We were also pleased to increase gross margin by 40 basis points to 58.2%, remaining at our desired operating model.
The modest headcount adjustments we made in March were helpful and allowed us to control operating expenses during the second quarter. The combination of revenue growth, gross margin growth, and operating expense controls resulted in significant EPS leverage.
GAAP EPS was at the high end of our guidance at $0.17, and our non-GAAP EPS of $0.23 beat the upper end of our guidance by a penny. Non-GAAP EPS excluding equity-based compensation reached $0.30.
Intersil experienced little upstream supply chain impact due to the Japanese earthquake. Because of alternate sources and resourcefulness of our suppliers, our delivery performance remained excellent. Even so, we believe there is modest inventory growth at our customers during the second quarter as a hedge against potential shortages.As expected, most of the downstream supply chain impact from the Japanese earthquake has already been resolved. However, we still see some pockets of minor shortages or delivery push-outs, primarily in the display and gaming markets. We expect any lingering shortages to be resolved during the third quarter.Second quarter results were again driven by the growing strength of industrial business, which grew by 10% sequentially. Tech-Wells’s strong growth in both automotive and securities surveillance, resumption in military growth, and isolated power management growth were several of the contributing factors. Despite what competitors may claim, Intersil remains the clear leader in PC power management. In fact, we believe our share of the Sandy Bridge notebook market, now exceeds the share we owned on the Montevina platform, and that’s no small fee.Although competition is intense, the power specifications for new processors are very difficult to meet, and Intersil continues to provide the best performing solutions. We estimate over 70% market share on the Sandy Bridge generation, and although it’s still early, we expect to retain similar market share on the upcoming Ivy Bridge generation.
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