UNITED STATES
                SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549


                           SCHEDULE 13G

             Under the Securities Exchange Act of 1934

                        (Amendment No. 2)*

                      PHOENIX TECHNOLOGY LTD

                          (Name of Issuer)

                           COMMON STOCK

                   (Title of Class of Securities)


                             719153108

                          (CUSIP Number)

                        September 30, 2010

        (Date of Event which Requires Filing of Statement)

Check the appropriate box to designate the Rule pursuant to which
this Schedule is filed:

[x] Rule 13d - 1(b)

    Rule 13d - 1(c)

    Rule 13d - 1(d)

*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a
prior cover page.

The information required on the remainder of this page shall not
be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to
the liabilities of that section of the Act but shall be subject to
all other provisions of the Act (however, see the Notes.)

                  (Continued on following page(s)
                        Page 1 of 6 Pages
CUSIP NO. 719153108            13G           Page   2   of   6

1  Name of Reporting Person
   S.S. or I.R.S. Identification No. of Above Person

   T. ROWE PRICE ASSOCIATES, INC.
   52-0556948

2  Check the Appropriate Box if a Member of a Group*

                                                       (a) ____
   NOT APPLICABLE                                     (b) ____

3  SEC Use Only

   ______________________________

4  Citizenship or Place of Organization

   MARYLAND

Number of      5  Sole Voting Power
               **
Shares            8,780

Beneficially   6  Shared Voting Power
               **
Owned By Each     -0-

Reporting      7  Sole Dispositive Power
               **
Person            1,016,580

With           8  Shared Dispositive Power

                  -0-

9  Aggregate Amount Beneficially Owned by Each Reporting Person

   1,016,580

10 Check Box if the Aggregate Amount in Row (9) Excludes Certain
   Shares*

   NOT APPLICABLE

11 Percent of Class Represented by Amount in Row 9

   2.8%

12 Type of Reporting Person*

   IA
               *SEE INSTRUCTION BEFORE FILLING OUT!
         **Any shares reported in Items 5 and 6 are also
                       reported in Item 7.

CUSIP NO. 719153108             13G       Page  3   of  6  Pages

1  Name of Reporting Person
   S.S. or I.R.S. Identification No. of Above Person

   T. ROWE PRICE NEW HORIZONS FUND, INC.
   52-0791372

2  Check the Appropriate Box if a Member of a Group*

                                                       (a) ____
   NOT APPLICABLE                                     (b) ____

3  SEC Use Only

   ______________________________

4  Citizenship or Place of Organization

   Maryland

Number of      5  Sole Voting Power
               **
Shares            0

Beneficially   6  Shared Voting Power
               **
Owned By Each     NONE

Reporting      7  Sole Dispositive Power
               **
Person            NONE

With           8  Shared Dispositive Power

                  NONE

9  Aggregate Amount Beneficially Owned by Each Reporting Person

   0

10 Check Box if the Aggregate Amount in Row (9) Excludes Certain
   Shares*

   NOT APPLICABLE

11 Percent of Class Represented by Amount in Row 9

   0.0%

12 Type of Reporting Person*

   IV
               *SEE INSTRUCTION BEFORE FILLING OUT!
**The aggregate amount reported on this page is also included in
the aggregate amount reported by T. Rowe Price Associates, Inc. on
page 2 of this Schedule 13G.
SCHEDULE 13G
PAGE  4   OF  6

Item 1(a) Name of Issuer:

          Reference is made to page 1 of this Schedule 13G

Item 1(b) Address of Issuer's Principal Executive Offices:

            915 MURPHY RANCH RD, MILPITAS CA 95035

Item 2(a) Name of Person(s) Filing:

          (1)  T. Rowe Price Associates, Inc. ("Price
               Associates")

          (2) T. Rowe Price New Horizons Fund, Inc.

  X       Attached as Exhibit A is a copy of an agreement between
          the Persons Filing (as specified hereinabove) that this
          Schedule 13G is being filed on behalf of each of them.

Item 2(b) Address of Principal Business Office:

          100 E. Pratt Street, Baltimore, Maryland 21202

Item 2(c) Citizenship or Place of Organization:

          (1) Maryland

          (2) Maryland

Item 2(d) Title of Class of Securities:

          Reference is made to page 1 of this Schedule 13G

Item 2(e) CUSIP Number: 719153108


Item 3    The person filing this Schedule 13G is an:

  X       Investment Adviser registered under Section 203 of the
          Investment Advisers Act of 1940

  X       Investment Company registered under Section 8 of the
          Investment Company Act of 1940


Item 4    Reference is made to Items 5-11 on page 2 of this
          Schedule 13G.
SCHEDULE 13G                                      PAGE 5 OF 6

Item 5  Ownership of Five Percent or Less of a Class.

       Not Applicable.

  X    This statement is being filed to report the fact that, as
       of the date of this report, the reporting person(s) has
       (have) ceased to be the beneficial owner of more than five
       percent of the class of securities.

Item 6  Ownership of More than Five Percent on Behalf of Another
        Person

        (1) Price Associates does not serve as custodian of the
            assets of any of its clients; accordingly, in each
            instance only the client or the client's custodian or
            trustee bank has the right to receive dividends paid
            with respect to, and proceeds from the sale of, such
            securities.

            The ultimate power to direct the receipt of dividends
            paid with respect to, and the proceeds from the sale
            of, such securities, is vested in the individual and
            institutional clients which Price Associates serves as
            investment adviser.  Any and all discretionary
            authority which has been delegated to Price Associates
            may be revoked in whole or in part at any time

            Except as may be indicated if this is a joint filing
            with one of the registered investment companies
            sponsored by Price Associates which it also serves as
            investment adviser ("T. Rowe Price Funds"), not more
            than 5% of the class of such securities is owned by
            any one client subject to the investment advice of
            Price Associates.

        (2) With respect to securities owned by any one of the  T.
            Rowe Price Funds, only State Street Bank and Trust
            Company, as custodian for each of such Funds, has the
            right to receive dividends paid with respect to, and
            proceeds from the sale of, such securities.  No other
            person is known to have such right, except that the
            shareholders of each such Fund participate
            proportionately in any dividends and distributions so
            paid.

Item 7  Identification and Classification of the Subsidiary Which
        Acquired the Security Being Reported on By the Parent
        Holding Company.

        Not Applicable.

Item 8  Identification and Classification of Members of the Group.

        Not Applicable.

SCHEDULE 13G
PAGE  6  OF  6

Item 9   Notice of Dissolution of Group.

         Not Applicable.

Item 10  Certification.

         By signing below I (we) certify that, to the best of my
         (our) knowledge and belief, the securities referred to
         above were acquired in the ordinary course of business
         and were not acquired for the purpose of and do not have
         the effect of changing or influencing the control of the
         issuer of such securities and were not acquired in
         connection with or as a participant in any transaction
         having such purpose or effect.  T. Rowe Price
         Associates, Inc. hereby declares and affirms that the
         filing of Schedule 13G shall not be construed as an
         admission that Price Associates is the beneficial owner
         of the securities referred to, which beneficial
         ownership is expressly denied.

                            Signature.

         After reasonable inquiry and to the best of my (our)
         knowledge and belief, I (we) certify that the
         information set forth in this statement is true,
         complete and correct.


Dated: October 8, 2010             Dated: October 8, 2010


T. ROWE PRICE NEW HORIZONS         T. ROWE PRICE ASSOCIATES, INC.
        FUND, INC.


By: /s/ David Oestreicher          By: /s/ David Oestreicher
    David Oestreicher,                David Oestreicher,
    Vice President                    Vice President


Note:    This Schedule 13G, including all exhibits, must be filed
         with the Securities and Exchange Commission, and a copy
         hereof must be sent to the issuer by registered or
         certified mail not later than February 14th following
         the calendar year covered by the statement or within the
         time specified in Rule 13d-1(b)(2), if applicable.

09/30/2010
EXHIBIT A


                            AGREEMENT

                   JOINT FILING OF SCHEDULE 13G


     T. Rowe Price Associates, Inc. (an investment adviser
registered under the Investment Advisers Act of 1940) and T. Rowe
Price New Horizons Fund, Inc., a Maryland corporation, hereby
agree to file jointly the statement on Schedule 13G to which this
Agreement is attached, and any amendments thereto which may be
deemed necessary, pursuant to Regulation 13D-G under the
Securities Exchange Act of 1934.

     It is understood and agreed that each of the parties hereto
is responsible for the timely filing of such statement and any
amendments thereto, and for the completeness and accuracy of the
information concerning such party contained therein, but such
party is not responsible for the completeness or accuracy of
information concerning the other party unless such party knows or
has reason to believe that such information is inaccurate.

     It is understood and agreed that a copy of this Agreement
shall be attached as an exhibit to the statement on Schedule 13G,
and any amendments hereto, filed on behalf of each of the parties
hereto.


Dated: October 8, 2010             Dated: October 8, 2010


T. ROWE PRICE NEW HORIZONS         T. ROWE PRICE ASSOCIATES, INC.
        FUND, INC.


By: /s/ David Oestreicher          By: /s/ David Oestreicher
    David Oestreicher,                David Oestreicher,
    Vice President                    Vice President