We establish a positive characteristic analogue of intersection cohomology theory for variations of Hodge structure. It includes: a) the de Rham-Higgs comparison theorem for the intersection de Rham complex; b) the E1-degeneration theorem for the intersection de Rham complex of a periodic de Rham bundle; c) the Kodaira-Saito vanishing theorem for the intersection cohomology groups of a periodic Higgs bundle. These results generalize the decomposition theorem of Deligne-Illusie [DI] and the de Rham-Higgs theorem of Ogus-Vologodsky [OV], the E1-degneration theorem of Deligne-Illusie [DI], Illusie [I90], Faltings [Fa] and the Kodaira-Saito vanishing theorem of Arapura [Ar]. As an application, we give an algebraic proof of the E1-degeneration theorem due to Cattani-Kaplan-Schmid [CKS] and Kashiwara-Kawai [KK], and the vanishing theorem of Saito [Sa] for VHSs of geometric origin. Contents 1. Introduction 2. Intersection λ-complexes 2.1. The construction 2.2. Base change and cohomology 3. De Rham-Higgs comparison theorem 3.1. Homotopy on complexes 3.2. An infinity homotopy for nilpotent Higgs modules 3.3. Cartier isomorphism 4. E 1 -degeneration theorem 4.1. Periodic de Rham bundles 4.2. Intersection adaptedness theorem 4.3. E 1 -degeneration and vanishing theorem 5. Applications 6. Appendix 6.1. Higgs-de Rham ring 6.2. An initial value problem and its solution 6.3. The ∞-homotopy References Bibliography