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 Act).   Yes [x] No [ ]

The number of shares outstanding of the Registrant's common stock as of July 3, 2004 was 32,457,561.

INDEX

Part I.	Financial Information
Item 1.	Financial Statements (unaudited)
	Condensed consolidated balance sheets – July 3, 2004 and December 31, 2003
	Condensed consolidated statements of operations and comprehensive loss – Three and six months ended July 3, 2004 and June 28, 2003.
	Condensed consolidated statements of cash flows – Six months ended July 3, 2004 and June 28, 2003.
	Notes to condensed consolidated financial statements – July 3, 2004.
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.	Quantitative and Qualitative Disclosures About Market Risk
Item 4.	Controls and Procedures
Part II.	Other Information
Item 1.	Legal Proceedings
Item 4.	Submission of Matters to a Vote of Security Holders
Item 6.	Exhibits and Reports on Form 8-K
	Signatures

		July 3, 2004			December 31, 2003
			(unaudited)			(Note 1	)
Assets
Current assets:
Cash and cash equivalents		$	19,313		$	18,525
Marketable securities			41,680			54,130
Accounts receivable			13,029			12,074
Inventories			13,960			10,321
Prepaid expenses and other current assets			4,231			3,243
Total current assets			92,213			98,293
Marketable securities			39,767			48,975
Property and equipment:
Equipment and furniture			132,875			130,815
Leasehold improvements			38,437			38,437
Projects in process			1,466			1,609
			172,778			170,861
Less accumulated depreciation and amortization			(124,117	)		(115,619	)
			48,661			55,242
Goodwill and other intangibles, net of amortization			6,394			1,788
Other assets			3,055			3,600
Total assets		$	190,090		$	207,898
Liabilities and stockholders equity
Current liabilities:
Accounts payable		$	10,690		$	9,497
Accrued liabilities			6,374			5,618
Accrued restructuring costs			1,281			1,994
Capital lease obligations			49			84
Total current liabilities			18,394			17,193
Long-term debt			66,700			66,700
Other long-term liabilities			3,079			2,959
Commitments and contingencies
Stockholders equity:
Common stock, $0.01 par value, 144,000,000 shares authorized, 32,457,561 and 31,225,888 issued and outstanding at July 3, 2004 and December 31, 2003			325			312
Additional paid-in capital			341,360			335,477
Accumulated deficit			(239,364	)		(214,881	)
Accumulated other comprehensive (loss) income			(404	)		138
Total stockholders’ equity			101,917			121,046
Total liabilities and stockholders’ equity		$	190,090		$	207,898

		Three Months Ended						Six Months Ended
		July 3, 2004			June 28, 2003			July 3, 2004			June 28, 2003
		(unaudited)						(unaudited)
Net sales		$	22,687		$	18,037		$	43,882		$	34,124
Cost of sales			19,207			17,250			38,382			33,329
Gross profit			3,480			787			5,500			795
Research and development expenses			8,866			8,280			17,768			15,437
Selling and administrative expenses			6,099			4,521			11,889			9,039
Restructuring and other charges			-			-			-			625
Purchased in-process R&D			-			1,690			-			1,690
Operating loss			(11,485	)		(13,704	)		(24,157	)		(25,996	)
Interest income			551			875			1,210			1,888
Interest expense			(940	)		(940	)		(1,880	)		(1,881	)
Other income (expense)			143			(2	)		344			(23	)
Net loss		$	(11,731	)	$	(13,771	)	$	(24,483	)	$	(26,012	)
Net loss per share		$	(0.36	)	$	(0.45	)	$	(0.77	)	$	(0.85	)
Weighted average common shares outstanding			32,404,755			30,674,033			31,984,714			30,674,033

		Three months ended						Six months ended
		July 3, 2004			June 28, 2003			July 3, 2004			June 28, 2003
(unaudited)								(unaudited)
Net loss		$	(11,731	)	$	(13,771	)	$	(24,483	)	$	(26,012	)
Unrealized loss on marketable securities			(522	)		(98	)		(507	)		(127	)
Foreign currency translation adjustment			(1	)		7			(16	)		13
Reclassification adjustment:
Net realized loss (gain) previously in other comprehensive income			-			3			(19	)		15
Comprehensive loss		$	(12,254	)	$	(13,859	)	$	(25,025	)	$	(26,111	)

ANADIGICS, Inc.