Welcome to the Applied Materials' Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, August 24, 2011. Please note that today's call will contain forward-looking statements, which are all statements other than those of historical fact, including those regarding Applied's performance, economic and industry outlooks, market position, cost controls, capital allocation principles, fourth quarter and fiscal year 2011 business outlooks and the planned merger with Varian. All forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Information concerning these risk factors is contained in today's earnings press release and in the company's SEC filings. Forward-looking statements are based on information as of August 24, 2011, and the company assumes no obligation to update such statements. Today's call also contains non-GAAP financial measures. Reconciliations of the non-GAAP measures to GAAP measures are contained in today's earnings release or in the financial highlights slides, which are on the Investor page of our website at appliedmaterials.com. I would now like to turn the conference over to Michael Sullivan, Vice President of Investor Relations. Please go ahead, sir.

Thank you, Carrie, and good afternoon. Joining me today are Mike Splinter, our Chairman and CEO; George Davis, our Chief Financial Officer; and Joe Sweeney, our General Counsel and Corporate Secretary. Today, we'll discuss the results for our third quarter, which ended on July 31. Our earnings release was issued just after 1:00 p.m. Pacific Time, and you can find a copy on our website at appliedmaterials.com. Also on the website is our quarterly financial highlights presentation, which provides additional details. Mike Splinter will lead off today's call with comments on the business environment along with our results and strategies. Next, George will discuss our financial performance in Q3 and our expectations for the rest of the year. We'll then open the call for your questions. And with that, I'd like to turn the call over to Mike Splinter.

Thanks, Mike, and good afternoon to everyone on the call today. Applied Materials delivered solid third quarter results in an increasingly challenging business environment. We posted revenue of $2.8 billion and an operating margin of 24.5% and non-GAAP earnings per share of $0.35. Over the past 3 months, we've taken a number of important steps towards completing the Varian acquisition. On August 11, Varian shareholders voted to approve the merger, and to date, we have received regulatory clearance from Israel, Germany and Taiwan. We're still awaiting approvals from the U.S. and China. We're committed to closing the transaction, which we now expect to occur in October. We are excited about the opportunities that we will deliver to our customers, shareholders and employees by combining the strengths of these 2 companies. Q3 was another excellent quarter for our solar business, and EES is on track to deliver close to $2 billion of revenue for the year. Overall, I'm pleased with the strong execution demonstrated by all of our businesses during a period of uncertainty in the global economy. In recent weeks, fears about the state of leading economies and slowing growth in Asia have highlighted the fragility of the global recovery. Uncertainties about demand are causing a number of our customers to reassess their investment plans and push out orders. Although we firmly believe that the fundamental growth drivers within our markets remain strong, today, we are seeing a weaker near-term outlook across all of our businesses. Based on our view of the next 2 quarters, we have taken action to ensure our spending remains aligned with our business environment. We are proactively managing our operating expenses and adjusting variable spending. We will continue to invest in new products that are critical to our customers and for our long-term growth of…

Thank you, Mike, and let me add my welcome to everyone on the call today. Applied delivered revenue and earnings at the upper end of our guidance range. We generated $600 million in operating cash flow on strong performance, and issued $1.75 billion in long-term debt to support the Varian acquisition. Our cumulative net sales and earnings per share over the past 4 quarters have been the strongest in the company's history. Orders in the quarter declined by 25% to $2.4 billion, reflecting softening demand across our businesses. Our book-to-bill ratio dipped below 1 for the first time in 7 quarters. Our backlog decreased 16% to $3.2 billion, including negative adjustments of $248 million, primarily from financial de-bookings. These adjustments are made when the expected delivery for an existing order moves beyond our 12-month policy window. Net sales declined 3% to $2.8 billion with higher-than-expected revenue in display and EES, leading us to the higher end of our target range. Non-GAAP gross margin was 42.8%, up 90 basis points led by margin recovery in AGS. Our non-GAAP operating expenses were $510 million. This includes an adjustment in our variable compensation and certain other accruals. Absent these items, our non-GAAP OpEx for the quarter would have been just under our $530 million target. We expect our fourth quarter non-GAAP OpEx to be approximately $510 million. This represents about a $20 million decrease from our current quarterly run rate. In the near term, our primary focus in OpEx is to tighten discretionary spending across the company while preserving our customer-facing programs and critical investments. In managing our cost of goods, we have a highly variable manufacturing structure and reflects our temporary workforce and overtime capacity in response to the rapid dropoff in demand. We plan to use selective factory shutdowns in our…

Thanks, George. And to help us reach as many of you as we can, please ask just one question and no more than one brief follow-up. Carrie, let's please begin.

[Operator Instructions] Your first question comes from Satya Kumar with Crédit Suisse. Farhan Rizvi - Crédit Suisse AG: This is Farhan calling in for Satya. I just wanted to hear your thoughts on DRAM market. What do you see for next year? Micron had a call earlier today and they are seeing continued weakness next year. Can you just comment on that?

I think what we would say is that it really depends on PC growth. So I think PC growth is at the heart of the weakness in DRAM pricing and oversupply during this period and we would have to see PCs get back to more normal double-digit growth than we've -- than we're seeing at the current time. Obviously, prices have been weak. Global DRAM still seems to be quite strong, consistent with the smartphones' and handsets' expansion. So in our frame of reference, DRAM is really weak because of PCs, and until that recovers, we kind of expect the -- a small investment. Technology investments is at a low level. It didn't recover in the second half as we had expected. If you recall earlier in the year, we had projected that DRAM capital spending would come back in the second half of the year. It hasn't come back. It stayed well below $5 billion for the year, which is as low a level as I can remember.

Your next question comes from Jim Covello with Goldman Sachs.

Question is if you can help us understand how much capacity is still in the pipeline to come online at the foundries based on what you shipped maybe last quarter and this quarter to them. So obviously, their wafer starts, and you guys talked about this, aren't growing very fast right now. There's some incremental supply coming online. I'm just trying to get a way to maybe quantitatively think about how much foundry wafer starts have to grow before they would get back to, say, like the 90-ish percent utilization rate level where they would start to order again?

Yes. I think since every different customer has a different timing to production, the best way that I think we can characterize that is that it looks to us like something on the order of 3% utilization dropoff. We're thinking wafer starts are roughly flat quarter-over-quarter, but we'll see utilization dropoff relatively flat demand around 3 points, maybe just below a bit more than that, Jim.

That's helpful. And if I could, for my follow-up, it seems like foundry is pretty low, DRAM's pretty low, NAND is stable because the market there is okay. It seems like if we're worried about they're being another shoe to drop, that would be in microprocessors, is that a fair thought process? And then, how do you feel about that particular segment?

I think we believe that consumer electronics and PCs are at the heart of what's causing the supply demand imbalance here. So there's many factors in microprocessors since there's been a shift to tablets. Here, tablets are still strong. So when you aggregate the numbers, that's probably hard to see in a unit volume, but we may see it in a dollar volume.

Your next question comes from Chris Blansett with JPMorgan. Christopher Blansett - JP Morgan Chase & Co: Mike, I wasn't sure if you're willing to kind of an initial stab at what you think your solar-related CapEx and semi-CapEx will be for next year? I know it's a pretty uncertain time, but how are you thinking about modeling this out for next year?

Semi, actually -- well, I'll say a little bit about semi and then go to solar, since we've kind of been on that topic. We're still -- we still think about the current environment as being pretty healthy, and if we're going to model this particular downturn after one that we've seen in the past, it would likely be the '05. We saw 2 quarters down, and then saw some recovery. We think fundamentally that the products in the marketplace, the innovations that have happened, people really want them. And we're seeing consumer softness today, largely because of the macroeconomics. So if we could get those back on track, I think we could see a recovery in a few quarters. In solar, we're already seeing a recovery in end demand. So the key here, I think, is just how impactful this China feed-in tariff is going to be. Prices have come down. They're at the very low level. You already hear the sell prices add $1 a watt, below $1 a watt, module prices. Spot prices, $1.20, maybe the average is closer to $1.40. But these prices have gotten very low, making the investment pieces quite good. So if the China feed-in tariff really comes in and creates a couple of gigawatts, 2 or 3 gigawatts of demand next year. I think we see a turnaround in capital additions, especially by the major Chinese solar manufacturers. Christopher Blansett - JP Morgan Chase & Co: I guess -- Mike, I guess the question is we're going to see some subsidy cuts in Europe and the U.S. at the end of this year. In you overall view, do we have a volume growth here for solar next year? Basically, will China be able to offset some of the potential subsidy cuts that we're seeing in the Western Hemisphere?

U.S. will go up next year dramatically. Just -- I think it'll, percentage-wise, probably close to as much as this year. And PV is really taking over in the U.S. substituting. We know that these 8 projects now that concentrated solar. PV has been substituted for concentrated solar. Those projects are already approved. I think we're going to see a pretty dramatic growth in the U.S. I don't think we'll see a falloff in Europe. I think the Germans are committed. They are 35% of the market. Don't think we'll see a down year in Europe. I think we'll see an up year. So even though the lowering of the incentives is helpful, it drives the price down. It improves the performance, the economic performance of the installations.

Your next question comes from C.J. Muse with Barclays Capital.

I guess, first question, I was hoping you could discuss the dialogue you've had with foundries over the last month. And I guess I'm particularly interested in what the conversations are like around foundry 28-nanometer spend and when you think that will start to come back?

Sure. Well, one thing for sure. No one is slowing down on technology. We started 28-nanometer. What we're seeing is that because of the underutilization, primarily at 65 nanometers, they are able to reuse an awful lot of equipment for increasing capacity at 28 nanometers. So that's the first thing that I would comment about that conversation. The second thing is we're hearing very robust discussions around 14 -- 20 and 14 nanometers even today and really talking about the capabilities that we're going to need to deliver and deliver the R&D units this year and to production in subsequent years. And so no slowdown on the focus on advanced technologies, C.J. They're very critically focused on what to do next and how to keep the treadmill going.

That's helpful. And then, as my follow-up, your nonsilicon business, it looks like we're tracking to about $1 billion here in your guidance for October. So curious, I think we've come down from around $1.3 bullion, $1.5 billion on a quarterly run rate. Does that $1 billion represent you a trough? Or how should we think about that kind of number?

So I think we still have to see how the solar market plays out. I think you -- the services side of the business, you consider the services side part of the semiconductor, how do you view it?

Yes, yes. I added that in.

Okay, all right. So the -- I think with solar, we'll have to see. We expect orders to be down again this quarter in the solar area, so I think that we haven't guided orders. I think we'll have another down quarter for orders pretty much across the board for the company. And so I'd say Q4 -- it's too early to call our fiscal Q4 at the bottom.

Your next question comes from Timothy Arcuri with Citigroup.

This is Wenge Yang for Tim. The first question is regarding NAND market. In the last couple of days, we've been hearing some customers talking about adding some additional CapEx in the calendar Q4 to increase the NAND capacity beyond their current 2011 plan. I just want to check if you have heard those discussions in the last week. And if so, could you comment on the scale and also the timing of those additional CapEx in the NAND?

Well, I think that we continue to think this market is growing and strong and is pretty much proportional to tablets and adoption of solid state drives and PCs. What a particular customer is exactly doing, I can't really comment precisely, but I would say that this is the one market that is really staying quite strong during when you compare it to the other segments of wafer fab equipment spending.

Yes. I think what you're seeing is their markets are holding up well. We have seen -- our expectation for Q4 both on bookings and revenue is that NAND will be down quarter-over-quarter, fairly substantially and is contributing to the falloff that we're seeing. But there is a much more confident tone around the customer base in terms of spending plans for the next year.

Okay, that's helpful. Just one additional. So your Baccini product has pretty much 100% market share. I just wanted to get your estimate on how much capacities were actually added into the solar manufacturing? And we heard numbers like 40 to 50 gigawatts. If those numbers are true, how does the incoming orders going to look like next year, given the demand is going to remain around 20 gigawatts?

I don't think we would agree with a number in that range in delta. We would say maybe cumulative capacity would be close to that range. But one of the things that's happening right now in the solar market is if you can't reach a certain efficiency, you don't sell your panels. So it essentially takes off line some of the older capacity, so you have to get back to looking at what the overall effective crystalline silicon capacity is. And we're kind of thinking it's more like a 35-or-so gigawatts. And I would also add, you have to think about in the second half of the year, essentially 2/3 of the installations are going to happen, so they have to have capacity plus inventory enough to handle those installations, deliver on those installations.

Your next question comes from Krish Shankar with Bank of America.

This is Paul Thomas for Krish Shankar. George, I just want to ask quickly about 450. You did mention that you thought that you might not reach model levels due to incremental spending on 450. I just wanted to get a little color around that. What kind of spending you think you guys are going to have going forward?

We took a shot at the SEMICON on that. We said it would be at the $100 million range in 2012. I think our focus all year has been on making sure that we're positioned well in our SSG Group. There's a lot going on in the industry right now, and just kind of building on the technology inflection that Mike was talking about just in the foundries, but it really across-the-board with our customers. So our spending has been coming up at this time, even as our volumes, our revenues are coming down a little bit. So we think that the right thing to do in the near term. It certainly impacts the model in the near term, but we think it positions us well for the longer term.

Okay. And maybe just one follow-up on January quarter, you did mention that you were looking at shutdowns also in that quarter. So -- But I imagine you have some flexibility there, but is the expectation then that we're still going to see this sequential declines in January in overall revenue?

Yes, I mean, I think what we're seeing is we're seeing orders -- the order outlook for this quarter to be down again. So it's a little too early to call exactly what the revenue's going to look like in our first fiscal quarter. But clearly, we're still going to be in a period of softness. And so, we're kind of in line with the more, it if there's such a thing as a normal slowdown in our business. It's more in line with that, and our shutdown activity will be reflective of that.

Your next question comes from Stephen Chin with UBS.

Mike, if I could ask -- you mentioned that the shutdown looks more like a normal cyclical shutdown. Or given your weakness in the last 6 weeks, is it more of an early sign of a severe shutdown or slowdown that we saw back in 2008? And if so, what are the leading indicators you would be looking at to gauge for a turnaround?

So we think this is more of a supply-demand slowdown. If you recall, back in 2008, it was really memory dropping off from over -- almost 70% of wafer fab equipment spending down to 20. We're not seeing that kind of situation here. And I don't think we will see that kind of a situation because the end markets have products that people really want. The beginning of mobility, real mobile computing is just happening. But to your question about what are we looking for to see that we're really starting to come out of this, we're looking for stronger consumer demand for PCs, consumer electronics, particularly TVs, that have been very slow this year and pushing out our orders and demand for capacity there. So it needs to be strong enough also. That demand come-back has to be strong enough to diminish the inventory that's been built in this weak back-to-school period. Now, of course, I think our customers have been very good at lowering utilization, managing their inventory. So I don't think that inventory is as big as it's gotten in past times either, which helps us think that this slowdown can be temporary. But then, the final thing is it really is going to be dependent on something not in our control and that's the global economy and whether we're going to get a little movement away from the volatility that we've seen in the last few weeks and get some stabilization there.

Mike, just to clarify, in terms of PC growth, are we looking at double digits? I mean, it sounds that would be a meaningful growth.

That would be a meaningful number that we would get excited about.

Got it. And just a follow-up would be could you share any color on how you are trying to manage through this kind of a downturn in almost all of your segments? Is the goal really to just stay profitable in all the segments? Or you mentioned about some share gains in the solar segment. I just want to see if maybe Applied is trying to be aggressive to gain share during this downturn?

Absolutely. We're staying very focused on our products and our customers. This is the key to moving through this, stay very close to the customers, make sure that our products are adding value in a significant way to those customers. We believe we had some very significant positional wins during the last quarter. I try to itemize a few of those in the semiconductor area. In the solar area, we really think that the key right now is to really focus on developments in areas that are going to add efficiency to existing lines. Those are things that customers are going to buy whether there's upturn or a downturn. So things like our double printing solution, which adds efficiency. We're working on a number of other areas that will add improved efficiency or improved productivity for our customers. And that theme goes in display as well, where I think you know we've been trying to expand our product line in the PVD. But even more significantly in this time period, we've been able to create products for touch panels, for advanced displays because the consumer and the customers are moving to these very advanced displays. So we've been focused on low temperature polysilicon and metal oxide transistors on OLED TV applications. And these are areas where we can gain -- where both our SAM can expand and we can gain share.

Your next question comes from Edwin Mok with Needham & Company. Edwin Mok - Needham & Company, LLC: First question relates to solar. Mike, you mentioned on your prepared remarks that you start to see customer purchasing more equipment for driving increasing efficiency. I was wondering if you can quantify how much of your sales comes from those -- you can almost like quantify a semi-term technology buy versus capacity build? And if all your customers just focused on driving efficiency, what do you think those sales can -- will get to?

Yes. So it's a little bit of a complex answer, but in what we've seen so far from our double printing business since we introduced this product, that's produced over $200 million in revenue and is ramping every quarter. So that's been starting to get quite significant. Other products, I think, we've talked about a selective emitter product and we have other ones I'm not going to talk about at this time until we get significant traction with the customers. But the specific efficiency depends on whether you're using multi-crystalline or single crystal and the techniques often vary there as well. But I would just say that every quarter, we're seeing the peak notch-up of like 0.1 or 0.2 and the distribution of sellable products there. Edwin Mok - Needham & Company, LLC: I see. The $200 million number, just to clarify, that's up to this point? Or is that the last quarter? I'm sure I got the number correct.

Sales up to this point. Edwin Mok - Needham & Company, LLC: Great, very helpful. And then, George, just a question on gross margin. I think the midpoint of your guidances just seems to imply gross margin goes down maybe at 40% or a little below that. I'm just wondering if that was all to do with just lower sales level or is there anything else relating to mix or anything like that related to that, if you can help us on the gross margin line. And how do you look at that beyond the October quarter?

I would say 90% of it is sales volume and heavily impacted by SSG. You've got minor puts and takes on mix in the quarter. And so I think if you follow that line, I think you'll be all right on your estimate.

Your next question comes from Mehdi Hosseini with Susquehanna International Group.

Mike, I'm going to ask you what I asked you during the Analyst Day. Given the structural changes in the PC market, what's going to help your customers to step up and increase your spending next year that -- and what I mean is, DRAM prices are near cash costs. And I just don't see any increased box loading.

Any box -- increased box loading for DRAM?

Yes. And technically, in the past 20, 30 years, when DRAM prices collapsed, then, the elasticity kicks in and box loading goes up. And what I hear from your customers and your customers' customers is that they're reallocating their budget to other areas like display. So we're not seeing any increased box loading. And therefore, I see that as a structural change in the industry that is going to trickle back to [indiscernible] industry?

Yes. I think the first thing is we have to see PC growth. The second thing is box loading still isn't at 4 gigawatts. We know that it's not at 4 gigawatts a box or -- gigabits, box [ph] of bits. But it's not at 4 gigabits per box at this time, and it certainly can get there. And as the new advanced processors come online in the next year or so, can get beyond that. But yes, the money is going in other places on the footprint to the PC. The other factor is -- that's going to drive DRAM growth is mobile DRAM as smartphones continue to grow in double-digit ranges over the next few years, while they're not going to have multiple -- are not going to have 4 gigabits in a smartphone, but there'll be -- the numbers will start get very, very large and push bit growth.

I got it. And my follow-up question has to do with Varian. Given the fact that announcement was made back in the spring when fundamentals were different, when are we going to -- when is the earliest we're going to hear how the integration and the revenue and cost synergies going to impact the P&L?

Sure. Maybe I can comment on what we're seeing as far as getting closed on the Varian agreement and then George can talk about the revenue and cost synergies. So we expect to have our substantial compliance with the Department of Justice done this very soon. We expect Varian to have all of theirs done by September. And we expect approval from the DOJ then, 30 days after that, some time in October.

Yes. And in terms of the financials, we, following close, we'll be talking more fully about that. We certainly are confident that we'll be able to capture the synergies of $50 million to $60 million that we described, and there'll be further opportunities we think as we come together. The fact that things have turned shortly after the deal, we -- our economics on these things are based on a cyclical industry. And so the ability to capture value on this isn't really dependent on your first 3 to 6 months. Whether there's a downturn or not, there's -- we model the fact that there'll be downturns periodically as part of the economics. So we feel very good about the deal and look forward to getting it closed.

Your next question comes from Ben Pang with from Caris & Company. Benedict Pang - Caris & Company: On the cancellations that you guys talked about, the financial cancellations, are they primarily at the SSG Group or other groups are also seeing those types of push-outs or cancellations?

Yes. The vast majority of the de-bookings were financial de-bookings. The cancellations were about 10% of the total. Of that, about 3/4 were SSG, so it's not a big number. Customers are really hesitant to cancel orders. They're concerned that things are going to come back, and if they cancel that they're going to lose their positioning in the slots. Benedict Pang - Caris & Company: Okay. My follow-up is that, in your change in terms of your wafer fab equipment forecast between your call right now and SEMICON West, is it still foundries that's causing you to go down or other applications in the manufacturing -- semiconductor manufacturing?

I think both foundry and DRAM are weaker. And I think if you look at the 6 weeks ago when we made this, there's been a lot that's happened in the macroeconomic environment. Everybody at SEMICON was noting each day, the outlook got more various among the customers that were in attendance there. So there was kind of negative momentum in SEMICON, and then you -- and that was based on a rosier economic outlook than we see today. So I think you have to assume that all customers are affected by the change in the economic outlook. But the big spenders that people were counting on, NAND and foundry, have been more cautious in the near term than people expected.

Your next question comes from Patrick Ho with Stifel, Nicolaus. Patrick Ho - Stifel, Nicolaus & Co., Inc.: Back to DRAM for a second. There's an improvement in the overall PC market, and DRAM content per box. Mike, where do you see the process changes? And which technology node, do you see the [indiscernible] additions occurring because the conversions can't stretch out for another technology node? [Technical Difficulty]

Patrick, I was very having a very difficult time. You were breaking up there. But And maybe I can repeat and you can see if I have it. You're really asking about technology node adoptions in DRAM? Patrick Ho - Stifel, Nicolaus & Co., Inc.: Yes, yes. Maybe just in terms of -- if this is clear, in terms of the [Audio Gap], right now, we're seeing [Audio Gap] process technology [Audio Gap] over the next few nodes. Where do you see, I guess, the inflection point where you need to basically buy new line for capacity addition versus just simple converters?

Yes, I think I got it now. What we think is -- the bit growth has to be above 50% to really drive capacity versus technology conversions. And this year, we're thinking, right now, some place it grows in the mid-40s. As we kind of alluded to earlier, the bytes per box are not increasing at the rate that we'd like to see. Patrick Ho - Stifel, Nicolaus & Co., Inc.: Okay, a follow-up question in terms of gains that you're looking for in SSG, you mentioned it will be flat. I'm assuming part of that is customer mix. What do you need to see next year to see share gains tick [Audio Gap] 2012 in terms of customer mix?

Well, the easiest thing to say will be DRAM coming back in a significant way. But if foundry and DRAM are strong, that's good for us. And if NAND and logic are strong, it's less good for us. Those are kind of the mix aspects, other than, as you know, there's other things going on today like currency and litho taking a bigger overall share of the market.

Your next question comes from Mahesh Sanganeria with RBC Capital Markets.

This is Rick Grasfeder in for Mahesh. First question, what's your estimate of foundry utilizations right now? You mentioned about 90% range, I think earlier. Can you give any more color on that?

We would say in the high 80s, we would not say 90. And of course, it varies by node where most of the underloading is in, we believe, in the 65-nanometer region.

Okay. And looking to 2012, for your WFE, I don't think you've given estimates yet, but any color on which segment you think might pick up first, specifically within SSG, DRAM or foundry? What -- where you might start seeing the pickup and as well in EES as far as -- you mentioned you're starting to see improvements in -- some improvement in that segment, but kind of the timing on when you might see that picking back up again?

Yes. It's certainly too early to make a projection on 2012. But our view has been that memory will be stronger next year and the logic and foundry will be a bit weaker. That's kind of how we've looked at it. We've, of course, projected that DRAM would get stronger in the second half of this year. So that's part of the reason why we're a little hesitant right now to make too much of a projection on 2012 for DRAM because we do believe we have to see that PC growth come back and sustained growth in handsets and communications infrastructure.

Your next question comes from Srini Sundararajan with Oppenheimer. Srinivasan Sundararajan - Oppenheimer & Co. Inc.: This question is for George. Right now, it looks like your OpEx is only down 4%. Your sales might be going down much further than that. So what steps are you going to take to get it in line with the sales as it goes down further in calendar Q4, perhaps?

Yes. As I said, we're taking the steps to reduce discretionary spending in Q4, so we think it will be down at least $20 million in the quarter. We'll -- I would expect if we see another soft quarter as we expect, it'll come down further in the -- in our first fiscal quarter. As I said, we're being very careful on the OpEx spending, particularly in the R&D area not to pull back the throttle, given the number of opportunities that we're working right now, and it's particularly a critical time for positioning. So we'll probably -- you'll see us be a little more careful on that. Now, we're going into this slowdown in a much better shape than we've been historically. We took a lot of actions in '08 and '09. We also have been very careful with our regular full-time headcount, so we've created more variability in our market in our manufacturing and other areas of the company. If you look at our RFTs today, we're about flat with where we were in Q3 '09. So that helps us going into this, but -- so we think we're in a good position going into it. But we're going to be very careful on pulling that too hard on R&D spending here in the first part, which is what you have to do to take it down further than where we're taking it right now. Srinivasan Sundararajan - Oppenheimer & Co. Inc.: One more question. I think this question is for Mike. I just wanted to know what are your plans on LED product. I think you might have been at it for quite some time, and I keep hearing either that it's going to be shut down or it's going to be going forward, so if you could please comment on what are your plans on that growth market, I would appreciate it.

Yes, we didn't prepare to talk much about this today, but we're still excited about this product. We think that we have a system that's differentiated and will add value to our customers. We currently think this market is soft as well as -- because a lot of consumption is dependent on TV growth. So it's an opportune time for us to work with customers and really get them to adopt our technology.

Your next question comes from Gus Richard with Piper Jaffray.

If DRAM growth was 25%, where is DRAM, going forward, sort of on average? Where do you think capital spending for DRAM would be? And I think historically, it's been $7.5 billion, and this year, I think you said it was $5 billion?

I'm sorry, I didn't catch the 25 -- Gus, I didn't get the -- PC, did you say our PC growth was?

No, no, no. It's bit growth, it's DRAM bit growth. Historically, its 40% to 50%, and it comes down to say 25%, 20% to 25%, gets cut in half. What do you think cap spending is for DRAMs going forward?

I don't think it's much different than it is today. All they're doing today is selected technology conversions of their lines. Maybe they could do a few less, but they have to invest in R&D, and you have to invest in the next node. I think the one thing we do know if prices continue to come down and the only way to stay profitable in the DRAM business is to continue on the treadmill driving the cost per bit down. So we think that we're very close to whatever is called maintenance levels of spending.

All right. And then, just as a follow-up. Can you sort of quantify -- clearly, people are going to move to things like technology in the foundry space, so I would expect the announcements within the next year. What sort of revenue opportunity or is there an incremental opportunity for Applied in that kind of conversion that you could -- kind of dollars per fab would be helpful?

Yes, I think we could get you that number after the call in a little more detail because you're going to have to talk about a number of passes and exactly what's included in every -- in different companies' spin sets [ph] . So you have to normalize it a bit.

And we'd like to thank everybody for joining us this afternoon. A replay of our call will be available on our website beginning at 5:00 p.m. Pacific Time today. And we'd like to thank you for your continued interest in Applied Materials.

This concludes today's conference. You may now disconnect.