Good afternoon and welcome to Diodes Incorporated First Quarter 2011 Financial Results Conference Call. (Operator instructions) As a reminder this conference call is being recorded today, Monday, May 9, 2011. I would now like to turn the call to Leanne Sievers of Shelton Group, the investor relations agency for Diodes. Leanne, please go ahead. And please standby. Ladies and gentlemen, please standby for your conference to begin. Leanne Sievers – Investor Relations: Good afternoon and welcome to Diodes’ first quarter 2011 earnings conference call. I am Leanne Sievers, Executive Vice President of Shelton Group, Diodes’ Investor Relations firm. With us today are Diodes' President and CEO, Dr. Keh-Shew Lu; Chief Financial Officer, Rick White; Senior Vice President of Sales and Marketing, Mark King; and Director of Investor Relations, Laura Mehrl. Before I turn the call over to Dr. Lu, I would like to remind our listeners that management's prepared remarks contain forward-looking statements, which are subject to risks and uncertainties and management may make additional forward-looking statements in response to your questions. Therefore, the company claims the protection of the Safe Harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today and therefore, we refer you to a more detailed discussion of the risks and uncertainties in the company's filings with the Securities and Exchange Commission. In addition, any projection as to the company's future performance represent management's estimate as of today, May 9, 2011. Diodes assumes no obligation to update these projections in the future as market conditions may or may not change. Additionally, the company's press release and management statements during this conference call will include discussions of certain measures and financial information in GAAP and non-GAAP terms. Included in the company's press release…

(Operator Instructions) Your first question comes from the like of Steve Smigie with Raymond James. Please proceed. Steve Smigie – Raymond James: Great, thanks a lot. Congratulations guys on another set of solid revenue and EPS numbers. And along those lines, I appreciate the 2Q guidance. I’m just sort of curious with the strength you are seeing here in terms of the design wins, any reason not to think that as we look out September that we wouldn’t also see at least sort of a seasonal September potentially they have been a little bit better as well.

I don’t think that really we have go out that far. I think we are pretty consistent that we thought that the 2011 level will be pretty, pretty solid year for growth, but I think we like to stay focused in on Q2. Steve Smigie – Raymond James: Okay. I apologize it sort of a Q3 question as well, but on the gross margin you part of I think what happened sort of flat gross margin gains here, which you indicated you didn’t have quite utilization levels that you are anticipating due to the people not coming back after Chinese New Year. Since you probably have a full quarter of full utilizing your full quarter, you fully utilized 2Q with that suggested as we look out the Q3 that you might see a little better gross margin Q3 or are there other mix in other issues of offset that.

Well, Steve, you know our strategy is we prefer growth offer just GPM. So, if we have opportunity to grow as soon as the within our motto. You know our motto is above steady is 35%, but we can get above 35%, will go up to grow because most important is gross profit GPM dollar, not GPM percent, okay. So, we don’t really talking about third quarter yet, but if I have opportunity to grow I put full growth. Steve Smigie – Raymond James: Last question, it just with regard to operating expenses I would have thought R&D might have jumped up to 4% or something like that and it came up a little bit, but seems relatively constraint. So, are you guys doing so you are looking to do a pretty job of keeping cost under control there also on the SG&A line. Would we expect do you guys sort of continued to have as a percentage SG&A and R&D maybe flat to slightly down going forward as well.

That’s all which is the motto anyway. You would remember I kept talking about we kept the R&D as the same percentage as revenue grow that SG&A we tried to control, only allow probably half of the growth of the revenue. Therefore at the end, our operational expense, R&D plus SG&A as a percentage will continue going down. I’m very happy with 1Q because 1Q even our revenue go down 1%, we are able to get our operational expense as a percentage continue going down. Steve Smigie – Raymond James: Right, yeah, all right, well congratulations again on the good numbers. Thank you.

Thank you, Steve.

Your next question comes from the line of Shawn Harrison with Longbow Research. Please proceed. Shawn Harrison – Longbow Research: Hi, good evening. Can you hear me well?

Yes, Shawn. Shawn Harrison – Longbow Research: Hi, I wanted to just maybe get your commentary on the pricing environment, through the March quarter end to the June quarter, it seems, I guess, the best way to describe it is somewhat benign, but if you could just talk about the pricing environment, if it's, I guess, less competitive than normal right now.

I would say it’s pretty benign as you said. I think that the regular part of your focused products still remain relatively competitive and I think we’ll see typical ASP declines, I think, in some of the standard products and the more commodity-based products, I think, pricing is quite stable. And depending on the traction of the year might present some opportunities later in the year, increase. Shawn Harrison – Longbow Research: There is a follow-up to that, I guess. You may see a price increase later in the year just because of the tightness in some of these products.

Yeah, I mean, I think some of the commodities are going to be under pressure for some period of time, but again it all depends on how it goes. But, I think they are pretty stable at this point. Shawn Harrison – Longbow Research: Okay. And, I guess, correct me if I’m wrong, but last year it seems that Diodes went, I guess, after market share more than price, and so that would be the expectation going forward, if you are in that type of environment, correct?

Yeah, I mean it depends on how much pressure there is on those commodity devices and where we stand. But we generally are in a position. We put a high value on growth and a high value on capturing share and expanding our business base with customers. So we generally like to have people move to our price. We are not always the lowest price guy out there. We’d rather see the customer move back up to our price, okay, and then accept more share than to be raising prices to our customers all the time. It’s generally not – customers generally don't enjoy that phenomenon too much. Shawn Harrison – Longbow Research: Well, that’s more than fair. And then my follow-up question, I guess, would Diodes be shipping out of inventory again during the June quarter or will you have also the packaging issues fixed, I guess, early enough during the quarter that you don’t have to ship out of inventory again?

Well, at this moment we don't know, okay. In the earlier of the quarter we did some, but we believe we’ll make it up in the May, well, especially in June. So, very difficult to, at this moment, to tell you one way or the other. Shawn Harrison – Longbow Research: I guess, if you make it up in May or June, shouldn’t you see maybe some better overhead absorption because of that or?

Yeah, you are more talking about GPM correct. Shawn Harrison – Longbow Research: Yes, I was trying to get back to that. But, I guess, if you are going to be making it up, you may see a little bit better overhead absorption as you exit the quarter, is that a potential thing?

Don’t forget, at the same time, our cost is growing up to. Gold has start from 1400 at the beginning of 1Q now it’s going to 1580, okay. And I really don't know it would continue of going down. So, number one, gold is a major cause to us, number two, due to the labor shortage we actually raised the salary in China and that China raised, Shanghai raised their minimum salary for operator in, effective April 1st. So, again our second quarter, our cost is going slightly up, at the same time if you take the S&G rate now, we know there is only one direction, okay. And that, so if you take really material, due to the Japan earthquake and tsunami, a lot of building material start heading up. So, if took a lot of cost going up while we tried to maintain our GPM percent models. So that's why we give that kind of guidance. Shawn Harrison – Longbow Research: That’s more than fair. Thank you so mush for taking my questions and congratulations again on the quarter.

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Your next question comes from the line of Harsh Kumar with Morgan Keegan. Please proceed. Harsh Kumar – Morgan Keegan: Lu, Rich, Laura and Mark congratulations on another fantastic quarter. A couple of simple questions. The biggest part of your outperformance in the March quarter relative to your expectations, would you be able to tell us what segment that was in?

The outperformance in, I wasn't sure I understood the question.

Actually, in Europe, Europe is outperformed and Asia is not bad either.

I’d say that we had upsides in some of our major key customers in Asia in Q1 and we had a very strong Europe in Q1. There were a little bit more surprising, you know, the Europe we were a little concerned, but we didn’t think it would be quite strong throughout the quarter as it was and that was a quite good thing. We had some resurgence on the key customer, LED TV that was quite significant and really maybe not even in unit volumes, but in content. So, our content expansion in a few of our major customers helped the quarter significantly.

You're talking about smartphone, you're talking about tablets and you're taking about LED TV all those gave us a much better performance than we expected in 1Q. Harsh Kumar – Morgan Keegan: I got you. Thank you. And then, Dr. Lu, your company is very well run as it is. I was sort of surprised to see OpEx coming down as a percentage of revenues in June a little bit. Where is that going to come from? Any color that you want to give us would be very helpful.

Well, you always (indiscernible) not always do it that way. We are not going to be crazy to hide in people so far our revenue is going up. We just carefully hide in the SG&A. Now, R&D I do not want to constrain it because that’s important for the future, for the operation, we can try to constrain it, the growth a little bit. That's our basic model and I'm glad we are able to perform according to our (indiscernible) model. Harsh Kumar – Morgan Keegan: Okay, got it. Thank you. And then last question from me. You said a lot of new design wins, Dr. Lu and Mark. What area of products are you seeing most traction in?

Yeah, I tell you one of the most exciting areas that’s relatively new that we are expanding our product line in and the customer base is very interested is our MOSFET product. I mean everybody wants to see the MOSFET. So, I think that’s going to be a very, very strong revenue driver going forward, seeing a lot of action, beginning action in our high volulme logic, okay. I think our USB switches as I mentioned are going quite well. But I think it’s relatively broad based. I think our position in our customers is quite strong and they are looking at our products across the board. Harsh Kumar – Morgan Keegan: Got it. Great job.

The key thing is we are able to grow the content of our customer application. Harsh Kumar – Morgan Keegan: Fair enough. Great congratulations, guys. Thank you.

Thank you.

Thanks.

Your next question comes from the line of Suji De Silva with ThinkEquity. Suji De Silva – ThinkEquity: Hi guys. Nice job on the quarter. Following up on the last question, can you talk about the second quarter and whether any end market you expect to grow stronger relative to your guidance and maybe some that are a little slower perhaps?

I really don’t have that in front of me. I think its going to be hard. I think we are going to have continued momentum in pretty much of the same areas. I think we have had some resurgence in queue. We will see some resurgence in Q2 in North America and relative stability in Europe and I think might we see a little bit of improvement in notebook that might help the overall thing. But I think our general momentum is in the same customer base. Our focus is there so that’s where we would expect to grow. Suji De Silva – ThinkEquity: Okay, great. And then switching to the events in Japan, did you have any impact in the first quarter on your revenue, positive or negative? And then perhaps in the guidance from the events in Japan or was it immaterial?

I don’t really think that we had – I think we’ll see and I think the industry will see some long-term effects from the Japan regarding cost. I think that we’re going to see some cost issues. I don’t think it will be isolated to us over a period of time. I do think that there was some short-term excitement that might have been run. Actually probably the Japanese semiconductor companies actually got ran up the most, because everybody bought out the stock that was there that they didn’t have. I think it showed some opportunity for entry in certain customers that were heavily Japanese-based, because they had some concerns long-term, but I don’t think any short-term there was not anything significant from a short-term perspective that affected the quarter. Suji De Silva – ThinkEquity: And last question, with the labor shortages, Dr. Lu, are the lead times expanding there? And are you having trouble keeping customers comfortable with the availability or is that a non-issue despite the labor shortage? Thanks.

Again I took this one from him too, but again, we kind of look at lead time as a decision, okay, so we use channel and we use some of our contract business to adjust for our key customers. So, we may not enough product overall, but generally we have the ability to keep our key customers happy through these periods. So, we move things around and we keep the inventories and the hubs tight and we get through them as we grow that, bring our units up. Suji De Silva – ThinkEquity: Fair enough, thanks.

Your next question comes from the line of Vijay Rakesh with Stern Agee. Please proceed. Vijay Rakesh – Stern Agee: Hey, hi guys. Just Dr. Lu, you mentioned the focus on gross profit operating dollars, so would you still in a plan on keeping at least the gross margin at the 35% level or would you let it come down as you focus on the operating margins? Hello?

I think I would have kept the same is I’m not really tried to just continue bring the GPM percent. Okay, in our business model is we as long as GPM dollar, gross profit going up that’s what we are going after. And at the end that’s really the effect of earnings per share not the GPM percent. And therefore, if I see the opportunity to gain the market share to grow it, then we’ll take it. Vijay Rakesh – Stern Agee: Okay.

Yeah. Vijay Rakesh – Stern Agee: Got it. Also obviously it looks like, when you look at the challenges, there’s a little bit of concern there might be second quarter things are slowing down, how is the usual point of sales and point of purchase, how is that trending now in April and May now that you’re almost in May here?

Well, in our guidance, we took that into consideration. We actually see the POS and the POP trending positively in the second quarter. And I think it looks good. I think there might even haven’t really figured out where the inventory is going to be. I don’t think there is going to be a significant value change in the inventory in Q2. Vijay Rakesh – Stern Agee: And lastly, go ahead.

Sorry, you go ahead. Vijay Rakesh – Stern Agee: And lastly, when you look at the last question here, if you look at your revenues by PCs, handsets and TVs, can you approximately give us what percentage kind of runs into those markets?

No, really we focus on the major segment. So, if you look at – I don’t have the exact figures in front of me, I can look then up, but obviously our two biggest segments are computer and consumer. We’ve never really reported by end equipment specifically and I don’t have that data and I’m not sure, yeah, just I’m trying to find the page…

Yeah, I have it here.

Okay, so yeah, so consumer represented roughly 31% in the quarter, computing 28%, industrial is about 20%, communications 17%, and automotive actually reached 4% in the quarter for the first time. So within those segments we really don’t break it out that closely. Vijay Rakesh – Stern Agee: Got it. Thanks a lot guys. Good job.

Thanks.

Thank you.

Your next question comes from the line of John Vinh with Collins Stewart. Please proceed. John Vinh – Collins Stewart: Hi, congrats on a nice quarter.

Thank you, John. John Vinh – Collins Stewart: Yeah, first question, hey, Mark, you had mentioned that in reaction to some of the disruptions you've had in some of your customers or some of the distris are reacting and holding more inventory. Can you comment on what are your distris, where are your distris at in terms of inventories and where do they want to be at this point?

I think, I mentioned in the script that we’re right at about three months globally. Okay, so I would say that, I think our distri inventory is clean around the world. I think we’re starting to see some interest in bringing the inventory up a little bit in North America. I think Europe, I think, will balance for a quarter and Asia depending on the strength of the POP, I mean of the POS could come down a little bit, could stay flattish, but I wouldn't expect it to go up. So, I think everybody is in pretty good shape there and I think we’re happy. I don’t think that anybody is over inventoried at this point. John Vinh – Collins Stewart: Okay, that’s helpful. And then just a followup question, I think you had mentioned that near-term not a major impact either way on Japan on your business. What about over the longer-term? Are there design activities and opportunities for you to gain share over the longer-term because obviously some of your competitors in Japan obviously had some significant impacts over there.

Yean, I think there is a lot of opportunity, I think there is a lot of concerns. Whenever, I think, there's a major disruption, people even maybe even overreact. Okay, so clearly whether it was people that were sole-sourced on Japanese products that became very obvious to them when they have a threat then a purchasing organization gets hammered by their boss, saying, how could you ever put me in that position that opens up opportunity. And I think all of these, as much I hate to say that, I mean, Diodes Inc., strength in the past has always been to capitalize on situations to help customers through these issues and I think we’ll continue to do that going forward. In the short run it’s very hard to monetize that, but I expect to see continued opportunity as people review their vendor base. John Vinh – Collins Stewart: Okay. Is it fair to say that we could start seeing some of that start to show up at the margin, in your revenues in the second half of the year at this point?

I would just stick with our traditional business models and work that way. I wouldn't try to over think that, okay. Hopefully, we can get an extra boost and come up with some better guidance in a later quarter or something. But I don’t think you should try to monetize that at this point. John Vinh – Collins Stewart: Okay, thank you.

Your next question comes from the line of Christopher Longiaru with Sidoti & Company. Please proceed. Christopher Longiaru – Sidoti & Company: Hey, guys, congratulations on the quarter and the guidance.

Thank you, Christopher. Christopher Longiaru – Sidoti & Company: So my question is you have all these new products that you're ramping. Are these going to start to contribute to revenue in the typical timeframe? When do you expect these to start to add? And then are these higher in terms of gross profit and gross margin than some other products? Can you give us some idea of how that's going to affect your mix going forward?

I think the ramp time for some of these products is very diverse. I mean some of these products we’re designing in and shipping them three weeks later, okay, to some pretty major customers. And some of our revenue in Q1 was at the sake of POP that we would have normally positioned certain products or our assembly business, so that we could ramp those products. I would say that traditionally our new products are higher margin than our old products, but the margin for Diodes, the manufacturing margin is the major portion of our business. So it’s a little bit more complex to down to that margin percentage. Clearly, if we’re in a very prime mix and our operations are running at ultimately efficiencies, our margins are going to go up. So I think as we get through this period, I think you can, you make your own assumptions. But I hope that answers the question.

Operational efficiency will be improved, we know that. The only problem I cannot control is the cost, okay, because just like you, I don’t think people can guess what will be the guess, the OREO price and I cannot guess, what will be the gold write price – the gold price. Again, our vendor take opportunity to guess wafer price, different price, more compound. They have allowed us the traditionally you going to expect going down every quarter due to the volume, but this earthquake through the curve, that curve awake and so, we really very difficult to predict. Christopher Longiaru – Sidoti & Company: Got you.

My job is try to keep it above our business model as much as I can. Christopher Longiaru – Sidoti & Company: Got it. Thank you, guys. It’s very helpful. Thanks.

Thank you.

Your next question comes from the line of Stephen Chin with UBS. Please proceed. Stephen Chin – UBS: Yes, thanks for taking my questions and let me also add the congratulations on the strong results and guidance.

Thank you, Steve. Stephen Chin – UBS: My first question is just to touch upon inventories one more time. I know a lot of good discussions already happened. But I just wanted to see if there’s any additional color that you can offer on some different segments or, sorry, different geographies, if there are any particular product types, whether it’s discrete or analogs that might be tighter in terms of the balance between those two? Again I understand that overall your inventories are clean, but just wondering if there's any tightness or any excess of one type of product or the other in the three major geographies.

I don’t think we really, I think there is one area that’s really, really tight and that’s SOT-23. I mean I think the industry is short on SOT-23. And it's funny the price doesn’t really want to go up, but nobody can get enough. Okay, so everybody is just getting enough. So I think in those areas, that’s an area where we’re very, very short everywhere. Okay, I think outside of that everything is relatively balanced and I don't think there's – if there is no market for it right now in a situation like that that we build what there is a market for so. I don't think we’re creating much inventory on items that are slow. So, I think, I don’t think that there is in the industry, when I think our industry today is that packaging isn't as abundant as it once was because some of the broadliners don't continue to invest in their packaging. So when business is relatively good, packaging is tight. So I don't think you'll see a lot of people just building stuff that’s not out there. So I don't think that there's anyway to isolate it, but I would say SOT-23 is our, there would be a shortage there.

And where to invest the low GPM?

And that’s the low GPM. So, we consider that mostly a service business. So we have a certain amount of customers that we have to support on a certain amount of that to get them to work with us on other product lines. Christopher Longiaru – Sidoti & Company: Okay, I understand. And one other question for you Mark, in terms of the new design wins that you were referencing to earlier, are those largely centered on new products that you've introduced over the past year or two or is there a good amount of that also centered on more mature product lines, if not commodities?

I would say some of the best design wins we’ve had are either reconfigure Asian of an older product in a new package or in a new size or maybe with a slightly different spec or a brand-new product. Okay, I mean some of those things like when I talked about the 10006 MOSFET those are relatively simple products, but have very, very good specifications and a very, very small package and their acceptance has been very, very high, so, and the revenue. So I think that it's a combination of both, but I would say it’s more towards the new product area. Christopher Longiaru – Sidoti & Company: Okay, great. Last question, just looking at overall industrial and automotive demand trends and obviously that's continuing to be quite healthy in the first half of this year. And looking at the modest change in your overall sales mix with auto reaching 4%, as you said, I was wondering if your sort of cost structure behind those products that you sell into industrial and automotive, if they're sort of the long lead time, long qualification and development cycle type product that's typical of your competitors or is this a different type or more of your traditional computing and consumer type products, but just happen to be selling into the automotive and industrial vertical? Thanks.

I would say both. Some of the products, I mean, we’re definitely an Asian centric new product developing company, but we definitely look at how we can fit those and configure those for our other markets in North America and Europe. The key difference is the design cycle for automotive is....

Very long.

Yeah, yeah, very, very long. And the design cycle for industrial is also quite long, but the lifecycle is also quite good too. So, sometimes we have to show a little patience, okay, and try to do that thing. But if we see a good solid opportunity, develop product in the industrial cycle, we are doing that. And we’re seeing a lot with our SBR products in adapter and in power supply. Those are very key opportunities for our product line that are maybe not so consumer-based and so on.

And some of the Zetex products.

Yeah, well, all of the Zetex products is very centered around industrial and automotive and we as a company are going to try to expand our marketplace in auto over time, but it may never keep up with our growth in the consumer and computer segments have been very hard to get to 4% and it may not stay there. Europe was very, very strong in the quarter. That’s probably why we drove to 4% in automotive, so was the solid quarter in automotive because of Europe.

Now, but overall, if you look at quarter-after-quarter, our industrial plus automotive is above one quarter of our revenue, even we grow very rapidly in the [Swadeshi] consumer computer communication in Asia, but at the same time, our industrial and automotive, it’s seeing a rate.

So, did that get it for you? Christopher Longiaru – Sidoti & Company: Yes, thanks a lot for all the color and congratulations once again.

Thank you.

Thank you.

Your next question comes from the line of Brian Piccioni with BMO Capital Markets. Please proceed. Brian Piccioni – BMO Capital Markets: Thank you and congratulations on great results again. Of course, most of my questions would have been asked and answered, so I have a small amount of trivia. There is an other amount of $534,000 on the income statement, but that’s not taken out of your non-GAAP results. What is that amount?

Rick, you might need to answer that.

Yeah, I think that’s rate of exchange. Brian Piccioni – BMO Capital Markets: Okay, so…

That’s one of the non-GAAP things that we just leave in. Brian Piccioni – BMO Capital Markets: Okay, all right. And there is lot of questions, obviously, been asked about pricing of various things. And, of course, you’ve been working to replace gold bonding wire. Recently I’ve heard some companies make comments, and you might have been alluding to them a little bit earlier with your SOT-23 comments, but that lead frames are starting to reflect the increased price of the materials that go into that. Are you seeing an impact from that or is it relatively modest relative to the other things that you’re having to deal with?

Well, exactly, you hit the point. I think earlier, I said gold wire, I said wafer and another one I do say is lead frame. Actually, lead frame, a lot of lead frame is supplied from Japan and due to this earthquake they issue a tech opportunity to raise the price on the lead frame. So, lead frame is one and that’s another thing we’re talking about SOT-23, yes, we know labor shortage. And do we want to spend a lot of capacity for that? No, I’m not going to spend a lot of capacity for it. We use that to be able to support our key customers, and therefore, we can gain business from some other packaging, but you’re right lead frame is one of the key costs. Brian Piccioni – BMO Capital Markets: Okay. And one of the things that’s been alluded to as well in prior conference calls is there is a risk that if we can imagine a hypothetical Korean TV manufacturer, for example, may have a television that's sitting and waiting for a single sourced component out of Japan. And as a result, in this hypothetical scenario, because they can't fill in the kit, begin to perhaps postpone orders or whatever. Do you have any visibility in that regard or do you just think that's an unlikely scenario?

I think that is the worst scenario that people start to think about when they think about the situation in Japan. So far we haven’t seen that occur. I think there has been a significant amount of scrambling by the world by customers to make sure that it didn’t happen and I think that there has been a lot of resolution to some of these problems on raw materials and so forth. Actually the response in Japan took key chemicals and key raw materials has been quite good and the company that had total losses came to a agreements to work with other companies in Japan outside of that area very quickly. So, I think actually industry and had responded quite well and I think that we don’t see signs that is going to occur. Brian Piccioni – BMO Capital Markets: Okay, great. Thank you very much.

Your question comes from the line of Ramesh Misra with Brigantine Advisors. Please proceed. Ramesh Misra – Brigantine Advisors: Good afternoon, folks. Good job in the quarter. First question for you, Rick, were there any key issues that altering the accounts receivable in the quarter that jumped up pretty significantly?

No, the basic reason is, it jumped out was that because of the Chinese New Year, the January and February numbers were down, the revenues was down and so we did a big March so it just hadn’t been collected yet, but no big issues there. Ramesh Misra – Brigantine Advisors: Okay. In the CapEx guidance that you issued, you excluded Chengdu. How should we be thinking of Chengdu expenditure? And did you have a number for the Chengdu CapEx in Q1?

We have the number was less than $1 million for Chengdu was small because we just put together workshop over there. Going forward the reason we have taken it out is that there is no revenue out of Chengdu yet and so to have our model at 10% to 12% comparable to what we are actually spending on the rest of the business that’s generating revenue that’s the reason we taken it out. Now I would assume that in the second half we will start getting revenue and we will start looking at including some Chengdu CapEx. The issue is that we are going to have to spend some amount of money on site development, building the first set of buildings and you are not going to get any output of that for 12 to 18 months. So, we are trying to make the numbers that we are showing the public comparable from a time period to time period standpoint. Ramesh Misra – Brigantine Advisors: Okay. Then Mark or Dr. Lu, there has been some concern about disruptions in the automotive market. What are your thoughts going forward over there? Do you anticipate any of that impacting you or do you feel you're pretty immune to it based upon your customer exposure?

I don’t think we are qualified to make a big judgment on that as a percentage of revenue. It looks like our customer forecast are still coming in pretty good and we have relatively there most of the people’s problems are in raw materials. Our is mostly European based so there are European cars. Again it’s one of those things, where we just really haven’t seen a big sign that’s going to occur yet. But I know there is going to be some issues on the Japanese car I just haven’t seen one of that impacted us as of yet. It’s a good thing that it’s not 20% of our business. Ramesh Misra –Brigantine Advisors: Okay, great. That’s it from me. Thanks very much.

Thank you.

Our final question comes from the line of Gary Mobley with The Benchmark. Please proceed. Gary Mobley – The Benchmark: Hi, guys. I was able to sneak my questions in. Regarding the gross margin you mentioned some labor shortages. Did that lead to a greater percentage of your revenue coming from products that are resold from other suppliers such as Lite-On? And then, as well, second part to the question, how much of an increase in wages are we talking about here for some of your employees based at your China packaging facility?

Okay. Let's talk about the wage first. Actually, we are talking about the minimum wage, so not majority. Well, not the high pay employee, okay. We are more talking about the low end of our operator. But when you raise the low end operator then you still need to raise TAM on the high end of the operator. So the data between each range may not be what we shoot, but you still need to relatively move everybody up. It just the low end move more, the high end move less. And for us I think we already fleck. We actually take action in February 1st, so half of the first quarter get affected and then 100% of the second quarter will be affected. And so that is already flecked to our GPM guidance, okay. Yes, Shanghai raised minimum salary, but virtually we raised more so we are able to meet their minimum requirement and that way we can keep the good people and keep our worker there. And what’s the other question. Gary Mobley – The Benchmark: Percentage of your revenue derived from resold products in this quarter and as well, looking into your second quarter?

I don’t think there was any different in any other quarter and I don’t think we really reported that. Gary Mobley – The Benchmark: All right great. Thank you, guys.

Okay.

And at this time, I would like to turn the call back over to Dr. Lu for closing remarks.