Good day, ladies and gentlemen and welcome to the Fourth Quarter 2007 Financial Results Conference Call. My name is Shantali, and it will be my pleasure to be your coordinator today. At this time all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference. (Operator Instructions). As a reminder this conference is being recorded for replay purposes. I will now like to turn the presentation over to Dr. Sutardja, Chairman and CEO of Marvell Technology. Please proceed sir.

Thank you, Shantali. Welcome everyone to our fourth quarter and fiscal year 2007 conference call. Weili Dai, Chief Operating Officer and George Hervey, Vice President of Finance and Chief Financial Officer are joining me on this call. Today, we reported Q4 revenue increase of 27% from the prior year to $622 million. Sequentially, our Q4 revenues increased 20% from the prior quarter, given the contribution of our newly acquired application and communication processor business. For fiscal 2007, our revenues were $2.24 billion, which is a 27% increase from fiscal 2006 revenues of $1.67 billion. We are pleased with our results for the quarter. In Q4, our business has stabilized as we expected and we are now placed for a resumption of solid growth. As we start into the new fiscal year, I am very excited about our near-term opportunities as well as our position to grow much faster than the market over the long-term. We continue to focus on leveraging our core mixed signal DSP, RF and processor technology to strengthen our leadership position in our served markets as well as to enter new large market opportunities. For this effort and our execution, we are well on track on becoming a truly industry leading and diversified semiconductor company. I will elaborate more about our opportunities and our business progress. But, first I will have George for more insight into our Q4 and fiscal 2007 financial results.George Hervey: Thank you, Sehat. Good afternoon ladies and gentlemen. I would like to remind all participants that the following dialogue will contain predictions, estimates, and other forward-looking statements covering subjects such as enterprise, consumer and emerging market trends, competition, customers, suppliers, products and demand, and expectations regarding revenue growth, gross margin expectations, operating expenses, other income, accounts receivable and inventory. Such statements will be…

Thanks, George. First I would like to start off by thanking our employees for all of their hard work and dedication. This quarter, we successfully integrated the application and communication processor business acquired from Intel into Marvell. Even with such a large integration effort underway, we continue to have strong execution in servicing our customers. We completed a successful launch of a family of our next generation high-performance application processors and made great progress on our fab migration strategy. Now by combining our XScale and Feroceon processor engineering teams, we have assembled the critical mass to internally develop even more advanced application processors. These range from very low power processors for handhelds to ultrahigh performance processors to address the increasing computing requirements for a variety of high volume consumer applications beyond just cell phones. This quarter we successfully launched three handheld processors with the fastest processing speeds in the industry at 806 MHz. Additionally, we are already demonstrating 1.25 gigahertz processors, which we are actively working on commercializing with customers. We are excited about our strong positioning in the market given our tremendous performance advantages that our technology brings to our customers. Our solutions truly enable our customers to differentiate their funds in the critical areas that consumers recognize and value. In high-end applications, such as video, Internet browsing, e-mail applications, and MP3 music players are loaded into cell phones. The role of the application processor continues to become more significant. More MIPS allows the phone to handle more sophisticated operating system, advanced applications, and provide faster response times, and richer multimedia. Also our industry-leading low-power technology results in longer battery life. As cell phone continues to evolve, the integration and performance of such advanced applications will be a key differentiator in what sells the phones. Consumers care how quickly…

Thank you, Sehat. Beginning with fiscal 2008, we will be providing guidance only for the current quarter. As we enter fiscal 2008 we are encouraged by our design win momentum and reasonable business conditions in our major markets. As I mentioned in my Q4 commentary; revenue from our storage product stabilized during the quarter as the component inventory level held by some of the large storage customers returned to normal levels. This improvement in inventory levels is positive as we entered the seasonally weaker first half of the year and expect seasonality to have minimal impact on our storage products. Q1 will be the first full quarter of revenue from our XScale products, and our design win momentum should again offset the impact of seasonality in the handset market. Market conditions remain stable for our communication products such as Prestera and printer ASIC products. The overall demand for embedded wireless LAN products is expected to increase as new platforms are introduced to the market. Based on the above factors, we believe that our Q1 revenue should increase to approximately $640 million to $650 million. We expect Q1 gross margin percentage to be up slightly from Q4 and growth in operating expenses to be slightly below the rate of revenue growth. Now I would like to turn the call back to Sehat.

Well thank you, George. And that completes our commentary. Shantali, would you please poll for questions?

(Operator Instructions). And our first question comes from the line of Cody Acree of Stifel Nicolaus. Please proceed sir.

Thanks guys. It sounds as though inventories have corrected. Are you finding any pockets of lingering inventories out there or is there anything that still is weighing on this first quarter outlook that you still think has got to be cleaned up yet?

Not of anything significant, Cody. I think the two big areas that we had challenges in the back-half of the year were obviously in the storage market and in the 802.11n market. Both of those were much better than they did 90 days ago. So, we are encouraged in having essentially a good position here in Q1, and that storage market is reflective of the recovery there.

Alright. Great, and then I know there has been some recent fairly profiled speculation about your design win position with the XScale processor. Can you talk about how design win momentum has been recently and what you believe your market share trends will be throughout the remainder of this year?

Yes, the XScale processor design momentum is actually very, very positive. So, we are very happy. We are also very happy with the fact that we have already started receiving samples from our outside foundry for the per foundry XScale products. So, they will help us with our capacity requirements for the future as well also obviously for the cost reduction that we need to serve this market. So, our customers are seeing that progress as well, and they are also very, very excited about their progress. And this is one of the reasons that we are getting more design wins. I am not mentioning that, of course, the processor is best in the class in the industry.

And Sehat, you mentioned you brought up here the foundry transition, any update on when you expect that to happen?

We have already started receiving the first silicon. Not statically, we have only been having this business for only 90 days. So, I consider that as a very, very good progress. So, as we continue over the rest of the year, we will continue to move additional devices into the foundry as well.

And then very lastly, any update on the options investigation that you would give us.

Not much more than what we can, it's publicly out there. We do believe that we are moving towards the conclusion; the special committee is moving towards the conclusion of their efforts. So, we would expect, in the not too distant future to have something more to report on that.

Alright. Thank you, guys.

And your next question comes from the line of Michael Masdea of Credit Suisse. Please proceed sir.

Yes. Thanks a lot. Could you guys give us an idea on visibility? It sounds like it's improving, but maybe give an idea of how orders have been trending, both on the turn side and overall. And has there been any change in lead times now that you've got your inventory down a little bit?

Not really Michael. I think that in general we've always been certainly in our storage business, have a very strong backlog position entering a quarter and I would say that Q1 is no different then our historical trends. It maybe a little bit better on the comp side. But, again, I think when we talk about turns, we know the programs that we are involved with; it's just the matter of the filling coming in. So, it's not that much of an issue or at least historically has not really been that much of an issue. But, clearly we know where the end markets are going and we know where we are in relationship to that. And we feel better about that.

Okay, great. And then it sounds like you have pretty broad growth. But is there any one area that stands out. And especially is there any difference between the core business and the rest of the business in your forward guidance?

Well, one of the areas we don’t talk a lot about it. But, I will tell you that we did make some when we acquired the Printer ASIC business from Avago. We were very excited about that and indicated, and we thought that over a three-year period that business ought to double. We got in with an objective of getting back to having the majority market share. Its performance so far has been very good. And we are definitely on-track to this point. It's still on the roof, but we have the year yet, but at least as far as where we are today since we acquired it in May, we are very pleased and that has been a standout for us.

I guess we are going to add to get those also because we are leveraging our high performance processor technology into that business as well.

And the last one Sehat; in the two businesses that you had introduced this quarter, can you give us an idea of what timing expectations are for you and what kind of markets or potentially talk about for Marvell in terms of size?

Are you talking about the video, Michael?

Yes, the video, and then the storage side also?

Okay. The video products, this is just one of the series of products that we are introducing into the market. We are entering the market through the very, very high end segment. So, over time what we would like to do is also to move this technology to the mid-end markets and eventually to the entry level as well. But, we felt that it's important for us coming to this market, somewhat late but nonetheless it's a huge market opportunity. We want to put ourselves at the highest end as a leader in technology. So, as we got those design wins on the high end, we will try to work on the rest of the market. So, it's a huge market opportunity and we do expect to develop and introduce more products into this market.

On the initial products, people have visited our booths at CES. They are fairly quick time to market on the initial scale of products. So, hopefully now of that super large amount but some meaningful revenue in the back half of the year.

Yes. Okay.

In term of processor maybe to give an idea, the video products actually is a video push processor.

Right.

So it communicates with other peoples, like say HD decoder. So, over time we will introduce our own HD Decode as well.

Great, that's helpful. Thank you very much.

Okay.

And your next question comes from the line of Shawn Webster of JP Morgan. Please proceed, sir.

Thank you very much. Can you give us a sense of what the percentage mix was of your storage and communication segment in the quarter?

We don’t break our business out that way, Shawn. We basically are more of a split amongst our consumer end markets and enterprise end markets. Although, I think it's probably fair to say that still our storage products are the largest part of the company.

Can you tell us what your storage business is sequentially?

We don’t breakout the individual products growth.

Okay, and can give us or tell us what your total employee headcount is now?

Yes, we targeted with bringing 1250 people over from the XScale business, then we will be right around 5000 people, and that's right around where we came in.

Around 5000. Okay, thank you very much.

Welcome.

And your next question comes from the line of Allan Mishan of CIBC. Please proceed, sir.

Hey guys. Quick clarification, George, did you see that 802.11n increased for the quarter?

Yes.

Great. And how much of your Wi-Fi business is now derived from it, and just roughly?

It is still pretty small, Allan. The majority is still the B&G in the embedded space. It was up for the first time in three quarters.

Okay. And then did you say that both PHY and controller products where weak in the quarter, or was it only the controller product?

Well, it's the combo product. It's the combo products for the PC space.

I see. It's not the switch PHYs.

No, switch 5s were very strong in the quarter, but I think most people understand that market, the PC market is fully converted to 8 gigabyte at this point and there is price erosion and so forth. So that market is not strong anymore.

Sure, makes sense. And then, do you still expect the Intel acquisition to be accretive by Q4?

Yes. We had a very good performance in Q4. This past quarter, as I indicated is slightly better than expected gross margin performance. And my commentary about slightly better improving margins in Q1 is a reflection of the progress we are making there.

Great. And then last question, any update on the optical storage business, still expect material revenue maybe in the second half?

Yes, the progress it's moving back to on track quickly, specifically related to the firmware, the software related to the optical side there. But in terms of revenue, I think is sometimes a little bit [later on]. But the design wins are progressing well though. It's just that it takes a little bit longer than expected and the complexity of the software is tremendous. But we have customers, there are certain customers, who are working on their own software as well as we have third party system providers that are working with us on additional software support. So, we are moving forward.

Okay, great. Thanks a lot guys.

And your next question comes from the line of Louis Gerhardy of Morgan Stanley. Please proceed, sir.

Good afternoon.

Hi, Louis.

Question on the ultra portable consumer opportunity in HDD like the Seagate, when that you announced. Is this opportunity going to be large enough where you've already got on your roadmap a planned share resources with some of the HDD silicon along with the XScale and the wireless LAN functions that are in that?

Yes, when we talk about the immediate opportunity that we got for the Monahans and the Wi-Fi combo products to address different markets, and an example of the market was the HDD small form factor packed device that combines a low-power processor and Wi-Fi. So, that is just an example. This is not to say that the cell phones are going use HDD. We had that kind of hopes several years ago on micro drives in a cell phone. But with the price of Flash going to the level that we are at this point, and I don' think we would expect any micro drives in cell phones in any significant volumes, with exception for the very, very high-end high-capacity cell phones.

Okay. If I could just switch gears, and ask you about the cost saving of the business you acquired from Intel. Of the total cost savings you expect to get over the next year, how much of that would be from changing wafer fabs versus backend savings like probe, assembly and test? I am just looking for a comment like its 50-50 or something like that.

But you are going to probably be disappointed. Again you identified, Louis, the things. There are three things that are very important to taking the gross margins on this business, which we had initially said; in the mid-20s, is something that starts with a four. And they are going to be accomplished with three things; first of all bringing in the redesigned chips into the product mix. And we have announced those chips now, and we anticipate that they are going to be in our mix beginning in Q2. But also we are moving as aggressively as we can to converting through foundry model with Intel. Our assumption at this point even though we were very excited about the progress we are making with our own foundries. Right now our assumption is that our production comes from Intel during '07. When we move to a foundry model that's going to be very beneficial to us, and of course that allows us to do the backend processing, and that we believe we can do in a more cost effective basis. The cost of moving to the foundry model is a significant contributor, but also having the redesigned chips in mix is a very significant contributor.

Okay. Thank you.

And your next question comes from the line of Seogju Lee of Goldman Sachs. Please proceed sir.

Great. Thank you. George or Sehat, over the past couple of years you've done very well on the design wins for Wi-Fi into cell phones. Yet the revenues and the up-ticks have been somewhat lagging. Obviously, the markets themselves aren’t there yet and we see a lot of activity. In 2007 do you think that the cell phones for Wi-Fi will start to become a material contributor, and what's the outlook there?

It's an interesting situation. It is why it's parallel to the gigabit Ethernet market where there are a lot of design activities; the technology is very applicable for the platform. But, the SKUs themselves just don’t have a lot of volume associated with them yet. We've got designs with Nokia, and Motorola, and Samsung and actually another major guy we haven’t talked about yet. But, we have yet to have them really ramped them in any meaningful quantities. So, we are kind of waiting at this point. Sehat?

And one thing, I think probably we are also learning ourselves as we enter the cell phone business. We have customers there even still shipping those XScale products. They were designed like three years ago. So, that indicates that it takes a little bit longer time in the cell phone business to ramp new products compared to the PC business. I think the customers are a little bit conservative in terms of getting all the software, all the system debugged before depending on the switch to higher volume business. But, at the same time, because we were very early in the game, we feel comfortable that we have a better position in the customer base. So as more and more products are being introduced with Wi-Fi capability, those are most likely to be based on our technology. And as the usage model is proven in the market, you will see that more and more people will have to raise to introduce or to ramp up their products into the market. So, we feel that actually we are in a good position in this space.

Okay, great. Just a follow-up question, does a product like the iPhone helps spur the market or accelerate the roll-out of these products with Wi-Fi to the market. Has it impacted the design win activity as well? Thanks and good luck.

I think we will prepare for that one.

I think we all hope everyone does well on their products, because you have just got to help the industry.

Okay, and then just one last clarification item. On the XScale revenues for the first quarter George, do you expect it will grow on a full quarter basis, or is it just the full quarter versus the partial quarter? Thank you and good luck.

Yes, thank you. We will get into specific. I think the comment I made was that the design win momentum is good, allowing us to come through a quarter which normally could have seasonable downdraft to it. So, it means that, yes, we have a full quarter which means there's more revenue than there was in Q4 but I think it's the seasonally challenged quarter.

Thanks. Good luck.

(Operator Instructions). And your next question comes from the line of Shaw Wu of American Technology. Please proceed sir.

Thanks, just two questions. Regarding the fas opportunity you talked about doing different types of silicon, you including disk drive controllers and host controllers. Do you plan to do the HBA's themselves that's question number one. And the question number two is, do you have a long-term gross margin model? Now I believe it's well below 50%. I am just wondering, what's your longer-term gross margin model? Thanks.

Yes. The Host Bus Controller, is as some people call it HBA. So, our solution that we introduced to the market is the smallest in terms of the footprint and also the lowest power. So, it takes about one third space of our competitor's. So, this solution is not just suitable for the HBA market, but is extremely suitable for the RAID on motherboard because of the footprint that the space of that it takes without sacrificing any performance and back to higher. It has higher performance in the competition. So, these are markets that we are targeting.

It was the chip first, I think in absence of chip versus the whole end solution.

Okay. We have other customers who are building HBA using our chips.

Our chips, right.

You are not trying to build the HBAs yourselves right?

Not at this point, but we have customers, they are building HBAs using our chips.

Okay, thanks for the clarification.

Then on the second one, Shawn; we indicated when we did the Intel transaction that we believe that the long-term model will probably won't get so far sometime next year. It is the 50% gross margin target for the company, 26% operating expenses and 24% operating income. So, we still have our first objective, to get the XScale business to be accretive for us and then we can move above that. Although, I will say we are very pleased with the gross margin progress that we have already seen.

Okay, just a follow-up, I think it was Allan Mishan's question earlier, do you still expect XScale will be accretive by fiscal Q4?

Yes.

Okay, great thanks.

And your next question comes from the line of David Wu of Global Crown Capital. Please proceed sir.

Good afternoon, thanks for taking my call. I have some questions for George on one thing which is, you mentioned that the gross margin was slightly better than last quarter than you planned and this quarter than you planed. Is that coming out of that Intel-XScale business? And the second thing really on operating expenses; you indicated that its going to improve this quarter since the revenue growth was minimal. I guess, I was wondering whether after you add the people from Intel that initially internally at the company, there really is no headcount addition to speak off. That's how you get that operating expenses down that quickly. And lastly, I just have one thing for Sehat, Samsung is no longer one of your top three 10% customer. Can you talk about that business, whether there is a particular issue with Samsung this quarter or have Samsung been loosing market share in the storage space?

You turned a lot of questions there, David. We will take one at a time. I think on the first one, we were pleased with the XScale performance from the manufacturing standpoint. So, yes they contributed, not the sole contributor, to the slightly better manufacturing performance. But they clearly were a contributor to that and they will continue to be a contributor here in Q1 as well. Although we do expect the other products that I indicated we would be increasing. So, there will also be positive margin contribution. On the expenses, as we had indicated before. We will start to see a roll-off in we believe the amount of money we were spending on a quarterly basis from the options special committee process. We did actually see a little bit better than we anticipated level in Q4, as I indicated our operating expenses were a little bit favorable to our expectations. So, we are starting a little bit ahead of the game there and we would expect to see some more. So, there is a balance, they are going forward to the level of investment that we need to make going forward with the other businesses.

Okay.

I think that is the last one, that was the--

Yes, Samsung.

Now, Samsung is, I think, just probably, Samsung is just slightly from 10%?

The number gets bigger and bigger.

The number is still a big number.

Right. We won't be totally out of the -- have everybody back in proper form from the inventory until we get through Q4. So, I wouldn't read anything, David, into that not being a 10% customer.

Okay. That was really my concern, and Sehat, I hope you are on the phone, can I ask one more question? If you are going into the video processing side from digital side, that is all the way into set-top-box and also LCD SOC business. Is that something that you want to move into in the future?

Yes. Okay. Let's take a look first at the HD TV. When we say HD TV, as I said earlier, we enter through the introduction of the post processing. This is an area where our customers can immediately see the difference, the difference in quality of our solutions and the existing solutions. After all, our customers, the end users, the consumers are paying multi-thousand dollars for the TV. Even for let's say Blu-ray player, at least $400 to $500 for the Blu-ray player. So, it is important that the quality coming out from these boxes are the best in class. So that's how we get the design wins. Now eventually, we also want to introduce the companion chips, the decoder, the tuners and so on. This is over the next year or so. So after we've completed our developments, then we will introduce those companion chips as well to lower the cost of the overall solution. And while at same time maintaining the quality that we introduced at the high-end.

Okay. But that is mostly on the digital side. You don’t really want to get into the image processing side?

We are talking about image processing right now. Right now, our entry point is through the image processing. It is the processing of the image that was produced by other people's chip. And then instead of sending directly to the TV, we massage the images to make it more pleasant, cleaner, and quieter. We call it quiet video technology. There is some really big difference between the pictures that goes directly to the TV versus the digital signal that goes to our post processor before it goes to the TV set. You really have to see it to appreciate the benefits of our image processing technology.

I was just wondering, what's the difference between yours and AMD's and Trident Microsystems approach and Broadcom's approach to that HD TV business?

So, our video post-processing technology, if you think about it, if you are familiar with the term Faroudja in the past, this is the next generation for that kind of technology. When other people are talking about the video, they are talking about the front-end. They are talking about the DMOD, the MPEG decoders. That's when they are talking about the video. When we are talking the video, it is the post-processing of the image that those people produce. So, there is an opportunity that down the road we can also provide more complete solutions.

Okay, thank you.

Let me just add a little bit. The front ends are standard base, okay. So like MPEG-2, H.264, and BC1, these are all standard based technology. We are talking about video processing is non-standard based technology. This is the black magic of the art of producing better quality videos.

Well, that's where the margins are. Okay. Thank you.

Alright.

And your next question comes from the line of Chris Caso of Friedman, Billings, Ramsey. Please proceed, sir.

Yes, thank you. George, just wonder if you could clarify earlier comment with regard to the storage market. It sounds like that you do still expect customers to be burning some inventory this quarter. Do you think you are shipping below actual consumption in this quarter? And then, you kind of go back to a steady state in the next quarter. Is that the right way to interpret your comments?

Well, I think in terms of what we talked about quarter, I think that was if you make those Q4 and Q1, then I would agree with the comment.

Okay. So then inventory basically burned off by the end of the Q1, the April quarter?

No, the January quarter.

The January quarter, sorry.

Yes.

Okay. With regard to the XScale business, as you guys continue on to your goals on that business and I think you previously have a number of $150 million a quarter by the end of fiscal year. Can you confirm that that is still your goal? And if you could talk about how much of that growth you would see in unit growth as compared to content growth? Where do you stay in right now in terms of shipments of the communications processor as compared to applications processor?

Okay. Probably some pressure there, we won't give all that detail. But I would tell you that we absolutely feel comfortable with the revenue growth numbers that we've put out which is basically going from the $100 million plus where it currently is to the $150 million by Q4. Clearly that's something we believe from everything we can tell. It's a very achievable target for us to be pursuing. The new products are very exciting including the Combo Chip that we've done. So, that would be moving into the mix more as we get into the second half of the year. So, the mix does become richer when we move in that direction.

Actually Combo Chip is the 3G and application processor combo.

Right.

And I guess you are willing to give us sort of an order of magnitude, how much the Combo Chip represents kind of now. Is it any meaningful percentage revenue now?

Yes. I think we don’t want to get to that level right now.

Okay. That's fine. Just one final question with regard to the margin improvement you talked about with the XScale business. I guess the largest component of that margin improvement will be when you start moving the bulk of that business to a foundry. How should we look at the ramp up of the margin improve in that business? Is that sort of a calendar 2008 phenomenon, how should we think about the ramp up of the margin improvement in that business?

None of this is new from what we had said, previously which is that from the acquisition date literally through the end of calendar '07, the three things I talked about, the new design of the chips and then Intel, and then moving Intel to a foundry model are the things that will take us from the mid 20's to 40%. To improve our margins beyond 40%, we need to move into them our own foundry model type of business, and that will happen by the beginning of '08.

Okay.

Calendar '08.

Right. Okay, thank you.

And your next question comes from the line of Ruben Roy of Pacific Crest Securities. Please proceed sir.

Yes, thank you. Sehat I had a quick follow-up on a previous question on the video processor. You mentioned some customer traction that you are seeing already. I was wondering if the traction there is mostly today on the storage side perhaps on within Blu-ray type products etcetera or if you are seeing some traction within actual TV OEMs as well.

Yes, actually you are right. Originally the attractions were on the, was spotted on the Blu-ray, because that’s the most obvious place where people are spending $100 plus for their Blu-ray box. They do really want to see the best quality from their player. As I said earlier, probably the big screen TVs as their many artifacts. That's part of the nature of the compression. Like the standard DVDs, when you will playback on HDTV it will look just horrible, if you don't do any additional processing. So, a lot of high-end Blu-ray players realizing that they are first generation products are having a lot of complaints from the customers, when they playback all the content. So, a lot of customers are quickly redesigning their box. The next generation box they include advanced post processing technology to take care of this problem. Now that's the first phase. Now we are already start seeing some customers on the high-end and the very high-end TVs are also starting to realize that when they are selling $2,000 to $3,000 TVs, they also want to make sure that people that use low-end optical players or even the older DVDs, we still have very good qualities on their TVs. So, the benefit actually is important on both sides, both on source side as well as on the TV side. So, I don't see any way to get on this because there will always be a low-end players. So, there will always be high-end TVs they want us to look good even though people are using low-end players. Vice versa, there are always people they buy high-end players but maybe their TVs are still like two years old or last year model. They don't have this capability. So they also want to have better picture quality.

Okay. Thank you, Sehat. I had another question on the applications and communications processors. I was wondering if you can give us an update on the structure of your, one of the advantages of your product as your architectural license with the ARM. I was wondering if there were any changes now that the products are completely under Marvell. Are there any restrictions on the timing of how long you have that license or any other changes that may have come about, now the products are completely under Marvell?

Yes. Okay. So, in terms of architectural license, we have I believe, I could be wrong here, but I believe, we are the only company in the world to have all the architectural license from ARM. They span from V5 to V7, so V5, V6 and V7 instruction sets. So, we have no restrictions whatsoever that I know of in terms of faster develop, no transaction at all. Okay, so we can build anything we want. We can be build single issue device, we can be build dual issue device, we can be build thousand issue devices if it makes sense. So, we have to need flexibility to do basically develop anything that we want for this market. And we are doing so, obviously carefully to make sure that we don't overkill it, so we don't build something that's not needed in the funds. But, I can tell you that we are actively working on new generation of processors, with the goal of making the processor to run even faster and even lower power at the same time. Our goal is to allow our customers to, as I said earlier, to incorporate very sophisticated operating systems in the phones and to make the phones again to be usable and long battery life at the same time.

Great. Thank you, Sehat.

And your last question comes from the line of Ross Seymore of Deutsche Bank. Please proceed sir.

Thanks guys. Just a couple of questions. First on the XScale side of the business. When you talk about the design wins, are more of those designs wins on the baseband or the apps processor side of the business?

Both.

So, its pretty much 50-50?

The way you look at it is, there are people that don’t have the time to switch the baseband, but they want to have much better quality for the applications. They are using the application processor first. So, they will develop the Win CE or the Linux platforms on top of that, put forth all of the application into the device, build the user interface and so on. But for people that have the bandwidth, they are now settled with backward compatibilities with exiting programs. Those people starts with the Combo Chip with the integrated baseband and application processors to get smaller footprint and smaller phone factors instantly. So, we have both types of business. In the long run, if people use even the application processor, one-by-one over the next few years will hope that they will also move to the combo solution as well.

Okay. And then I think you mentioned on the Combo Chip that it was a 3G solution. Can you give us a little more color on kind of what generation of 3G is that? Is that a UMTS or HSDPA? What level is that that you are offering?

Yes, the productions at UMTS, the HSDPA is in the qualification stage.

Okay, so you are sampling HSDPA, and is that at full speed, half speed, single chip, baseband, or single core baseband?

I don't have the right details. It's obviously a single chip. And it missed the (CE-ATA) requirements. That is the only thing I can say.

Okay. And then the last question on the margin side, George. On the gross margin you are pretty clear about being a little bit better both in the quarter that you just reported and looking forward. Is that solely because of the improvements that you gather finding on the Intel side, or is there stuff with the foundry pricing being a little bit more favorable or mix, or something along those lines on the core Marvell business as well?

No, I think Ross it's a combination. Again please remember that we have the operating experience with the Intel group. So we were making estimates of what we thought would actually take place and now we have some actuals. So, we are pleased to say that the actuals are little bit better than we had planned. So that's the impact on the XScale stuff. But, no, we just continue, I wouldn't say its foundry pricing. It's more of just that our own products continue to do very well in manufacturing.

Okay, thank you.

Okay, thanks.

I would now like to turn the call back over to Dr. Sutardja for closing remarks. Please proceed sir.

Thank you, Santali. This completes our Q4 fiscal year 2007 conference call. I would like to thank everyone for joining us and look forward to updating you in the next quarter. Thank you.

Thank you.

Thank you for attending today's conference. This concludes the presentation. You may now disconnect. Good day.