10. Income Taxes

The following table presents the income tax expense of the Company:

The Company’s income tax expense was $3.4 million and $1.7 million for the three months ended July 1, 2012 and June 26, 2011, respectively. The Company’s income tax expense was $6.8 million for the six months ended July 1, 2012 and June 26, 2011.

The tax expense for the three and six months ended July 1, 2012 was primarily attributable to higher pre-tax income in foreign jurisdictions, withholding taxes relating to Samsung licensing revenue and the impact from the sale of land and building in Kuala Lumpur, offset by a release of reserves for uncertain tax positions in foreign locations.

The tax expense for the three and six months ended June 26, 2011 is primarily attributable to higher pre-tax income in foreign jurisdictions and a correction of uncertain income tax positions in foreign locations from May 11, 2010 to December 26, 2010.

As of July 1, 2012, all of the Company’s U.S. deferred tax assets, net of deferred tax liabilities, continue to be subject to a full valuation allowance. The valuation allowance is based on the Company’s assessment that it is more likely than not that the deferred tax assets will not be realizable in the foreseeable future.

As of December 25, 2011, the Company had U.S. federal and state net operating loss carry forwards of approximately $1.0 billion and $208.0 million, respectively. Approximately $533.6 million of the federal net operating loss carry forwards are subject to an annual limitation of $27.2 million. The federal and state net operating losses, if not utilized, expire from 2016 to 2031.

If the Company were to undergo an “ownership change” for purposes of Section 382 of the Internal Revenue Code of 1986, as amended, its ability to utilize its unlimited federal net operating loss carry forwards could be limited under certain provisions of the Internal Revenue Code. As a result, the Company could incur greater tax liabilities than it would in the absence of such a limitation and any incurred liabilities could materially adversely affect the Company’s results of operations and financial condition.