Good afternoon and welcome to the Applied Materials’ Earnings Conference Call. During the presentation, all participants will be in listen-only mode. Afterwards, you will be invited to participate in a question-and-answer session. As a reminder, this conference is being recorded today, May 16, 2013. I would now like to turn the conference over to Michael Sullivan, Vice President of Investor Relations. Please go ahead, sir.

Thank you, Kia, and good afternoon. Joining us on the call today are Mike Splinter, our Chairman and CEO; Gary Dickerson, our Company’s President; and Bob Halliday, our Chief Financial Officer. Today we’ll discuss the results for our second quarter ended April 28. Let me remind you that today’s call contains forward-looking statements including the Company’s current view of its markets, industry trends, opportunities, growth strategies, share position, technology, cost structure, profitability and Q3 business outlook. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied and they should be interpreted in that line. Information concerning the risk factors is contained in our Company’s SEC filings including our most recent Form 10-Q. Today’s call also includes non-GAAP adjusted financial measures. Reconciliations to GAAP measures are contained in today’s earnings press release and in our quarterly financial highlights presentation, both of which are available on Investor page of our website at appliedmaterials.com. Before we begin, I’d like to remind you that Applied will hold our 2013 Analyst Day in Santa Clara on Monday July 8, just prior to SEMICON West. Many of you have already signed up to join us and we look forward to seeing you there. If you like additional information about the events, please contact me using the number in today’s earnings press release. And now, I’d like to turn the call over to Mike Splinter.

Thanks, Mike, and good afternoon to everyone on the call today. In our second fiscal quarter, Applied Materials delivered earnings that exceeded the high-end of our outlook. We fulfilled request for accelerated delivery of orders from a number of our semiconductor and display customers, while carefully managing our spending. At this point in the year 2013 is shaking up largely as we have expected. Demand for semiconductor equipment is healthy, utilization at our customers’ factories is steadily increasing, and investment in display is strengthening. Across the company, we are building momentum for profitable growth. Over the past two quarters, we have implemented measures to reduce our overhead costs and have redeployed spending to product development and our customer facing technical teams. These changes are enabling us to strengthen customer collaborations and increased our product development philosophy. We are focusing our R&D investments on key programs that support our strategic priority to increase our share in wafer fab equipment, while making targeted investments in display and other opportunities that expand our total available market. We see further opportunities to reduce our operating expenses and organizational complexity to improve operating margins at current revenue levels and provide significant earnings leverage as volumes increase. I will discuss these opportunities later in the call. Major industry trends are expanding our served available market in place to our strengths in Precision Materials Engineering. We expect to grow our share of wafer fab equipment this year while winning key development tool at record positions that provide a foundation for additional share gains in 2014 and beyond. We are also building momentum in display. Customers are adding capacity and we are seeing stronger order growth. We are significantly increasing our share of the display PVD market, complementing our strong position in CVD. In semiconductor, the mobility trend…

Thanks, Mike, and good afternoon, everyone. As Mike outlined global adoption of mobile devices drives growth in the electronics industry. It is also increasing the speed of innovation within the value chain. Our semiconductor and display customers are striving to provide consumers with more capable mobile products and this is accelerating changes in device technology that are enabled by the Applied Materials’ core strength in precision materials engineering. All of this creates a great environment for us to execute our strategy and drive profitable growth. Today, we are building momentum by strengthening our team and focusing our investments to deliver growth in revenue and operating profit. We are building momentum by increasing share and entering into earlier and deeper collaborations with our largest customers. We are leveraging our strength to help customers make major transistor and memory transition that will happen in 2014 and 2015. And we are building profitable growth in additional segments that will provide significant improvement in our overall operating margins. In order to accelerate the execution of our strategic plans, we are strengthening our organization and business processes. We are aggressively managing our cost to drive improvement in operating margins and taking further steps to reduce overhead expenses. We are actively managing our product portfolio by focusing on our best opportunities and increasing funding for those programs that really moves the needle for our customers and for Applied. In addition, we continue to operate our product development engine to improve our ability to define winning products and increase the velocity of our development process. Our customers are faced with increasingly complex device performance and the old challenges, as they transition to new device technology and new materials. This is driving significant pull from our largest foundry, logic and memory customers for earlier and deeper collaboration on…

Thanks, Gary. I look forward to working with everyone on the call again in my role as the CFO for Applied Materials. I’ve been a part of the Applied team for over a year now, and I’m extremely impressed by the depth of technology and talent we have across the company. I was immediately impressed with Applied’s ability to design and build great products. As a product company, there are three legs on the profitable growth stool. The first leg is the ability to design and build great products. Applied definitely has that ability. What also struck me was the economic power of these products. Applied’s integrated solutions combine superior hardware, chemistry, and process support. The economic value to customers can be great and the economic value of these strong products leveraged off of a common platform is also great for Applied Materials. The second leg of our strategy for profitable growth is the ability to solve customers’ high value problems. I have been increasingly impressed over the last year that our improved internal capability to learn and solve these problems. The increasing ability to understand customers’ high value problems combined with our ability to design incredible products results in a more products that hit the market requirements. As I said before, products that hit the market requirements result in very good businesses for Applied Materials. The third leg of our profitable growth strategy is our ability to fund growth and increase investor returns. We’ve already taken number of actions in recent quarters to redirect spending to fund new product development and strengthen our technical marketing capabilities. These actions include steep reductions in solar spending, our gain integration synergies, the global workforce actions we announced in October and a reprioritization of our R&D projects. We are reinvesting that savings in…

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

Thank you, sir. The first question will come from Terence Whalen with Citi. Terence Whalen – Citigroup Global Markets Inc.: Hi, thanks for taking the question. So, the EES OpEx run rate is targeted to be about $25 million year end. Any sense for where that was this quarter. Thank you.

Yeah, we exited the quarter as I mentioned, at $30 million and it might have been touch over that - the quarter, but we exited 31 going down for the rest of the year. Terence Whalen – Citigroup Global Markets Inc.: And then my follow-up question is on the gross margin side, you said that part of the positive variance in gross margin was due to fewer inventory reserves, can you help us understand going forward whether you see that trend continuing or any insight on gross margin going forward would be helpful? Thank you.

Gross margins are pretty good this quarter. The year-on-year comparison was aided by couple of things. We had some inventory reserves last year and then this year we had a good drop, so we had incremental revenues, which dropped through the gross margin line. If you look at our overall sales and expense and profitability guidance for next quarter, it implies reasonably positive gross margin opportunities next quarter also.

The next question will come from Edwin Mok with Needham & Company. Edwin Mok – Needham & Co. LLC: Hi, thanks for taking my question. So first just in terms of guidance, can you help us directionally how you think about the four segments that you guys have?

I will give it a shot, Edwin. Most are up a little bit, I think our sales will be up somewhat and I think it’s pretty much across the board. Edwin Mok – Needham & Co. LLC: Okay, that’s helpful. How about your booking trends, this quarter your booking was quite a bit about your revenue, but next quarter you’re just guiding to a modest increase in revenue. Does that mean that there is some comp softness in booking or how do you think about that and what are the moving parts between the foundry, logic et cetera?

Edwin, as you know, we don't give the bookings guidance. We continue with the overall CapEx guidance of flat to down 10% as Mike talked about earlier. We're incrementally more optimistic, it’s part of what happens in CapEx, it depends on just a few customers in foundry and memory spending later in the year. So, overall, the key message I think for us is around the transition in transistor technology as Mike talked about earlier. That's the key battleground in mobility and that opportunity in the transistor inflection starting in 2014, also 3D memory, those are extremely positive opportunities for us to grow overall share.

The next question will come from Tim Arcuri with Cowen & Company. Tim M. Arcuri – Cowen & Co. LLC: Hi, a couple of things; first, Bob, just based on the answer you just gave can we assume that revenue in SSG will be up, I know you don't want to talk about bookings, but revenue will be up, is that right?

Yeah, let me give you a little more color than I gave to Edwin. If you look at where the increase is, the increase is more concentrated in SSG and display and less sold in solar and AGS. So of our fix, SSG should do relatively well of the four. Tim M. Arcuri – Cowen & Co. LLC: Great. Okay, thanks. And R&D was up to a record high, I was going back to my model and I couldn't find anything this high. I know that you talked about 450 being less than a $100 million in fiscal 2012, but you haven’t talked about what 450 will be this year. Is the increase due to 450 and maybe you can give us some sense of what the spending will be on 450 during this entire fiscal year? Thanks.

Just as we said last quarter, really no net increase in 450 spending in our current plan. The key focus for us are around these technology transitions in the transistor and 3D memory. Those are big opportunities for us. As Mike talked about, the increase for us is about 25% in the gate-last technology, another 5% to 10% in FinFET technology, about 25% opportunity increase for us in the first generation of NAND Flash technology. So those are the areas where we’re really focused on in terms of our R&D investments.

Yeah, Tim, I’d add to that, we’re seeing really good customer pull right now for the new products that we have in a number of areas. But even in inspection and Etch, which have traditionally been weak for us, customers are really pulling on us to offer new and better solutions as we go through the transistor change to 3D. We have some really good capability there that I think is quite differentiated.

We’re also increasing our investment in application support in the field. In our PDC business, we have the second highest bookings quarter, orders quarter in the history of PDC, and the highest ever orders quarter for our Brightfield business. So we’re making investments in R&D, but we’re also making investments in the field and application support and also focused on earlier and deeper collaborations with customers as they go through these device transitions. Tim M. Arcuri – Cowen & Co. LLC: Thanks, gentlemen.

The next question will come from Krish Sankar with Bank of America Merrill Lynch. Thomas Yeh – Bank of America Merrill Lynch: Hi. This is Thomas Yeh calling in for Krish Sankar. Thanks for taking my questions. Just maybe some more color on the overall order sustainability heading into the second half, qualitatively; you noted order strength driven partially by memory. I was wondering if you saw any pullings related to that and wanted to get your perspective on the first half versus second half and what that might imply for the run rate heading towards the second half?

Hey, Thomas, may be I can start with the market and then let Bob or Gary talk a little bit more specifically about order sustainability. What we are viewing on WFE for the year is that second half will be stronger. We think about 55% 45% range there. If you think about that relative to last year, we said this year that WFE will be flat to down 10%. And year-over-year when you are thinking about that, most of the down is in foundry because of the supply chain changes there. So I think the thing is that foundry is still a major, major part of the overall make up. But in the second half, we are seeing some increase spending from, in particular, memory, primarily from NAND Flash. But we’re also seeing a little bit of pick up in DRAM as there are some supply constrains there with, in particular, mobile DRAM. Thomas Yeh – Bank of America Merrill Lynch: Thank you. And Gary, you mentioned expectations for the total served available market increasing by 25% with the transition to 20 nanometers. Can you highlight which particular product segments within SSG that could provide the most areas of opportunity for you?

Yes, the transistor, as we’ve talked about before, is really the sweet spot for Applied Materials that where we have the strongest positions that includes epi and annealing, the implant business, CDP is actually also an area that’s growing through new transistor technology. So those would be the areas that are going to grow the most and PVD is another one that’s going to grow as we go to next generation transistors.

The next question will come from Jim Covello with Goldman Sachs & Company. Jim Covello – Goldman Sachs & Co.: Great guys, thanks so much for taking the question, I appreciate it. Mike and Gary and Bob, you guys referenced the fact that some of the logic spending is coming down commensurate with some of the weakness in the PC segment. Do you think we felt the brunt of the impact there already, I noticed some of the big logic customers are significantly underspending their stated budgets. Do you think that we’ve seen the worse of that in terms of order or shipment declines or do you think some of that could still impact the second half?

Well, we believe that we have, but of course, we have to be able to see what the trend is like for back-to-school, sales in particular, certainly at this point, utilization is moving up. We expect spending in logic to move up modestly in the second half. And part of the reason we kept our overall WRP forecast flat was that, we saw some increase in foundry spending. We saw pretty much a commensurate decrease in logic spending. That’s our best estimate at the current time, Jim. So that’s kind of where we are. Jim Covello – Goldman Sachs & Co.: That makes a lot of sense. And from my follow-up, you guys have mentioned customer pulls in a number of areas, you specifically talked about, Mike even in some of the areas where you traditionally haven’t had the strength. I’ve heard you guys comment over the last 9, 12 months that some of the greatest pull from customers is in the process diagnostics areas, that’s still kind of number one on the list of where you’re seeing the customer pulls?

Yeah, Jim, as I mentioned, we had our second highest quarter’s quarter in the history of PDC last quarter and our highest ever in wafer infection.

The next question will come from Mahesh Sanganeria with RBC Capital Markets. Mahesh Sanganeria – RBC Capital Markets LLC: Thank you. Thank you very much. Since you’ve been talking about the transistor technology, I have a question on your exposure if I divide the wafer fab equipment into front end of the line and the back end of the line, what’s the overall spending split and how is your exposure different, because you have higher transistor exposure?

I don’t know that. I think one of things that Gary has been alluding to is how fast certain areas are growing for us. And we think the complexity around the transistor is going to grow significantly to be able to make these advanced 3D. There is a huge race to get the FinFET and advance the transistors and logic, there’s a huge race to get the 3D devices and NAND Flash. And I think that’s where we see the big growth or the exposure is growing fast there, I think about 25% in each of those areas. So that’s really also in our sweet spot and our strength area and that’s where we’re also investing a lot of our new R&D dollars there to ensure that we can be there with the solutions our customers need. Mahesh Sanganeria – RBC Capital Markets LLC: And then this – my follow-up is on the OpEx, you said in your next quarter’s OpEx guidance you include one quarter or one week of shutdown, so will the OpEx increase in Q3?

The overall OpEx guidance was $550 million, plus or minus $10 million, which is down from Q2’s $567 million. We get some benefit from the shutdown, but we’re also managing other expenses pretty tightly too. Mahesh Sanganeria – RBC Capital Markets LLC: Okay. Thank you.

Welcome.

The next question will come from Stephen Chin with UBS. Stephen Chin – UBS Securities LLC: Yes, thanks. Maybe a follow-up question, Bob, on the last point about just trying to deliver higher operating margins and higher revenues, just listening to your seven observations, I mean, is it fair to assume this is mostly going to be done from say more efficient OpEx management and maybe less there from higher gross margin since there is going to be three big silicon customers?

I think it’s – I’ll do below the gross – I’ll do the gross margins lines a bit. I think we can efficiency and cost savings on both expense line and the cost of goods line. And I think the opportunity is kind of half and half to be honest with you. I think R&D efficiency is also going to drive the faster product development and to certain extent it will be self funding between efficiency. I think on the gross margin line above that, people sometimes ask me about the question, can you increase your peak operating profit versus say 2011, we did all fairly. So if you look at gross margins and you look at gross margin today we have a few things going in our favor. One, we have good mix between the segments where our future growth will be more incenting versus solar for instance in 2011. Secondly, we will, I think, will drive this cost reduction which I spoke of just a minute go. And thirdly, as we start to get some traction in some of these high value businesses, I think those have favorable pricing components. So actually the gross margins look okay, it’s a combination of mix between segments, some potential mix between products, cost of goods sold reductions and pricing, you commercially negotiate all that stuff. Stephen Chin – UBS Securities LLC: Okay, thanks. But may be a question, Mike, for your early thoughts on 2014 with wafer fab equipment spending yield, even if we assume end market demand for electronics to stay normal with all these silicon technology transitions that you are talking about happen in your 3D since that 20 nanometer, can we assume you’re investing this year for another strong year in wafer fab equipment spend for next year too? Thanks.

Thanks, Steven. I don’t think we really formulated a detailed view on 2014, but maybe just a couple of thoughts. Assuming that let’s say we can have another 30% plus year growth in smartphones and a 50% growth year in tablets, I think the foundry spending is flat to up and maybe up a little bit more than that because of complexity increases in the 20 and 16 nanometer and the push to advance transistors. And then I think we are going to see an investment cycle in NAND Flash, not quite, we don’t precisely have that pegged yet on exactly how the cycle will go, but I think it will certainly start in 2014. So in general, would be a positive view on 2014 and the downside is where is logic spending going to end up. But I would also say relative to where are we investing, we are absolutely focused on these technology transistors, the technology transitions. The transistor is a key battleground in mobility, 3D NAND is also a key battleground. So the opportunities for us are significant and that’s the focus of our R&D dollars.

The next question will come from Satya Kumar with Credit Suisse. Satya Kumar – Credit Suisse Securities (USA) LLC: Thanks for taking my questions. I was wondering if you could give a little bit more color on your estimates or CapEx for the year. You mentioned that’s between $27 billion, I was wondering if you could give us – give some color on the mix between DRAM, NAND, and logic, and specifically, within NAND Flash, I was wondering what part of the spending are you seeing happen in the first half versus the second half?

Sure, thanks, Satya. So first of all, I think one of the big trends is in and around foundry, spending has been quite concentrated as Bob alluded to. And we think in the second half, foundry spending will be roughly flat, but spread out among a wider array of our customers. We think that’s the important factor is, you just started to think about what’s going to happen here in the second half of the year. We think logic spending comes up from reasonably low levels in the first half of the year. And then we’ll see growth in both DRAM and NAND spending, but we don’t think they exceed 25% of the overall wafer fab equipment spend, that’s putting them together, and I think some customers have fundable spending there. so we see positive trends in NAND and mobile DRAMs, so I think it moves up from sub 20 in the first half of the year on memory. Satya Kumar – Credit Suisse Securities (USA) LLC: And Mike, I guess like on NAND, are you seeing much wafer capacity additions in the back half? Do you have an estimate for how much wafer capacity is, that you think is being in NAND Flash this year?

I don’t have a precise estimate, I think there’s still capacity expansion within existing fabs that’s everybody’s first move because 3D NAND isn’t ready yet and I don’t think we’ll see big expansions until we get to 3D NAND. And then as I said, we’ll see a build investment cycle in NAND, but I think most of that’s next year. Satya Kumar – Credit Suisse Securities (USA) LLC: All right. Thank you.

The next question will come from Vishal Shah with Deutsche Bank. Vishal Shah – Deutsche Bank Securities: Yeah, thanks for taking my question. Mike, I just wanted to better understand the mix between 28 and 20 nanometer bookings that you see in the foundry space between the first half and the second half?

Well, the first half is pretty much all 28 nanometer. So we see 20 nanometer starting to pick up in the second half of the year, and still pilot production in the second half of the year. So maybe if you add up across the industry, you get between 25,000 and 50,000 wafers. But I think the key thing is working with customers on those real technology and yield problems as these new technologies get into production, that’s really where our focus is with customers that’s what – why they are calling us and why we are excited about not only the rest of this year, but the subsequent years. It’s very difficult to actually to – customers don’t buy for one generation. So even though – initially go into 28 nanometer production, certainly they are looking forward to what are they going to do in 20 nanometer, 16 nanometer, and that’s actually helping us pull some of our inspection tools, CMP tools and other products into 28 nanometer orders. Vishal Shah – Deutsch Bank Securities: :

First of all, I don’t think we’re seeing anybody slowing down on 20 nanometers or thinking that this is going to be a small note, quite the contrary, they want to get this next generation of shrink in the production quickly, get the yields up, put in the 3D- transistor as quickly as possible. This was a real race and Gary?

Yeah, on PDC, the strongest order, Paul, that we are seeing right now is from foundry and logic customers. Vishal Shah – Deutsch Bank Securities: Thanks, guys.

The next question will come from Jagadish Iyer with Piper Jaffray Jagadish Iyer – Piper Jaffray, Inc.: Thanks for my question. Two questions, first, Gary, you talked the SAM growth on the front end, how much of it will be visible in 2013 and how should we kid of reconcile this with the share gains you alluded earlier in your prepared remarks in the silicon?

I am sorry. Jagadish Iyer – Piper Jaffray, Inc.: I just wanted to find out how should we reconcile this with share gains that Mike alluded in the prepared remarks as you talk about the SAM growth in the front end, how much of it will be visible this year and how should we think about it going forward and then I have a follow up. Please.

So the two major transitions that we are focused on right are the 20 nanometer gate-last transition, that’s going to really be more in 2014, maybe at the end of 2013 and the other one is in 3D memory and certainly that’s more – also more of a 2014 story. Jagadish Iyer – Piper Jaffray, Inc.: Fair enough. And then I think you guys mentioned about the strength in the display segment. Can you help us there whether there is broad-based ordering in the display segment? You did allude to a major Chinese LCD factory coming up, are you seeing any other factories over Gen 8.5 coming up in probably the second half of this year or potentially in the horizon? Thank you.

Jagadish, you asked about factories larger than 8.5? Okay, anyway, I think we’re seeing very strong orders in display right now. We are projecting $800 million for the year, which is doubling over last year. And we are seeing most of the build out from multiple customers in China and no factories above 8.5 at this time. Although, we believe as the TVs get larger above 60 inches and they become a significant part of the overall mix that we will see customers move to Gen 10 and Gen 11.

Thanks, Jagadish.

The next question will come from Mehdi Hosseini with SIG. Mehdi Hosseini – Susquehanna International Group, LLP: Yes, thanks for squeezing me in. Mike, a question for you, you mentioned second half bigger than the first half, you mean shipment and revenue, it doesn’t really say much about booking because due in lack of visibility into spending in 2014, bookings could be down or flat into the second half, correct?

Well, I think that’s unlikely, but I think we are projecting, and when I look at our backlog, I think that’s unlikely. Our backlog has been growing. I think it will grow into the third quarter, but it’s not that far ahead of what we think shipments of revenue will be in the second half of the year especially if our 55-45 second half, first half mix comes out to be relatively accurate. Mehdi Hosseini – Susquehanna International Group, LLP: So I’m confused, are you saying that both revenue and bookings will be up in the October quarter?

Well, I’m not making a projection for October quarter at this point. Just talking with what the information we have today, looking first half, second half, whether – we don’t see a scenario if spending is 55% of the total that bookings would be down in total in the second half. I mean, quarter-to-quarter, there can shifts. Mehdi Hosseini – Susquehanna International Group, LLP: Okay. And one question for Gary, I’m going to ask you what I asked last quarter, you’re talking about the share gain and everything, but can you please explain to me in a simple way other than ASP, what is it that you were doing to enable you to gain market share in a oligopolistic environment? You only have one competitor in each segment, so what is it other than ASP that enables you to go and actually gain market share without giving out much margin?

Yeah, the key thing for us is to focus on the key – high value problems for our customers. If you look at display for instance, this concept applies to all of our different businesses. We’re focused on the key device performance and yield challenges of our customers. So as they go to larger panel sizes and smaller pixels, the particle requirements are increasing from 10 to 100 times to get equivalent yield. So our focus there is on how do we have an architectural advantage that delivers better particles than our competitors. The same thing is true as you go to larger panel sizes. Customers if they had a – if we have a certain uniformity on our product, they can sell the panels into their own brand. If they have a worst uniformity, they go to an OEM brand at a much lower margin. So the leverage in yield and the leverage in device performance for our customer is significant and that is the strategy that we are pursuing that is growing share in the display business today. The same thing is true in the semiconductor business. As our customers move to new transistor technologies, as they move to new 3D memory technologies, these transitions as you go to FinFET or other devices are extremely difficult. They have big challenges in trying to drive time to market for these products and it is the key battleground for our customers in mobility. Our products that enable those transitions in the architectures that’s where we are focused, that’s why we are increasing our R&D spending, that’s why we are increasing the technical support of our customers in the field and that’s the formula at least for me and 30 years in this industry, that’s the same formula I’ve seen work in every one of these different businesses. Mehdi Hosseini – Susquehanna International Group, LLP: So…

Thank you, Mehdi.

We’ve got time for just two more questions please.

The next question will come from Patrick Ho with Stifel, Nicolaus. Patrick J. Ho – Stifel, Nicolaus & Co., Inc.: Thanks a lot. May be just following up on that comments you made about the drag towards 14 nanometers FinFET with the foundries. Customers have talked about accelerating that from 28 through 20 and possibly even skipping some of the 20 and going straight to 14-nanometer FinFET. I guess, how do you rationalize, I guess, what the customers are looking for there? And from what process segments do you see, I guess, an expansion at the 14-nanometer node, is it the same one as 20, or if you see areas like CVD also growing faster than the marketplace?

So the first transition that will make a tangible difference to our growth in share and revenue is really 28-nanometer gate last. And then customers will move to FinFET technologies at 16 and 14 nanometers where there’s still more incremental opportunities for us. The really big areas of focus for us are around the transistor as I talked about earlier with epi, anneal, implant, PVD, and there are more CMP steps as the customers move to FinFET technology. So those are the ones that with these transistor technology changes that there are the real big opportunities for us. I would say also, I talked a little bit about combining the precision films with precision materials removal, material modification, and interface engineering, and we’re certainly seeing more of those types of issues where combining these precision materials engineering technology could provide our customers with a real device performance and yield advantage and also be very positive for Applied Materials as we combine these technologies on our platforms. Patrick J. Ho – Stifel, Nicolaus & Co., Inc.: Great, that’s really helpful. Bob, a question for you on the materials cost reduction that you talked about on the call, is it more of the design phase that you’re going to be working on helping to reduce that front or is it the supply chain or is it a combination of both?

It will be both. We’re going to do both and some of the things we’re going to do to enable both is getting tighter alignment across the organization between operations, the business units, the guys who control the releasing of products to the suppliers. So there is a path to do this., I would say that, we’ll get incremental progress on both and it will be cumulative. The good thing about materials cost reduction as you start to build the momentum, it’s annuity payment, right. You get it every year on equipment, you get it on spare parts. So it’s an annuity payment that every year goes up, you had several points of cost reduction, it’s cumulative over time. Patrick J. Ho – Stifel, Nicolaus & Co., Inc.: Great. Thank you.

You’re welcome.

The next question will come from Ben Pang with B. Riley & Company. Ben Pang – B. Riley & Company: Thanks for squeezing me in, two quick ones; first, relative to the $27 billion to $30 billion you referenced for spending, what’s your served available market for 2013?

Roughly half, it’s 51% or 52% I think of that total. Ben Pang – B. Riley & Company: Okay. And then in terms of the 3D NAND, you mentioned some early shipments, second half of this year, is it easy for the customers to deploy that for planer if they want to or are there significantly different configurations for the tools that they’ve locked in, if they make a decision on 3D NAND right away?

Yeah, the customers that are making those early transitions are really focused on the 3D NAND technology, and they are very different. Some of these steps are very different than what you see in planer NAND. Ben Pang – B. Riley & Company: Thank you very much.

Thanks, Ben. And I appreciate your questions. We’d like to thank everyone for joining us this afternoon. A replay of this call will be available on our website beginning at 5 PM Pacific Time today. And we’d like to thank you for your continued interest in Applied Materials.

Ladies and gentlemen, thank you for participating in today’s conference call. You may now disconnect.