Good afternoon, my name is Allie and I’ll be your conference operator today. At this time I would like to welcome everyone to Lattice Semiconductor’s First Quarter 2011 Conference Call. All lines have been placed on mute to prevent any background noise. After this speaker’s remarks there will be a question and answer session. (Operator Instructions). I would now like to turn the conference over to your host Mr. David Pasquale of Global IR Partners. Sir, you may begin your conference.

Thank you, Operator. Welcome, everyone to Lattice Semiconductor’s First Quarter 2011 Results Conference Call. Joining us from the company today are Mr. Darin G. Billerbeck, the company’s President and CEO, and Mr. Joseph Bedewi, Lattice’s Chief Financial Officer. Both executives will be available for Q&A after the prepared comments. If you have not yet received a copy of today’s results release, please e-mail Global IR Partners using lscc@globalirpartners.com or you can get a copy of the release off of the Investor Relations section of Lattice Semiconductor’s website. Before we begin the formal remarks, I’ll review the Safe Harbor statement. It is our intention that this call will comply with the requirements of SEC Regulation FD. This call includes and constitutes the Company’s official guidance for the second quarter of fiscal 2012. If at any such time after this call we communicate any material changes to this guidance, we intend that such updates will be done using a public forum such as a press release or publicly-announced conference call. The matters that we discuss today, other than historical information, including forward-looking statements relating to our future financial performance and other performance expectations. Investors are cautioned that forward-looking statements are neither promises nor guarantees. They involve risks and uncertainties that may cause actual results to differ materially from those projected in the forward-looking statements. Some of those risks and uncertainties are detailed in our filings with the Securities and Exchange Commission including our fiscal year 2010 Form 10-K filled on March 11 in our quarterly reports on Form 10-Q. The company disclaims any obligation of publicly update or revised any such forward-looking statements to reflects events or circumstances that occur after this call. Our prepared remarks also will be presented within the requirement of SEC Regulation G regarding generally accepted accounting principles for GAAP. I would like to now turn the call over to Mr. Darin Billerbeck. Please go ahead, sir.

Thank you, David. And thanks to everybody for joining us on the call today. The first quarter developed generally as we expected to. There were no major surprises in our core market or geographies although distribution continues to be weak. We saw varying degrees of order strength on customer by customer basis. All the inventory level and those of our distributors remained healthy. Our backlog improved through the quarter as we began to see increased sales activities for Q2 and beyond. The backlog improvement aligned with the industry expectation for a stronger second half of the year. In terms of Q1 revenue was $71.7 million of 2.2% of Q4. This is in line with our prior guidance reflecting a softening of demand and worldwide distribution. Gross margin was at the low end of our guidance reflecting customer mixture, lower revenue and SiliconBlue acquisition cost, which combined offset our prior restructuring effort. In terms of key accomplishments in the quarter we substantially completed the integration of our SiliconBlue acquisition. We began marketing our new latest ECT4 and ice product line and expanded our traction of ECP3, which added support for video cameras and 3G applications. In addition we attained meaningful traction with market shipment. With regards SiliconBlue we now have innovative sales operations and R&D teams. Customers can (inaudible) order iCE products through any later sales person rep or distribution channel. Culturally, the integration process has been a very positive experience for our employees as everyone has worked together to take the best from both companies. Overall, we are highly pleased with our progress of our integration team and their ability to execute to our 100-day integration plan. On the new product front, we are excited about our ECP4 launch. Given the success of our award winning ECP3 product, we have…

Hey, thanks, Darin. As noted earlier revenue for the first quarter was $71.7 million, an increase of 2.2% from prior quarter and a decrease of 13.3% from the year ago period. Gross margin for Q1 was at the low end of our original guidance at 55.1% compared to 57.7% in the prior quarter and 60% in the year-ago period. The decline was driven by customer revenue mix and impact from the integration of SiliconBlue. Total operating expenses for the fourth quarter came in at $39.3 million in line with our guidance for the quarter. First quarter 2012 financial results included approximately $0.5 million of restructuring related charges as compared to $1.1 million of restructuring related charges included in the fourth quarter of 2011. First quarter 2012 results include approximately $1.7 million of acquisition related costs compared to $0.5 million in the fourth quarter of 2011. Q1 spending for acquisition related costs was higher due to onetime charges associated with the integration of SiliconBlue related to severance costs and a full quarter of intangible asset amortization. Q1 and Q2 of 2012 were impacted by our ongoing integration of SiliconBlue and our finalization of operations movement to our low cost side in the Philippines. We expect to see benefits from the integration and restructuring in the second half of 2012 as OpEx is projected to decline by $1 million to $2 million. We continue to aggressively manage operational spending in order to optimize product introduction and leverage our low cost structures. Q1 net loss was $7.7 million or $0.07 per basic and diluted share as compared to net income of $40.9 million or $0.34 per diluted share in the fourth quarter and compared to $10.9 million or $0.09 per diluted share in the year ago period. The impact of our tax provision…

Thank you, Joe. In summary, Lattice continues to execute on our business strategy. We’re confident that our existing products and R&D strategy are lying with our customers and our core market. At the same time, we’re fully committed to lowering OpEx and further improving our organizational efficiency. We’re optimistic about our growth prospects and expect the stronger second half of the year. Let me now turn to our second quarter 2012 expectations. We expect revenues to be approximately flat to up 4% as compared to Q1. Q2 gross margins are expected to be approximately 55% plus or minus 1 point. Total operating expenses are expected to be approximately $39.5 million including approximately $1 million in acquisition related expenses. That concludes our prepared remarks. Operator, we’ll now be happy to take any questions.

(Operator Instructions) And your first question comes from the line of Tristan Gerra. Tristan Gerra – Tristan Gerra: Hi, good afternoon. The $1 million to $2 million decline in OpEx that you’re assuming for Q4 is that of Q1 level or of the Q2 guidance level?

It’s of the Q1 levels. Tristan Gerra – Tristan Gerra: Okay.

We’re in the same ballpark, we’re $39.5 million in Q2, we’re $39.3 million in Q1. Tristan Gerra – Tristan Gerra: So, if we look at your OpEx trend that you’ve been building in anticipation of top line ramp, your OpEx is – and that’s of the Q2 guidance which I understand is the peak for the year, but your OpEx is up about 22% versus levels of three years ago, yet the midpoint of the guidance for Q2 about a 5% decline versus two years ago. At what point if the macro environment remains weak, do you decide to perhaps reduce OpEx a little bit more aggressively than what you’re currently planning?

Tristan, that’s a really good question. It’s something we’re looking at very closely as we speak. So, if we’re not heading back towards your $80 million kind of quarter end growth rate then we have to really reconsider that. And I think that’s the number that we’re kind of using as guidance as we focus looking forward. Tristan Gerra – Tristan Gerra: Okay. And then if I look at your consumer segment actually in notebooks would you expect stable market share this year? How should I look at that segment of the business over the next couple of quarters relative to what you’ve been shipping over the past several quarters?

Yeah, I think we’re going to see that, it’s barely stable throughout the second half of the year. We don’t anticipate any large changes of that particular segment. Tristan Gerra – Tristan Gerra: Okay, great. Thank you.

(Operator Instructions) Your next question comes from the line of Ian Ing.

Thanks for taking my question. It seems like what’s driving gross margin here is a downtick in the industrial and distributed customers and also SiliconBlue ramping at 65-nanometer. Could you talk a bit about the timeframe for those who had become potentially less meaningful?

That’s absolutely true. We’re seeing the conversion to 40-nanometer now, so, it is moved a little slower than we anticipated, we still have customers over supporting on 65, but we’re moving aggressively to that 40 nanometer for SiliconBlue. On the industrial side, we expect industrials to kind of stay where they are. We don’t see much growth coming from industrials. We do see cost reductions coming into play going forward in Q3 and Q4 for projects and programs that we already have in place. So, as we move folks on our op side to Asia, which we’ve already done, you’ll start to see that as inventory leads out, you’ll start to see cost reductions that’ll impact costs as well as some cost reductions on parts moving from whole roll over.

Yeah. I noticed, you concluded your relationship with Avnet end of last year, so do you think the Q4 last year was somehow more favorable for industrial, is that a possibility that the sequential expenditures?

Probably not. I think industrial is a lot more European focused than anything. We defined this because Europeans typically lag some of the indicators. I think they’re going to be down at least – I would imagine through the first couple quarters and then they’ll recover but there’s lot going on in Europe as you know with the financial crisis with Greece and now with Spain. So, who knows but it can’t – we don’t expect to get any worse. I think the key question is when it recovers?

Okay, and my follow-up is can you competing down and I think you got a nice North American OEM, some server exposure there (inaudible) made functions. Perhaps talk about what striving that, I mean is that slot could intact and are you exposed with the service cycle?

Yeah, actually more than one, there’s a couple different flags. I think the market itself is down. It was down in general and so we’re down in both customers that we serve, we would expect that to come back.

Okay, thanks.

Your next question comes from Richard Shannon.

Yes, I’d love to get your sense of – and Darin maybe I missed this in your very first comments about distribution, why it was weak, can you discuss that a little bit. I don’t know if it was purely just a geographical thing or if you can just help us understand that a little bit better?

No, it was actually more than one geography. Yes, that you’d have customer-by-customer growth in certain geographies that might cover that as a geography basis, but distribution overall for us was actually lower than Q4 and the question really becomes an overall business you saw some of our competitors have the same issue in the month of March and this is kind of dismal, but we did get some kickback at the end. So, we feel a little bit better about what we saw and as we mentioned before that the backlog was actually starting to feel better coming into Q1 than it was in Q4. Q4 a lot of things were being pushed out and in Q1 we’re starting to see orders pull in. So, that gives a little bit of better feeling that Q2 would be better than Q1 hence the guidance that we put out. Even though we were up and others were down, we’re still guiding flat to up again. So, we expect distribution will recover albeit at not in a major way this next quarter, but we do expect it not to get worse.

Okay, fair enough then. So, was gross margins in the second quarter expecting kind of similar levels and I guess from a starting point of that the low end of your last quarter’s guidance. What helps us, what’s going to be the biggest lever to help that move upwards, just going to be SiliconBlue transition to 40 nanometers or better industrial business or what’s – what gets toward that say 57 or better kind of number?

That’s really – it’s really kind of mix, I mean industrial one thing that we know distributions and other thing and then product mix on specific categories and then we have to transition the iCE products from 65 to 40 nanometer and we know that because we knew that going into the acquisition that are big accretive – the big first accretive it’s a 40-nanometer and revenue. So, those are really the areas that we’re focusing on, some are out of control, the others are within. And the other big thing is cost reductions from gold to copper. Thus we see those and we see some of the inventory with the original cogs. That will help us too as we’re grow throughout the year.

Okay. I mean is it reasonably expect gross margins if things go well to get back up to 57 or higher by the end of the year?

We haven’t moved away from our model of the high 50. We believe we’re going to have to do some work obviously and we’re going to need some help through the growth of (inaudible). And so, that’s really what we’re focusing on right now and our big focus to sell, sell, sell, right. We have a lot of new products. We’ve got XO2. We got ECP3 high performance and low power. We’ve got ECP4 that we just now coming out and we’re getting some early engagement on. We’ve got the iCE product line and we have a whole another initiate on power management. So, we have five to six new products that we are swinging right now out to the sales force, our distribution and our reps. So, we still actually good that we have a lot to sell. What we got to do is just go sell it.

Okay. And just last question from me and I’ll jump out of the line. Darin, I’d love to get your thoughts on – for the first four quarters so I can place and getting out there and getting design wins. How is the acceptance of the produce especially inside the Lattice organization and the assuming thoughts of the trends and design wins recently?

Yeah, I think that the first thing that was interesting is in North America, we immediately had win and some those wins were the fact that they were kind of people on the fence and then once they became Lattice then it became, okay, this is a real company, this is going to support me for the next decade. It was a big deal and we’ve got some really interesting design wins in North America. Korea, we’re continuing to give multiple designed wins there, which has been focused on before and then in Taiwan. So, we’re really heavily focused on getting the product not only to the OEM specific design wins, but also to register BC channel. And we’ve been spending a lot of time really educating them on how the product works and I think the biggest challenge for us is getting the software integrated into diamond. So, it’s a ease of use deal between the Lattice extra tool product and the iCE products. And that’s really on us to get everybody trained and get the integration done and get the software again integrated into our diamond platform.

Got it, okay, great, thanks for the comments Darin.

Yeah.

Your next question comes from the line of Sundeep Bajikar.

Hi, guys. How are you doing?

Good.

So, just a couple of questions on SiliconBlue efforts. Again if you could just on when you’ll think the transition to 40 nanometers would be substantially completed I think that would be helpful. And then the other part of the question was any guidance you can give us in terms of the shape of product grams particularly some of that larger OEMs where a SiliconBlue had and continues to have design wins would be great. Is it fair to assume that the uptick you saw sequentially in the consumer business was substantially driven by SiliconBlue, is that fair?

Yeah, let’s talk about revenue for a straight. So, we expect revenue to grow throughout the year that was a fair assumption that you had and an addition as we look at the transition, we expected to be really going out of Q3 to the really complete – substantially completed out of Q3. So, we’ll have a little bit of transition what we found early on was if there is some product line that had ice product design into them and was too painful for them to do the conversion right way. So, we jointly chose with our customers not to do those so that they can keep the products running and their focusing on the next generation all being ice. So, we got a little bit of overlapped in Q2 and Q3, but by the time we execute Q3, we should have very little 65 nanometer demand left.

Okay, that’s great. And if you could just talk a little bit about the shape of the revenue ramp profile, just in addition to sort of the design winds, I think you’ve been talking about already?

Oh, yes. I would expect that – obviously we expect to growth throughout the year. I cannot tick exactly the number right, but we are going to growth throughout the year. The key thing at this point is the engagement, as I talked about earlier with distribution and even more engagement with some of the suppliers that we had in the past that may not have used ice because of more of the start of mentality, is now that we can carry inventory and we can buffer that upside there is a bigger difference in designing it in there was when those kind of hand and mouth on 40 nanometers. So, we can carry inventory and we can also guarantee people to supply that they needed they wanted to ramp things in to production. So, I would expect that we won’t see full traction on ice really going into next year as we get some of this new design winds growing every quarter and that’s the goal. If you continue to get momentum and also make sure that people feel comfortable about that product line being supported by less –.

Okay, great. And then on ECB3 –, can you tell us what revenue did sequentially answer your view of potential recovery in that market?

Yeah, ECP3 – we grew really nicely and ECP3 we have more as we’re going after. Specifically, I think that was the price that we put into the 3G market place. We put it in a longtime ago, more in the lower density side of things because the upper side of things are little bit more competitive that as you know, so some of the lower density are lower less densities of ECP3. We feel very confident in the higher less densities, there is a lot of competition. So, it’s a great growth market for us, but for us to grow and maintain the margins structures that we have to. We’ve got to focus on the cost reductions strategies the transitions from gold to copper and then we really got to get things, it was up about 1% quarter-on-quarter as the segment ECP3 itself almost did more than that. ECP3 itself was up 9%.

Great.

9%, so it was a pretty good, I’m just trying to look at the numbers or I would take you through the detail.

Okay, maybe I’ll ask a different question while you doing that, on the full year basis is it fair to expect the revenues for the companyrich to grow over 2011?

I think the models that we have is the second half strong we have a short have some really good growth, but I’m not confident at this point unless we start to seeing a lot of backlog rolling for Q3 and Q4 and I would argue the goal for us is to grow every quarter from this point forward and make substantial growth in the comms and the iCE product line along withdrawing any new products that we have that go in the power manager and some of the new trails of ECP3, but it’s counting starting off at a $70 million or $72 million first quarter, right. I mean that’s down. We’re really going to have to have a strong second half, and if we do then we are right there, if we don’t then we are going to be challenged. By the way, ESP3 grew 3.5...

35%.

35%, not 9%.

35% sequentially?

Yes, sorry, I was looking at the percentage before, not actually – it’s 35% quarter-on-quarter versus 9%.

Okay, that’s very helpful. Thanks very much.

No problem.

Your next question comes from the line of Ruben Roy.

Thank you. Darin, hi.

Hi Ruben.

Hello. First of all on the 40 nanometer stuff, obviously small numbers still today, but one of your peers was talking about some capacity issues out of Asia. I’m just wondering as you guys grow volumes and as you are shifting, you are starting to shift, is that something that’s come up in your discussions with your foundry partner?

Are you reading about ICE specifically?

Yeah.

So, let’s talk a little bit about the difference between capacity and the ICE product, right, on the ICE products, you have tens of thousands of die per wafer. So, the advantage of that is you don’t need a ton of wafers and we are having discussions with multiple 40 nanometer suppliers not just one. So, the nice thing is we are not really big enough at this point to be constrained, but we do worry about others who are constraining those particular capacities to impact us. So, we’re working our deals with our partners in the subcon as we speak to ensure that we have the right wafers.

Okay, that makes sense. Thank you Darin. And then Joe, I was wondering if you could potentially ballpark what the impact to gross margin would be as you exit Q3 and get into Q4 and this transition to 40 nanometer is complete. Can you give us kind of ballpark basis point?

I can’t really – not really specific to SiliconBlue, no.

No, all right. I guess the last part of my question then for Darin is, do you think that with the guidance for flat up for that the various consentience – of the end markets will be similar to what we saw in Q1. So, it sounded like you said industrial would kind of stay flattish and perhaps in growth and cons are the way to think about the end markets?

Yeah and I think when I look at it, I look at it a little different than I looked at overall worldwide distribution and if worldwide distribution comes back to a healthy level seen in the Q3 levels and I think things get back pretty fast, because the strategic account and the specific market segment seem to be fairly healthy, but as far as if you compare them with Q4 right. But distribution is the big question mark today, right. If I give the broad base recover in Greece and Spain and everything do more damage or not, right, and so we are trying to be somewhat conservative, so we give our outlook to make sure that we get our guidance.

Okay. Actually, I just thought one other thing Darrin. On 40-nanometer the transition that you’re talking about is the majority of what we are talking about here in Q2 and perhaps the second half of the year and transitioning your existing customers – SiliconBlue customers from 65-nanometer to 40-nanometer or is there – are there kind of design wins that we’re originally down on 40 in that mix that will be ramping in the second half of this year?

Yeah, I mean there is a lot of 40-nanometer design wins that we’ll be ramping the second half already because we have already samples and we do a lot of design service for our customers with a slightly different models that you would see in comps whatever takes whatever to get designed in and it takes whatever to get designed out. So, this is a big hit, another basic, basic, basic the next I know you have some runs – right. So, a lot of these design wins have already been sampled and qualified on 40-nannometer we are shipping production stay. The bigger challenge is on the some of the smaller companies making that quick transition to 40th (inaudible).

Right.

Right. As we do a lot of the – we do a lot of design service of work for these customers to get them into production, which enables us to do the conversions faster. And, that’s a view of consumer versus other market.

Right, okay. Thank you.

You got it.

Thanks.

And your next question comes from Nathan Johnsen.

Hey guys, thanks for taking my question. Is it to me – also asking that a slightly different ways, just as the SiliconBlue content gets on the 40-nanometer and it ramps as a percentage of revenue or potentially ramps as a percentage of revenue, does it – do you anticipate that being accretive to gross margins or is that a source to headwinds that you guys have to cost reduced around? And, then the second one which is a clarification. Just Joe if you could clarify what you said on tax rates both for Q2 and going forward?

Sure. So, on the SiliconBlue, we hit 40-nanometer shipment production where it is accretive when we get to certain revenue number. Right, it’s accretive from a margin perspective of where we get to a revenue level to offset the (inaudible) on a percent basis that will be accretive also. If you get down on a percent basis.

On percent basis of the accretive also.

Okay. So, on a gross margin percentage basis, it’s going to be a benefit of some revenue level.

Correct.

Want to share what revenue level things?

Those statements are recording.

On the tax side – so, we had a $7.9 million provision this quarter, non-cash event that is basically the sale of inventory, company inventory based on a new tax structure. We’re going to see another provision next quarter roughly the same amount as that inventory sells out. Q3, Q4 expected to drop substantially into the $1 million range and by Q1 of 2013 we’ll be done with all of the structural impacts and we’ll be running at our long-term rate of approximately 15%. Did that help?

That helps a lot, thanks guys.

Your next question comes from Bill Dezellem.

Thank you. We have a couple of questions. First of all, would you provide a bit more detail behind each of the end markets, not in terms of the first quarter, but in terms of what you’re seeing or believe as you’re seeing for the second quarter? And then secondarily you referenced that you had some really good design wins right out of the gates with SiliconBlue post the announcement of your acquisition with them. Those particular design wins, how quickly do those move to production?

So, let’s talk about the second question first right. So, the second question as far as SiliconBlue design wins happen much quicker than they do in the industrial or in the communication markets. Right, because you don’t have to do, a lot of time it could be a simple thing as a bridge, it could be a simple where they’re designing a feature the processor can held the feature, they design it in, they get it going and the life-cycle for these products is not particularly along. It’s between one or two years that the development cycle is using less than one. Right these guys are turning phone models very quickly. They’re adding features to existing platforms, which makes it a tract if you get on to a platform and then if that features, that hit, it goes across all the products, right. So, that’s kind of how that market worked. There is lot of design services for that. So, we would expect our consumers as we move through this. Our s goal is to grow consumer modestly as we go through these design wins and then comps I think is going to snap back in Q2, so, we expect that to do better. Industrial we’re not really predicting it to really have that big of a pickup in the upcoming quarter, I think a lot of that is Europe and some of those. And again like I said distribution is our biggest challenge, right. Computing will come back because again you got the cloud computing and you got servers that stuff come back over time. But for this quarter we’re trying to be a little conservative. Last quarter was dicey, so I think everybody and you saw some people they had some big misses and some people they were within guidance, so it was more difficulty. We are just trying to be conservative, if you look at the outlook distributions are biggest risk.

Thank you.

Your next question comes from the line of David Duley.

Yeah, most of my questions have been answered, but just one quick one. When you look at your new product breakout, you have four, five families in there, what are the two or three biggest families of products at this point.

Our new, ECP3, XO2, ICE40 and power manger. David Duley Okay, thank you.

Your next question is a follow-up from the line of Tristan Gerra. Tristan Gerra – Tristan Gerra: Could you talk about the market share gain that you expect this year, what the end product, this is driven by and also is this at the expense of other FPGA vendors or is it in segment.

Yeah, so I think there is a couple of different versions of some read outs. There were some (inaudible) significantly. Now, I’d like to use the word modestly as you go through the year, right. But we do expect to gain share with some of our comps customers this year. I think if you look at while they were taking share from somebody else, since we are new in the market, we believe that we are doing well in this market. We are growing in this market. I try not to comment on whether we take share from our competitors. Our objective is to grow in this market and do it profitably. Tristan Gerra – Tristan Gerra: Okay. And then how should I look at the secular growth drivers in your CPND business this year. I know you’ve given some color by end market, anything that really stands out from what does about – two-third of your business?

Yeah, I think it’s interesting because one of our most successful businesses continues to be XO and 4K product, primarily in the server business and comps. So, people think of comps as the ECP3 only, but what they forget is that we sell a lot of our older products and XO into the communications (inaudible) controlled plan application and our newest product XO2 fits nicely into that space, offer some higher densities and also offer some better feature stuff at a pretty high value, high valuable price structure for that and again that 65 nanometer which gives us a better cost structure. So, XO is still going to do well. We still get design wins on it. So, it’s not going away any time soon. XO2 is just starting to ramp with some meaningful volumes this quarter and we are happy with the progress we have made there. So, we are not back and away from that market whatsoever. And again it’s kind of really – it’s really going to dictate the year by how well our distribution and our focus on some of this growth market. Those products are going to do well. We are focused on a lot of other new products today. Tristan Gerra – Tristan Gerra: Great, and a quick last one. How much revenue did you generate at the 65-nanometer node excluding SiliconBlue in the quarter and also what are your plans on expanding your non SiliconBlue products to 40 nanometer and then finally what are the costs associated with that?

Yes, so on the 65 nanometer price today ECP3, ECP4 and I have go to were all on 65 nanometer today. ECP3 is the largest volume because obviously has been there the longest and is ramping as we speak, so we would expect that to do well. We do have some future products coming in on 65 nanometer, because they use combinations like power manager and some of the other follow on that is some 65 nanometer capability. We are currently looking at both 40 nanometer and 28 nanometer, which we’ve mentioned before. We were skipping 40 nanometer to some people because we’re going straight to28, but with ice – there is actually the ability to use some the IP and some of the capabilities that we’ve learned from ice to use that on some of our future products, but yeah there will be some cost reduction products that are handled on both 40 and 28. Tristan Gerra – Tristan Gerra: Great, thank you.

Okay.

Your next question is from Brad Rosenbaum.

Hi, still confused whether tax rate, Joe. So, could you guide to what our cash tax rate would be over the next couple of years that?

Virtually zero. And we put that in our supplemental schedule, so what we’re guiding to as a GAAP rate based on whoever supposed to perform GAAP. When you look at the cash tax, it’s virtually zero I think we spend a couple of $100,000 this quarter and don’t expect that to change substantially going forward on a cash basis. Make sense?

Yeah. Thanks.

Okay.

(Operator Instructions) And sir your final question is a follow up from the line of Ian Ing.

Thanks for the follow up. Question on China obviously a pretty big territory for you. When I take up the top two OEMs, I’m still estimating maybe low 20s, mid 20s percent of sales. So, perhaps you can talk about those applications and sockets that you have?

(inaudible) our two largest customers...

When I take about China 39% of sales according to your case, so when I take those two out, you still got a descent chunk of China sales maybe just talk about that section?

Yeah, there is more than two people in that segment for sure and our China distribution is actually pretty healthy. So, if you look at overall China and Japan its 65% of our total and 15% – I think Japan is 15% of that total. So, we play a lot in comms, video and infrastructure.

Okay, great. And in terms of the shortages that TSMC 28-nanometers and 40 nanometers, clearly the last two days in the earnings calls, I would actually flip the question around, I mean do you see any opportunities to serve some underserved customers and redesign some sockets for these points?

Well – yeah, I mean the biggest thing is – I mean for us the biggest challenge that we have is just the design wins and takes on those comms product. So, if there is a shortage, if somebody has already designed and in two products, which is many kinds they do, the difference is they have one of our competitor products and our product line into two similar particular devices. So, they have dual courses, in that case we would pick up share, but in the comms market to get a design win it takes quite a long time. So, you wouldn’t see a big shift there where you might see a shift as somebody couldn’t necessarily get (inaudible) take or something else in a cell phone or in a mobile device where they have a simple bridge device, using (inaudible) iCE your eyes and may quickly convert that design and just started ramping it. So, I think consumer you probably get the quicker deal, comms, you would get an upside if they had two parallel paths which they sometimes do, and you get upside orders and they would get downside orders.

Okay, thanks. And my last question here perhaps ECP2, ECP4 you can talk about the competitive landscape and the base station radio card sockets, so, the stock of somebody’s alterative ASSP solutions doing digital frontend and digital conversion et cetera?

Yeah, most of the stuff you heard about digital frontend is more some of the (inaudible) systems where people don’t full integration of processors, some – you’ll hear people that is up to two ways. One is we’ll take an FPGA and integrate Arm 9 and Arm 11 into those solutions, or you will see other people that use network processing, we use small FPGAs around. And they will like network process FPGAs. There are two different solutions and two different architectures on that today. We actually think that we’re well positioned for that market because we do target high performance lower Lattice devices that we think we’ll serve that very well.

Okay, that’s all I have. Thanks for your time.

Okay.

And so, there are no further questions at this time. I would like to hand it back over to CEO Darin Billerbeck for any closing remarks.