.7% of net  revenues  for the third  quarter  of 2003
compared  with  60.2%  for the  second  quarter  of 2003 and 58.4% for the third
quarter  of 2002.  Gross  margin  for the third  quarter  of 2003 was  favorably
affected by the  sell-through  of $0.9 million of inventory that was reserved in
previous  periods,  and  unfavorably  affected by a specific  write down of $1.7
million that was  established  for inventory  identified  as slow moving.  Gross
margin  increased  from the  third  quarter  of 2002  principally  due to better
utilization  of our test floor and  favorable  absorption  of labor and overhead
costs arising from the 17% increase in revenue.

     Gross  margin was 59.4% of net  revenues  for the first nine months of 2003
compared  with 60.7% for the first nine months of 2002.  Gross  margin was lower
principally  because of increased sales of new products,  which on average carry
lower margins than more mature products.  Typically, new products are introduced
at competitive  selling  prices and the margins on those products  increase over
time as costs are reduced.  This impact was partially  offset by higher revenues
in 2003,  which  resulted in better  utilization of our test floor and favorable
absorption of labor and overhead costs.

     We seek to  reduce  costs by  improving  wafer  yields,  negotiating  price
reductions  with  suppliers,  increasing the level and efficiency of our testing
and  packaging  operations,  achieving  economies  of scale  by means of  higher
production  levels,  and  increasing  the  number  of die  produced  per  wafer,
principally by shrinking the die size of our products. No assurance can be given
that these efforts will continue to be successful.  Our capability to shrink the
die  size of our  FPGAs  is  dependent  on the  availability  of  more  advanced
manufacturing  processes.  Due to the custom  steps  involved  in  manufacturing
antifuse and (to a lesser extent) flash FPGAs, we typically obtain access to new
manufacturing  processes later than our competitors using standard manufacturing
processes.

     Research and Development (R&D)

     R&D expenditures were $10.2 million, or 27% of net revenues,  for the third
quarter of 2003  compared with $9.9  million,  or 27% of net  revenues,  for the
second  quarter  of 2003 and $9.6  million,  or 29% of  revenues,  for the third
quarter of 2002. R&D spending increased primarily due to increased headcount.

     R&D expenditures were $29.6 million, or 27% of net revenues,  for the first
nine months of 2003 compared with $29.2 million, or 29% of net revenues, for the
first nine months of 2002.  R&D spending  increased only slightly from the first
nine months of 2002 as  increased  expenses on payroll and  benefits in 2003 was
offset by the  elimination  of spending on the Bridge FPGA  initiative  that had
occurred during the first half of 2002.

     Selling, General, and Administrative (SG&A)

     SG&A expenses  were $10.5  million,  or 27% of net revenues,  for the third
quarter of 2003 compared  with $11.1  million,  or 30% of net revenues,  for the
second quarter of 2003 and $10.6 million, or 32% of net revenues,  for the third
quarter of 2002. SG&A spending  decreased  sequentially  primarily  because of a
$0.6 million reduction in accruals for estimated legal  liabilities.  Net of the
reduction in legal accruals,  SG&A expense  increased from the second quarter of
2003 principally because of increased selling expenses associated with increased
revenue.

     SG&A expenses  were $32.6  million,  or 30% of net revenues,  for the first
nine months of 2003 compared with $32.3 million, or 32% of net revenues, for the
first nine months of fiscal 2002. SG&A expenses increased principally because of
increased  selling  expenses and spending related to tax planning and compliance
with the requirements of the Sarbanes-Oxley Act of 2002.

     Amortization of Acquisition-Related Intangibles and Expenses

     Amortization  of  acquisition-related  intangibles  and  expenses  was $0.7
million for all periods presented.  Due to the implementation of SFAS No. 142 in
the first quarter of 2002, the amortization of goodwill was eliminated. See Note
3 of Notes to Unaudited  Consolidated Condensed Financial Statements for further
discussion of SFAS Nos. 142 and 144.

     Interest Income and Other, Net

     Interest  income and other,  net was $0.7 million for the third  quarter of
2003 compared with $0.7 million for the second  quarter of 2003 and $1.4 million
for the third quarter of 2002.  Interest income and other,  net was $2.5 million
for the first nine months of 2003  compared with $4.7 million for the first nine
months of 2002. The quarterly and nine-month  decreases  compared with 2002 were
due to lower interest rates  available in the market and lower gains realized on
our  short-term  investments,  which were  partially  offset by  increased  cash
available for investment.

     Losses on Sales and Write-Downs of Equity Investments

     During  2002,  we  realized  losses  and  recorded  impairment  write-downs
totaling $3.7 million in connection with our strategic equity investments, which
consisted of $1.6 million  related to an investment in a publicly traded company
and $2.1 million  related to an equity  investment in a private  company.  As of
December 31, 2002, we had $0.3 million of strategic equity investments remaining
on the balance  sheet.  During the second quarter of 2003, we sold our remaining
investment in the publicly  traded  equity  security for a gain of $0.1 million.
During  the third  quarter  of 2003,  we had no  gains,  losses,  or  impairment
write-downs in connection with our remaining  equity  investment of $0.1 million
in the private company.

     Tax (Benefit) Provision

     The tax  provision  was $0.4 million for the third quarter of 2003 compared
with a benefit of $0.1  million for the second  quarter of 2003 and a benefit of
$1.3  million for the third  quarter of 2002.  The tax  provision  for the third
quarter  reflects  the increase in profit  before tax  compared  with the second
quarter of 2003, and the third quarter of 2002.  Each of the quarters  presented
contain significant credits primarily generated by R&D spending. Below a certain
level of profitability,  taxes  attributable to the profits for a period may not
exceed the credits for that period and a tax credit will be recorded in a period
with positive net income before tax,  resulting in a negative  effective  income
tax rate. For the second quarter of 2003, applying the statutory tax rate to our
net  income  before  tax  resulted  in taxes  that were more than  offset by tax
credits and resulted in a tax credit.  For the third quarter of 2003, net income
before tax was higher than the second quarter,  and was at a level sufficient to
generate tax expenses in excess of the credits attributable to the third quarter
and a tax provision was recorded.

     The tax benefit recorded for the first nine months of 2003 was comprised of
tax  credits  generated  by R&D  spending  that more than offset the tax expense
associated  with a pre-tax  profit of $3.3 million.  During the third quarter of
2002, the expectation for annual results was revised and a cumulative adjustment
was  recorded  to bring the net tax  provision  for that year to date into a net
benefit position.

     Our tax position is based on the  estimated  annual tax rate in  compliance
with  SFAS No.  109,  "Accounting  for  Income  Taxes."  Significant  components
affecting  the  effective  tax rate  include  federal R&D  credits,  income from
tax-exempt  securities,  the state  composite  rate, and  recognition of certain
deferred tax assets subject to valuation allowances.

Liquidity and Capital Resources

     Our cash, cash equivalents,  and short-term investments were $149.1 million
at the end of the third  quarter of 2003  compared  with  $133.8  million at the
beginning of the year.

     Cash provided by operating  activities  was $9.2 million for the first nine
months of 2003 compared with $2.3 million for the first nine months of 2002. The
increase in cash provided by operations  resulted  primarily  from an income tax
refund of $5.0  million  for taxes paid in prior  years based on a carry back of
net operating losses. In addition,  net income for the first nine months of 2003
provided  $2.0  million  more in cash from  operations  than for the first  nine
months of 2002 excluding the impact of the income tax refund.

     Capital  expenditures  were $7.6  million for the first nine months of 2003
compared  with $6.3  million for the first nine months of 2002.  Sales of common
stock under  employee  stock plans  provided $14.0 million of cash for the first
nine  months of 2003  compared  with $7.0  million  for the first nine months of
2002.  We used $3.3  million of cash to  repurchase  stock during the first nine
months of 2002.

     We meet all of our funding  needs for ongoing  operations  with  internally
generated  cash flows from  operations  and with  existing  cash and  short-term
investment  balances.  {We believe that existing  cash,  cash  equivalents,  and
short-term  investments,  together with cash generated from operations,  will be
sufficient to meet our 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  have  at  times
demanded  financial support from customers in the form of equity investments and
advance purchase price deposits,  which in some cases have been substantial.  If
we  require  additional  capacity,  we  may be  required  to  incur  significant
expenditures to secure such capacity.

     We believe  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 us to raise additional  capital.  We monitor the
availability and cost of potential capital resources, including equity and debt,
with a view toward  raising  additional  capital on terms that are acceptable to
us. No assurance can be given that additional  capital would become available on
acceptable terms if needed.

Factors Affecting Future Operating Results

     Our  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 us,  any of which  could  cause  our  operating  results  to differ
materially from past results.  See the Risk Factors set forth at the end of Part
I of our 2002 Form 10-K, which are incorporated by this reference.

     Income Taxes

     We account for income taxes in  accordance  with SFAS No. 109,  "Accounting
for Income  Taxes," which  requires that deferred tax assets and  liabilities be
recognized  using  enacted  tax rates for the  effect of  temporary  differences
between the book and tax bases of recorded assets and liabilities.  SFAS No. 109
also requires that deferred tax assets be reduced by a valuation allowance if it
is more likely than not that some or all of the  deferred tax assets will not be
realized.  We evaluate  annually the realizability of our deferred tax assets by
assessing our  valuation  allowance  and, if necessary,  we adjust the amount of
such allowance. The factors used to assess the likelihood of realization are our
forecast of future  taxable  income and available tax planning  strategies  that
could be  implemented  to realize the net deferred tax assets.  Factors that may
affect our ability to achieve sufficient  forecasted taxable income include, but
are not limited to, increased  competition,  a decline in sales or margins, loss
of market share, delays in product availability, and technological obsolescence.

     At October 5, 2003,  we had a net deferred tax asset of $39.0 million after
consideration of deferred tax liabilities and a valuation allowance. In order to
fully  utilize the $39.0 million of deferred tax assets,  taxable  income in the
amount of  approximately  $130  million  must be earned in future  periods.  For
proper valuation of deferred tax assets under SFAS No. 109, significant negative
evidence is considered to exist regarding a company's ability to generate future
taxable  income when the company has incurred a three-year  cumulative  loss. We
have incurred a cumulative operating loss for the past two fiscal years, but are
currently  profitable for 2003 through the nine months ended October 5, 2003. At
October  5,  2003,  we  believe  the  deferred  tax  asset  is  realizable   and
appropriately stated. We will complete our formal realizability  analysis during
the fourth  quarter of 2003.  The results of this  analysis  could result in the
need to record  additional  valuation  allowance,  which  would  have an adverse
impact on our consolidated financial position or results of operations.



<PAGE>


Additional Quarterly Information

     The following table presents certain  unaudited  quarterly results for each
of the eight  quarters in the period ended October 5, 2003. In our opinion,  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  our  audited  consolidated  condensed
financial  statements and notes thereto included in our 2002 Form 10-K. However,
these  quarterly  operating  results are not  indicative  of the results for any
future period.

<TABLE>
<CAPTION>
                                                                           Three Months Ended
                                      ---------------------------------------------------------------------------------------------
                                       Oct. 5,     Jul. 6,     Apr. 6,     Jan. 5,     Oct. 6,     Jul. 7,     Apr. 7,     Jan. 6,
                                        2003        2003        2003        2003        2002        2002        2002        2002
                                      ---------   ---------   ---------   ---------   ---------   ---------   ---------   ---------
                                                            (unaudited, in thousands except per share amounts)
Statements of Operations Data:
<S>                                   <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
Net revenues.......................   $  38,405   $  36,609   $  34,341   $  34,103   $  32,912   $  34,293   $  33,060   $  32,059
Gross profit.......................      23,319      22,025      19,612      20,591      19,229      21,337      20,276      19,567
Income (loss) from operations......       1,965         441      (1,614)       (951)     (1,587)       (282)       (853)     (4,086)
Net income (loss)..................       2,283       1,386         231      (1,831)      1,107         404         395      (2,531)
Net income (loss) per share:
   Basic...........................   $    0.09   $    0.06   $    0.01   $   (0.08)   $   0.05   $    0.02   $    0.02   $   (0.11)
                                      =========   =========   =========   =========    ========   =========   =========   =========
   Diluted.........................   $    0.08   $    0.05   $    0.01   $   (0.08)   $   0.04   $    0.02   $    0.02   $   (0.11)
                                      =========   =========   =========   =========    ========   =========   =========   =========
Shares used in computing net income
   (loss) per share:
   Basic...........................      25,005      24,550      24,338      24,126      24,531      24,382      24,170      23,987
                                      =========   =========   =========   =========    ========   =========   =========   =========
   Diluted.........................      27,101      25,776      25,087      24,126      24,959      26,036      25,388      23,987
                                      =========   =========   =========   =========    ========   =========   =========   =========

                                                                           Three Months Ended
                                      ---------------------------------------------------------------------------------------------
                                       Oct. 5,     Jul. 6,     Apr. 6,     Jan. 5,     Oct. 6,     Jul. 7,     Apr. 7,     Jan. 6,
                                        2003        2003        2003        2003        2002        2002        2002        2002
                                      ---------   ---------   ---------   ---------   ---------   ---------   ---------   ---------
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.......................        60.7        60.2        57.1        60.4        58.4        62.2        61.3        61.0
Income (loss) from operations......         5.1         1.2        (4.7)       (2.8)       (4.8)       (0.8)       (2.6)      (12.7)
Net income (loss)..................         5.9         3.8         0.7        (5.4)        3.4         1.2         1.2        (7.9)
</TABLE>




<PAGE>




Item 3. Quantitative and Qualitative Disclosures About Market Risk

     As of October 5, 2003,  our  investment  portfolio  (other  than  strategic
investments)  consisted  primarily of corporate bonds,  floating rate notes, and
federal and municipal  obligations.  The principal  objectives of our investment
activities are to preserve principal, meet liquidity needs, and maximize yields.
To meet these objectives,  we invest only in high credit quality debt securities
with average  maturities of less than two years. We also limit 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 our investment portfolio.

     We are exposed to financial  market  risks,  including  changes in interest
rates and marketable equity security prices.  All of the potential changes noted
below are based on sensitivity  analysis performed on our financial position and
expected  operating  levels at  October  5,  2003.  Actual  results  may  differ
materially.

     Our  investments are subject to interest rate risk. An increase in interest
rates  could  subject us to a decline in the  market  value of our  investments.
These risks are mitigated by our ability to hold these  investments to maturity.
A  hypothetical  100 basis point  increase in interest  rates would  result in a
reduction   of   approximately   $1.3   million   in  the  fair   value  of  our
available-for-sale securities held at October 5, 2003.

Item 4. Controls and Procedures

     Evaluation of disclosure controls and procedures. Our management evaluated,
with the  participation  of our Chief Executive  Officer and our Chief Financial
Officer,  the effectiveness of our disclosure  controls and procedures as of the
end of the period covered by this Quarterly  Report on Form 10-Q.  Based on this
evaluation,  our Chief Executive  Officer and our Chief  Financial  Officer have
concluded  that our  disclosure  controls and procedures are effective to ensure
that  information  we are required to disclose in reports that we file or submit
under the Securities  Exchange Act of 1934 is recorded,  processed,  summarized,
and  reported  within the time  periods  specified  in  Securities  and Exchange
Commission rules and forms.

     Changes in internal control over financial  reporting.  There was no change
in our internal control over financial reporting that occurred during the period
covered by this Quarterly Report on Form 10-Q that has materially  affected,  or
is reasonably likely to materially  affect,  our internal control over financial
reporting.

     Following the end of the period  covered by this  Quarterly  Report on Form
10-Q, a review of our procedures  revealed errors in the process by which we had
calculated pro forma  compensation  expense for the purpose of providing the pro
forma  footnote  disclosure  required  by  Statement  of  Financial   Accounting
Standards (SFAS) No. 123,  "Accounting for Stock-Based  Compensation,"  and SFAS
No. 148, "Accounting for Stock-Based Compensation -- Transition and Disclosure."
The errors were  limited to footnote  disclosure  under SFAS Nos. 123 and 148 of
non-cash pro forma compensation  expense and do not change or have any impact on
our historically reported statements of income, balance sheets, or statements of
cash  flows.  See  Stock  Based  Compensation  in Note 1 of Notes  to  Unaudited
Consolidated Financial Statements for further discussion.  We have corrected the
process by which such pro forma  footnote  disclosure is prepared and instituted
additional internal controls to ensure that the correct process is followed.


                          PART II -- OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

     (a) Exhibits

 Exhibit Number                            Description
-----------------   ------------------------------------------------------------
      31            Certification of Chief Executive Officer and Chief Financial
                    Officer  pursuant to Rule 13a-14(a) (17 CFR  240.13a-14(a)),
                    as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
                    of 2002.

      32            Certification of Chief Executive Officer and Chief Financial
                    Officer  pursuant  to 18 U.S.C.  Section  1350,  as  adopted
                    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

     (b) Reports on Form 8-K

     On July 23, 2003, we announced our financial  results for the quarter ended
July 6, 2003. The full text of the press release  issued in connection  with the
announcement  was  attached as Exhibit  99.1 to our  Current  Report on Form 8-K
furnished to the SEC on July 23, 2003.


<PAGE>

                                    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: November 17, 2003                     /s/ Jon A. Anderson
                                           -------------------------------------
                                                       Jon A. Anderson
                                                  Vice President of Finance
                                                 and Chief Financial Officer
                                               (as principal financial officer
                                                 and on behalf of Registrant)




