The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated condensed financial statements and the related notes and the other financial information included in this Quarterly Report on Form 10-Q. This discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of specified factors, including those set forth in Item 1A "Risk Factors" of Part II below and elsewhere in this Quarterly Report on Form 10-Q.

This discussion and analysis should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" set forth in our annual report on Form 10-K for the year ended December 31, 2011, filed with the Securities and Exchange Commission.

OVERVIEW

We are a leading global provider of time-critical and technologically complex printed circuit board (PCB) products and backplane assemblies (PCBs populated with electronic components), which serve as the foundation of sophisticated electronic products. We provide our customers with time-to-market and advanced technology products and offer a one-stop manufacturing solution to customers from engineering support to prototype development through final volume production. We serve a diversified customer base in various markets throughout the world, including manufacturers of networking/communications infrastructure products, touch screen tablets and mobile media devices (cellular phones and smartphones). We also serve high-end computing, commercial aerospace/defense, and industrial/medical industries. Our customers include both original equipment manufacturers (OEMs) and electronic manufacturing services (EMS) providers.

Based on customer inputs regarding new product introductions and overall prospects for our business, the majority of our net sales for 2012 are expected in the second half of the year. Labor expense has increased in our Asia Pacific segment beginning in the second quarter of 2012 due to both PRC government-mandated wage increases and additional compensation offered to our labor force as a result of a reduction of overtime hours that was implemented to meet standards required by some of our global customers. This increased labor expense has reduced the gross and operating margins of our Asia Pacific segment in 2012.

In January 2012, we temporarily closed a significant facility, Dongguan Shengyi Electronics Ltd. (SYE), located in Dongguan, China, for repairs and upgrades. A majority of SYE's production and a significant portion of its work force have been temporarily transferred to our other facilities located in South China since this closure. Net sales in our Asia Pacific operating segment in the second and two quarters ended June 25, 2012 were reduced by approximately $2.8 million and approximately $5.3 million, respectively, as a result of this temporary closure. The SYE facility is expected to reopen during the third quarter of 2012.

While our customers include both OEMs and EMS providers, we measure customers based on OEM companies as they are the ultimate end customers. Sales to our 10 largest customers accounted for 44% and 47% of our net sales in the quarters ended June 25, 2012 and June 27, 2011, respectively. Sales to our 10 largest customers accounted for 46% and 47% of our net sales in the two quarters ended June 25, 2012 and June 27, 2011, respectively. We sell to OEMs both directly and indirectly through EMS companies.

The following table shows the percentage of our net sales attributable to each of the principal end markets we served for the periods indicated.

                                                        Quarter Ended                    Two Quarters Ended
                                                  June 25,         June 27,         June 25,            June 27,
End Markets(1)                                      2012             2011             2012                2011
Aerospace/Defense                                        16 %             17 %             16 %                16 %
Cellular Phone                                           12                9               11                   9
Computing/Storage/Peripherals                            21               23               23                  25
Medical/Industrial/Instrumentation/Other                  9                7                9                   8
Networking/Communications                                32               38               32                  36
Other                                                    10                6                9                   6

Total                                                   100 %            100 %            100 %               100 %

(1) Sales to EMS companies are classified by the end markets of their OEM customers.

For PCBs, we measure the time sensitivity of our products by tracking the quick-turn percentage of our work. We define quick-turn orders as those with delivery times of 10 days or less, which typically captures research and development, prototype, and new product introduction work, in addition to unexpected short-term demand among our customers. Generally, we quote prices after we receive the design specifications and the time and volume requirements from our customers. Our quick-turn services command a premium price as compared to standard lead-time products. We also deliver a significant percentage of compressed lead-time work with lead times of 11 to 20 days. We typically receive a premium price for this work as well. Purchase orders may be cancelled prior to shipment. We charge customers a fee, based on percentage completed, if an order is cancelled once it has entered production. We derive revenues primarily from the sale of PCBs and backplane assemblies using customer-supplied engineering and design plans. We recognize revenues when persuasive evidence of a sales arrangement exists, the sales terms are fixed or determinable, title and risk of loss have transferred, and collectibility is reasonably assured - generally when products are shipped to the customer. Net sales consist of gross sales less an allowance for returns, which typically has been less than 2% of gross sales. We provide our customers a limited right of return for defective PCBs and backplane assemblies. We record an estimated amount for sales returns and allowances at the time of sale based on historical information.

Cost of goods sold consists of materials, labor, outside services, and overhead expenses incurred in the manufacture and testing of our products as well as stock-based compensation expense. Many factors affect our gross margin, including capacity utilization, product mix, production volume, and yield. We generally do not participate in any significant long-term contracts with suppliers, with the exception of the supply arrangement to purchase laminate and prepregs from a related party controlled by a significant shareholder, and we believe there are a number of potential suppliers for the raw materials we use.

Selling and marketing expenses consist primarily of salaries and commissions paid to our internal sales force and independent sales representatives, salaries paid to our sales support staff, stock-based compensation expense as well as costs associated with marketing materials and trade shows. We generally pay higher commissions to our independent sales representatives for quick-turn work, which generally has a higher gross profit component than standard lead-time work.

General and administrative costs primarily include the salaries for executive, finance, accounting, information technology, facilities and human resources personnel, as well as insurance expenses, expenses for accounting and legal assistance, incentive compensation expense, stock-based compensation expense, bad debt expense, and gains or losses on the sale or disposal of property, plant and equipment.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our consolidated condensed financial statements included in this report have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses, and related disclosure of contingent assets and liabilities.

A critical accounting policy is defined as one that is both material to the presentation of our consolidated condensed financial statements and requires management to make judgments that could have a material effect on our financial condition or results of operations. These policies require us to make assumptions about matters that are highly uncertain at the time of the estimate. Different estimates we could reasonably have used, or changes in the estimates that are reasonably likely to occur, could have a material effect on our financial condition or results of operations.

Management bases its estimates on historical experience and on various other assumptions that are believed to be 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. Management has discussed the development, selection and disclosure of these estimates with the audit committee of our board of directors. Actual results may differ from these estimates under different assumptions or conditions.

Our critical accounting policies include asset valuation related to bad debts and inventory; sales returns and allowances; impairment of long-lived assets, including goodwill and intangible assets; derivative instruments and hedging activities; realizability of deferred tax assets; and determining self-insured reserves.

Allowance for Doubtful Accounts

We provide customary credit terms to our customers and generally do not require collateral. We perform ongoing credit evaluations of the financial condition of our customers and maintain an allowance for doubtful accounts based upon historical collections experience and judgments as to expected collectibility of accounts. Our actual bad debts may differ from our estimates.

Inventories

In assessing the realizability of inventories, we are required to make judgments as to future demand requirements and compare these with current and committed inventory levels. When the market value of inventory is less than the carrying value, the inventory cost is written down to the estimated net realizable value, thereby establishing a new cost basis. Our inventory requirements may change based on our projected customer demand, market conditions, technological and product life cycle changes, longer or shorter than expected usage periods, and other factors that could affect the valuation of our inventories. We maintain certain finished goods inventories near certain key customer locations in accordance with agreements with those customers. Although this inventory is typically supported by valid purchase orders, should these customers ultimately not purchase these inventories, our results of operations and financial condition could be adversely affected.

Sales Returns and Allowances

We derive revenues primarily from the sale of printed circuit boards and backplane assemblies using customer-supplied engineering and design plans and generally recognize revenue upon delivery. We provide our customers a limited right of return for defective printed circuit boards and backplane assemblies. We accrue an estimated amount for sales returns and allowances at the time of sale using our judgment based on historical information and anticipated returns as a result of current period sales. To the extent actual experience varies from our historical experience, revisions to these allowances may be required.

Long-lived Assets

We have significant long-lived tangible and intangible assets consisting of property, plant and equipment, definite-lived intangibles, and goodwill. We review these assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. In addition, we perform an impairment test related to goodwill at least annually. Our goodwill and intangibles are largely attributable to our acquisitions of other businesses. We have two operating segments, Asia Pacific and North America.

During the fourth quarter of each year, or when events and circumstances warrant an evaluation, we perform an impairment assessment of goodwill, which requires the use of a fair value based analysis. We determine the fair value of our reporting units based on discounted cash flows and market approach analyses as considered necessary and consider factors such as a weakened economy, reduced expectations for future cash flows coupled with a decline in the market price of our stock and market capitalization for a sustained period as indicators for potential goodwill impairment. If the reporting unit's carrying amount exceeds its estimated fair value, a second step must be performed to measure the amount of the goodwill impairment loss, if any. The second step compares the implied fair value of the reporting unit's goodwill, determined in the same manner as the amount of goodwill recognized in a business combination, with the carrying amount of such goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.

We also assess other long-lived assets, specifically property, plant and equipment, for potential impairment given similar impairment indicators. When indicators of impairment exist related to our long-lived tangible assets and definite-lived intangible assets, we use an estimate of the undiscounted net cash flows in measuring whether the carrying amount of the assets is recoverable. Measurement of the amount of impairment, if any, is based upon the difference between the asset's carrying value and estimated fair value. Fair value is determined through various valuation techniques, including market and income approaches as considered necessary.

We use an estimate of the future undiscounted net cash flows in measuring whether our long-lived tangible assets and definite-lived intangible assets are recoverable. If forecasts and assumptions used to support the realizability of our goodwill and other long-lived assets change in the future, significant impairment charges could result that would adversely affect our results of operations and financial condition.

Derivative Instruments and Hedging Activities

As a matter of policy, we use derivatives for risk management purposes, and we do not use derivatives for speculative purposes. Derivatives are typically entered into as hedges of changes in interest rates, currency exchange rates, and other risks.

When we determine to designate a derivative instrument as a cash flow hedge, we formally document the hedging relationship and its risk management objective and strategy for undertaking the hedge, the hedging instrument, the hedged item, the nature of the risk being hedged, how the hedging instrument's effectiveness in offsetting the hedged risk will be assessed, and a description of the method of measuring ineffectiveness. We also formally assess, both at the hedge's inception and on an ongoing basis, whether the derivative that is used in hedging transactions is highly effective in offsetting changes in cash flows of hedged items.

Derivative financial instruments are recognized as either assets or liabilities on the consolidated condensed balance sheet with measurement at fair value. Fair value of the derivative instruments is determined using pricing models developed based on the underlying swap interest rate, foreign currency exchange rates, and other observable market data as appropriate. The values are also adjusted to reflect nonperformance risk of both the counterparty and the Company. For derivatives that are designated as a cash flow hedge, changes in the fair value of the derivative are recognized in accumulated other comprehensive income, to the extent the derivative is effective at offsetting the changes in cash flow being hedged until the hedged item affects earnings. To the extent there is any hedge ineffectiveness, changes in fair value relating to the ineffective portion are immediately recognized in earnings. Changes in the fair value of derivatives that are not designated as hedges are recorded in earnings each period.

Income Taxes

Deferred income tax assets are reviewed for recoverability, and valuation allowances are provided, when necessary, to reduce deferred income tax assets to the amounts that are more likely than not to be realized based on our estimate of future taxable income. Should our expectations of taxable income change in future periods, it may be necessary to establish a valuation allowance, which could affect our results of operations in the period such a determination is made. We record an income tax provision or benefit during interim periods at a rate that is based on expected results for the full year. If future changes in market conditions cause actual results for the year to be more or less favorable than those expected, adjustments to the effective income tax rate could be required.

In addition, we are subject to income taxes in the United States and foreign jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes. In the ordinary course of our business, there are many transactions where the ultimate tax determination is uncertain. Additionally, our calculations of income taxes are based on our interpretations of applicable tax laws in the jurisdictions in which we file.

Self Insurance

We are primarily self-insured in North America for group health insurance and worker's compensation benefits provided to our U.S. employees, and we purchase insurance to protect against annual claims at the individual and aggregate level. We estimate our exposure for claims incurred but not reported at the end of each reporting period. We use our judgment using our historical claim data and information and analysis provided by actuarial and claim advisors, our insurance carriers and brokers on an annual basis to estimate our liability for these claims. This liability is subject to individual insured stop-loss coverage for both programs, which is $250,000 per individual. Our actual claims experience may differ from our estimates.

RESULTS OF OPERATIONS

There were 91 days in each of the second quarters ended June 25, 2012 and
June 27, 2011, and 177 and 178 days in the two quarters ended June 25, 2012 and
June 27, 2011, respectively. The following table sets forth the relationship of
various items to net sales in our consolidated condensed statement of
operations:



                                                 Quarter Ended                                Two Quarters Ended
                                      June 25, 2012          June 27, 2011           June 25, 2012           June 27, 2011
Net sales                                      100.0 %                100.0 %                 100.0 %                 100.0 %
Cost of goods sold                              83.3                   78.9                    82.3                    77.5

Gross profit                                    16.7                   21.1                    17.7                    22.5

Operating expenses:
Selling and marketing                            2.8                    2.5                     2.8                     2.6
General and administrative                       7.2                    6.6                     7.3                     6.7
Amortization of definite-lived
intangibles                                      1.2                    1.2                     1.2                     1.2
Impairment of long-lived assets                   -                    13.1                      -                      6.8

Total operating expenses                        11.2                   23.4                    11.3                    17.3

Operating income (loss)                          5.5                   (2.3 )                   6.4                     5.2
Other income (expense):
Interest expense                                (1.9 )                 (1.8 )                  (2.1 )                  (1.8 )
Other, net                                      (0.1 )                  0.9                     0.2                     0.6

Total other expense, net                        (2.0 )                 (0.9 )                  (1.9 )                  (1.2 )

Income (loss) before income
taxes                                            3.5                   (3.2 )                   4.5                     4.0
Income tax provision                            (1.2 )                 (2.3 )                  (1.3 )                  (2.8 )

Net income (loss)                                2.3                   (5.5 )                   3.2                     1.2
Less: Net income attributable to
noncontrolling interest                           -                    (0.2 )                    -                     (0.3 )

Net income (loss) attributable
to TTM Technologies, Inc.
stockholders                                     2.3 %                 (5.7 )%                  3.2 %                   0.9 %

We manage our worldwide operations based on two geographic operating segments:
(1) Asia Pacific, which consists of the PCB Subsidiaries and their seven PCB fabrication plants, which include a substrate facility; and (2) North America, which consists of seven domestic PCB fabrication plants, including a facility that provides follow-on value-added services primarily for one of the PCB fabrication plants, and one backplane assembly plant in Shanghai, China, which is managed in conjunction with our U.S. operations and its related European sales support infrastructure. Each segment operates predominantly in the same industry with production facilities that produce similar customized products for our customers and use similar means of product distribution in their respective geographic regions.

The following table compares net sales by reportable segment for the quarters and two quarters ended June 25, 2012 and June 27, 2011:

                                              Quarter Ended                               Two Quarters Ended
                                   June 25, 2012          June 27, 2011          June 25, 2012          June 27, 2011
                                                                     (In thousands)
Net Sales:
Asia Pacific                      $       195,561        $       226,203        $       367,319        $       428,668
North America                             132,309                142,245                262,333                284,495

Total sales                               327,870                368,448                629,652                713,163
Inter-segment sales                          (447 )               (2,331 )               (1,730 )               (4,245 )

Total net sales                   $       327,423        $       366,117        $       627,922        $       708,918

Net Sales

Total net sales decreased $38.7 million, or 10.6%, from $366.1 million for the quarter ended June 27, 2011 to $327.4 million for the quarter ended June 25, 2012. Net sales for the Asia Pacific segment, excluding inter-segment sales, decreased $28.8 million, or 12.9%, from $223.9 million in the quarter ended June 27, 2011 to $195.1 million in the quarter ended June 25, 2012. This decrease was primarily due to lower demand in our Networking/Communications and Computing end markets, resulting in an 18% decline in PCB shipments from the quarter ended June 27, 2011. The average PCB selling price increased by 6%, which was driven by the mix shift from conventional PCBs and standard HDI PCBs toward higher priced advanced HDI PCBs. Net sales related to the North America segment decreased $9.9 million, or 7.0%, from $142.2 million for the quarter ended June 27, 2011 to $132.3 million for the quarter ended June 25, 2012, and was primarily due to lower demand in our Aerospace/Defense end market, resulting in a 7% decline in PCB sales volume partially offset by a 2% increase in the average PCB selling price. In addition, demand for backplane assemblies dropped by 12% from the quarter ended June 27, 2011.

Total net sales decreased by $81.0 million, or 11.4%, from $708.9 million for the two quarters ended June 27, 2011 to $627.9 million for the two quarters ended June 25, 2012. Net sales for the Asia Pacific segment, excluding inter-segment sales, decreased by $58.8 million, or 13.9%, from $424.4 million for the two quarters ended June 27, 2011 to $365.6 million for the two quarters ended June 25, 2012, mainly due to lower demand in our Networking/Communications and Computing end markets, resulting in an 22% decline in PCB shipments from the two quarters ended June 27, 2011. The average PCB selling price increased by 11%, which was driven by the mix shift from conventional PCBs and standard HDI PCBs toward higher priced advanced HDI PCBs. Net sales related to the North America segment decreased by $22.2 million, or 7.8%, from $284.5 million for the two quarters ended June 27, 2011 to $262.3 million for the two quarters ended June 25, 2012, primarily due to lower demand in our Aerospace/Defense and Networking/Communications end markets, resulting in a 10% decline in PCB sales volume partially offset by a 5% increase in the average PCB selling price. In addition, demand for backplane assemblies dropped by 16% from the two quarters ended June 27, 2011.

Cost of Goods Sold

Cost of goods sold decreased $16.1 million, or 5.6%, from $288.8 million for the quarter ended June 27, 2011 to $272.7 million for the quarter ended June 25, 2012. Cost of goods sold for the Asia Pacific segment decreased $9.9 million, or 5.7%, from $174.8 million for the quarter ended June 27, 2011 to $164.9 million for the quarter ended June 25, 2012. As a percentage of net sales, cost of goods sold for the Asia Pacific segment increased from 78.1% for the quarter ended June 27, 2011 to 84.5% for the quarter ended June 27, 2012, primarily due to higher labor costs in China, increased depreciation expense and lower fixed cost absorption due to the decline in net sales. Included in cost of goods sold for the quarter ended June 25, 2012 are approximately $4.4 million of costs related to the temporary closure of our SYE facility in Dongguan, China. These costs consist primarily of labor costs and depreciation expense. Cost of goods sold for the North America segment decreased $6.2 million, or 5.4%, from $114.0 million for the quarter ended June 27, 2011 to $107.8 million for the quarter ended June 25, 2012. As a percentage of net sales, cost of goods sold for the North America segment increased from 80.1% for the quarter ended June 27, 2011 to 81.5% for the quarter ended June 25, 2012, primarily due to higher labor expense and lower fixed cost absorption due to the decline in net sales, partially offset by a lower mix of backplane assemblies, which have higher direct material content.

Cost of goods sold decreased $32.9 million, or 6.0%, from $549.7 million for the . . .