Welcome to the RF Micro Devices Q3 ’09 conference call. During today’s presentation all parties will be in a listen only mode. Following the presentation the conference will be opened for questions. (Operator Instructions) This conference is being recorded Tuesday, January 27, 2009. I would now like to turn the conference over to Doug DeLieto, Vice President Investor Relations of RF Micro Devices.

At four o’clock today we issued a press release. If anyone listening did not receive a copy of the release please call Janet [Jassman] at the Financial Relations Board at 212-827-3777. Janet will fax a copy to you and verify that your name is on our distribution list. In the meantime, the release is also available on our website www.RFMD.com under investor info and on PR Newswire. At this time I want to remind our audience that this call includes forward-looking statement, within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, representations and contentions and are not historical facts and typically are identified by use of terms such as may, will, should, could, expect, plan, anticipate, believe, estimate, predict, potential, continue and similar words although some forward-looking statements are expressed differently. You should be aware that the forward-looking statements included herein represent our current judgment and expectations but our actual results, events and performance could differ materially from those expressed or implied by forward-looking statements. We do not intend to update any of these forward-looking statements or publicly announce the results of any revisions of these forward-looking statements, other than as is required under the federal securities laws. Our business is subject to numerous risks and uncertainties including variability in quarterly operating results, the impact of global macroeconomic and credit conditions on our business, the rate of growth and development of wireless markets, risks associated with our planned exit from our wireless systems business including cellular transceivers and GPS solutions, the risk that restructuring charges maybe greater than originally anticipated and that the cost savings and other benefits from the restructuring may not be achieved, the risk that…

Our December 2008 quarterly results reflect a challenging macroeconomic environment that muted consumer activity and triggered aggressive cuts in inventory across the supply chain. Through much of the quarter our customers struggled to determine real normalized demand in an effort to calibrate their actual sourcing requirements. The month of November was particularly challenging as customer demand literally dropped week-over-week throughout the month in response to the uncertainties surrounding the global end markets. For RFMD the impact of end market softness was compounded by excess inventories of components and sub assemblies at our customers. These inventories had been built in support of expected growth in the December quarter that failed to materialize. As a result, component shipments where disproportionately impacted as excess component inventories had to be consumed by a lower than planned demand. In the first few weeks of December we began to see early signs of improvement as we indicated at various investor conferences. The rate of push outs had slowed and customer inventory levels were coming down. Looking at inventories today, we believe inventories of our components at our customers are beginning to level off based on the return of the sustained level of component pulls. However, we have very limited visibility in to end markets and we believe our customers are still unable to pinpoint with any certainty real normalized demand. Despite the challenging environment, the RFMD team executed extremely well against many important organizational goals during the quarter some of which were in response to recent events and some had been in place for a number of quarters. I’ll walk you through those achievements and I’ll go in to detail about what we’re seeing today. First RFMD is successfully diversifying our customer base and expanding our product portfolio through a significant increase in innovative new product…

Just as a reminder, as Doug pointed out earlier in the call, my comments and comparisons to income statement items will be based primarily on non-GAAP results. However, I’ll start with a few comments about our GAAP results. On January 21st RFMD filed an 8K describing non-cash asset impairments totaling up to approximately $750 million. Consistent with this 8K our GAAP income statement reflects $673 million for the impairment of goodwill and intangibles related to previous acquisitions. $47 million for the impairment of primarily wafer fab plant and equipment and approximately $24.5 million for inventory reserves. The asset related non-cash charges are based on detailed valuation analysis that are performed routinely and reflect the current macroeconomic environment. These charges taken in the quarter combined with the results of our normal operations result in a GAAP loss per share of $3.09 for the December quarter. Before I cover the individual P&L and balance sheet items I’d like to comment on our focus on return on invested capital and how its consistent with RFMD’s proactive recession management. First, we exited businesses that were using cash and underperforming on return on invested capital. Second, we are consolidating manufacturing facilities and reducing production rates to manage working capital and lower manufacturing costs. Third, we’ll match manufacturing capacities and expenses with the near term demand outlook. As a result, we’re managing for cash flow and expect strong cash flow in spite of the reduced demand environment. Longer term as the demand environment improves RFMD is structured for exceptional P&L leverage and continued strong cash flow. I’d like to recap some of the major steps we’ve taken thus far. We’re aggressively reducing manufacturing expenses. These include steps we’ve taken to reduce labor and material costs in our UK fab, our exit of the four inch fab…

(Operator Instructions) Your first question comes from Edward Snyder - Charter Equity Research.

One for Bob, one for Dean; Bob, I know you supply all the technologies but you’re probably more favored in Edged, 3G and Nokia than are a lot of the other vendors and given their share loss there why shouldn’t we expect you to suffer maybe a disproportionately high impact from Nokia’s downside over the next two quarters? Then Dean, on the inventories I mean they were down 9% sequentially without the $25 million write off and would have been up 7% and certainly days in sales went up definitely too. Do you feel like you’re still chasing demand down by cutting utilization or do you think you’ve gotten ahead of it at this point and have dialed in production that will allow you to burn off most of that excess inventory over the next quarter or so? Then, how was the $25 million split between raw material, WIP and finished goods?

I believe Eric Creviston is going to address the question about 3G demand.

Can you repeat the question again I didn’t quite catch the gist of it. Was it regarding Nokia demand in particular and our share there and in Edge?

Well yes, Nokia more so. I know you’re spread out all over but their the big gun here and your product sales to them favor more heavy to 3G and higher end products. I know you ship all of them but compared to the other vendors like Inox-Sys and Skyworks and all that do a lot more GSM and Edge, you’re probably more heavier in the high end and Nokia’s lost share there. Reports have shown they’re suffering on that more so than most other areas. So, why won’t Nokia’s downside hit you more proportionately harder than say some of the other vendors?

I think your hypothesis is basically true with where we are today. We have a large share in there with 3G but I would say our share there is balancing out pretty quickly. We’re gaining share in GPRS rapidly throughout this quarter and we expect to gain it throughout this year again kind of coming back from maybe the opposite effect of what happened last year so we’ll have a much more balanced portfolio with Nokia going forward. As well, I’m sure you’re aware we’re doing a lot on the 3G front outside of Nokia too. We’ve announced a lot of wins with Samsung in particular of course and we’re chasing and closing in rapidly on RIM which I think is one of the areas where Nokia is potentially losing some share in that Smartphone segment today. So, I think near term and in particular in this quarter what you’re saying is true and we’re working hard to just getting back to where we need to, to compensate for that.

Will Nokia – they made a big deal of moving away from Japanese suppliers because of the Yen problem. Is that neutral to you, up, down, how does that affect you?

It’s strongly up for us. I think you can understand who the incumbent is there in GPRS that got our share last year. So, I think that helps explain part of the dynamic for why we’re seeing a strong shift back there.

Then Dean on the inventory?

On the inventory that was really midway through the quarter before demand really seriously declined. I think the company did a really outstanding job of chasing that demand down during the quarter. Turning off factories, throttling back the supply chain so I think the inventory build that you saw was largely the result of some longer lead items where we didn’t have as much control over, particularly some of the silicon based products. So, to answer your question on whether we have a good handle on that going in to the March quarter, we absolutely have a firm handle on inventory levels and like I said our production plan is significantly lower than our revenue plan by a wide margin for the quarter. That of course, helps cash flow, it’s going to reduce inventory but the under absorption in the manufacturing facilities will have an impact on gross margin during the March quarter much like it did during the December quarter.

But I’m just curious is it stabilized now? You’re not chasing more?

We are not chasing demand down. We have had a production plan in place for a few weeks now that is less than our revenue plan. Like I said, any inventory increase that you saw was simply longer lead items that were making its way through the system. To answer your other question about what was the breakout on a percentage basis of the inventory reserves, the vast majority was finished goods, second was raw materials with WIP being third. Finished goods would have been well over 50% of the total, raw materials were probably in the 30% range but we include wafers in raw material so that’s the best answer I can give to your question.

But essentially though we still have a lot of goods in finished inventory carrying the lower gross margins of the period, right?

Well we still have a considerable amount of gross inventories, that is correct.

Your next question comes from Ittai Kidron – Oppenheimer & Co. Ittai Kidron – Oppenheimer & Co.: Dean, just to follow up on the inventory question, it sounds like you guys are assuming that by the end of March inventory is going to be resolved and should production in June then be pretty much on par with your revenue plan?

That’s the current thinking. I think that during the March quarter demand across the supply chain and production more normalize in nature and therefore going in to the June quarter we’ll have some items definitely benefitting us in terms of gross margin. Firstly, we have announced taking some capacity out of the system and by then that will have been fully realized. The second thing is we do think inventory levels will be more normalized and there will be increases to our production plan thus improving utilization rates across the supply chain not only in our wafer fabs but also in our Beijing operation and Shanghai operation as well and also Germany. Ittai Kidron – Oppenheimer & Co.: Is part of the big write offs you had this quarter, do they include the UK facility and the four inch fab?

There was some material related to the UK facility. The actual inventory reserves themselves they do not include anything related to the four inch facility but there was a small $1.4 million charge related to restructuring that was inventory related in the four inch facility. Ittai Kidron – Oppenheimer & Co.: I guess I’m trying to gage if your production is pretty much in line with revenue or more so in the June quarter, why shouldn’t we see a very strong bounce back in gross margins back to the upper 20s, low 30s especially if you write off the UK and the four inch fab facility?

I think that’s already been done. Any effect of inventory in the UK or the four inch facility has already been taken care of and its reflected in the December results. That’s behind us if you will. Ittai Kidron – Oppenheimer & Co.: So the improvement in gross margin in June you expect it to be a sharp one, or a light, or a moderate one?

Well let’s just say assuming we don’t have the type of inventory reserve overhang that we had in the December quarter and production begins to improve then you can see gross margin can improve very rapidly. I mean, 12 points of margin impact because of inventory reserves in the December quarter, you add that back and margins actually improve sequentially. So, we’re very optimistic about improved margins beginning in the June quarter and then going from there. Ittai Kidron – Oppenheimer & Co.: Just lastly on your operating profit targets, can you give us a rough estimate I mean outside of this quarter where you’re absorbing a lot of things, on a normalized basis what are you trying to get your revenue run rate to get to breakeven, on a pro forma basis what do you expect that number to be done once you’re done with your cost cutting? And, with regards to your $80 to $120 free cash flow target is it fair to say that those targets will be achieved mainly through balance sheet improvements rather than pure operating profit contribution.

As part of the operating performance of the company, even at the $200 million revenue level that we saw this quarter, if you more normalize the gross margin by taking out the inventory reserves you would have seen that operating margin would have actually been somewhere greater than 5%, 5% to 7% of sales. So, that wouldn’t have been bad performance at a $200 million revenue level. So, in terms of free cash flow going forward I think some of that will come from balance sheet improvement and focus on working capital. I already mentioned reductions in inventory, tightly managing DSOs and payables and so forth. However, we believe the business itself, the underlying operating results of the business is what’s really going to drive free cash flow because as you recall, we have a little better than $80 million a year in non-cash depreciation expense that’s an add back and capital expenditures are going to be probably $15 million or so for the coming fiscal year. That’s what really allows you to work in to the $80 to $120 million in free cash flow. It’s really coming from the core business performance and any help from the balance sheet will be kind of a safety net if you will.

Your next question comes from Harsh Kumar - Morgan, Keegan & Company. Harsh Kumar - Morgan, Keegan & Company: I know you didn’t talk about this in the press release but I’m going to ask it anyways, could you give us your cash flow targets for the March quarter?

We basically have said that cash would improve sequentially so we haven’t given a specific number for cash flow. But, we are extremely confident in the ability to improve our cash balance and I’ll caveat that with what we said about potential bond repurchases. Needless to say we don’t expect it to be quite as strong as the December quarter but certainly a good quarter in terms of cash flow. Harsh Kumar - Morgan, Keegan & Company: Also, historically I think you guys have broken out NPG versus CPG, kind of a housekeeping question, any chance you can get that breakout?

The breakout is roughly the same as it’s been. Both business units saw the similar type of sequential declines. Nothing really dramatic changed in the mix between CPG and NPG revenue. Harsh Kumar - Morgan, Keegan & Company: Last question for me, I know that everybody has asked about excess inventory, I was wondering if I could get some color, maybe you could just look at the industry as a whole from what you can see and what you’re willing to talk about Dean and maybe talk about how much excess inventory is there in the system and channel combined? Any color would be helpful.

Well, I think I’ll let the experts Eric Creviston and Bob Van Buskirk weigh in on what they see in their respective business units.

I guess in the cellular industry we have been quite clear about the visibility being pretty low right now. There’s been several reports out there that seem to be consistent with what we’re seeing as well which is there’s somewhere in the order of four to six weeks probably of retail channel inventory so that’s the kind of inventory that’s created after the sell in numbers that you see that are reported at each of the handset OEMs. I think what was far more interesting was really the component inventory that was in the system in the September quarter in that effect. What we saw was that there were several of our large customers at least that were building towards an up quarter in December during the September quarter so there were some component pulls and also some components that were built in to sub assemblies that were meant to be completed in the phones during the December quarter. So, halfway through the December quarter or maybe a third of the way through the December quarter, whenever the demand really started falling off they begin to really shut off new component consumption as the were burning off those inventories. You can imagine, in a 1 to 1.2 billion unit market there’s a week to a week and a half of just at the component level excess inventory, that’s 8% to 12% of a quarterly number. So you get real quickly to where if they’re building up to 12% extra and then they burn that off in December that’s a 24 point swing even in a flat market. So, I think that dynamic is really significant in the December quarter. Now, we think most of that is out of the way now. Again, the saw that December wasn’t going to be a normal seasonally up year so they really worked down all the component level inventories. Now, in March, that’s the question about the retail channel and how much excess is there and that could easily be another one to two weeks of supply I suspect that could burn off from here at the retail levels.

In NPG clearly a different set of dynamics, we rely on turns business also and so what would typically happen to us is while the turns would materialize we wouldn’t get a corresponding inventory buildup also. The one end market where we do have a little inventory overhang that actually was compounded as Dean said in the December quarter was in the cable TV end market. So, I would say coming out of December all of the end markets that we serve in NPG are I would say steady state in terms of inventory with what we would expect the demand was in December with the exception of cable TV where we had a little back up. We do expect that that would be burned off probably by late in the March quarter.

Our next question comes from the line of Mark McKechnie - American Technology Research.

The first question I have is you said something about business falling off ever week in November but then stabilizing in December, is that still the case that your order levels are kind of stabilizing here?

As far as the order rates go what we saw in the mid November or beginning of November was the push outs that we talked about kind of week-over-week and then those kind of leveled off where we didn’t see the push outs and saw the demand kind of find the bottom. Your question on the order rates, we started off the year obviously with some holidays then we hit it in the Chinese New Year but yes, order rates have returned. Not as high as the levels we had seen back in September but yes, we found the bottom and we’ll see where things are headed.

In terms of technology impact, Edge GSM, CDMA wideband, CDMA, I mean I know it’s a lot of proprietary information to your customers but anything you can tell us about was it weaker, stronger in any area do you think from an industry basis or even from your own business level?

You’re talking about the December quarter now sequentially from September?

That’s right.

I think from what we saw at least 3G definitely held up the best. We had relative strength there definitely and Edge was in our case was the worst hit and we are of course exposed there quite a bit but I think just in terms of percentage change even we think Edge was the most affected.

I would just add to that, throw a new standard in here that the 3G race is underway in China so clearly TD-SCDMA has risen to the top in terms of the standard from the equipment side of things.

Actually I was going to ask a little bit about China. I figured you’d be participating on the TD uptake but on the infrastructure side are you participating at all on the – I guess they haven’t awarded the business yet but will you participate on the wideband or on the [EV-DO] upgrades?

Historically the multimarket group has been pretty much standards neutral and that’s still a position we have so the answer is yes, we’ll participate in proportion I think to the build out of the standards in China so TD-SCDMA wideband, CDMA and really CDMA [EV-DO] also. So, we’re excited about that. I think it’s a little bit early to take many of those orders to the bank. As Bob said we just hit the lunar New Year but we did see some very early signs in January that that activity was heating up.

I mean you mentioned [Wawait] and was it ZTE, a couple of Chinese customers that were up sequential, did I get that right?

I did mention [Wawait] being up sequentially. I didn’t comment on ZTE but we are seeing some strength in order activity out of ZTE.

Is that handsets, infrastructure, or both?

That’s primarily infrastructure but it’s a bit of both.

Then my one last one and I’ll be quite, for Dean, on this asset write down, I’m guessing a lot of it was for the purchase you made, but how was that being amortized? Was that like a 10 year thing or a 30 year? How were you amortizing it and how is that going to change how it rolls to your income statement going forward.

I would expect the amortization expense is going to go down by about $2 million a quarter to roughly $5 million a quarter.

So your income statement is lining up a little better with your cash but not quite yet.

No, not quite, not with $80 million of depreciation.

$80 a year?

A little better than $80 a year, correct.

Then amortization will be sort of up $5 a quarter, so about $100 of non-cash expenses.

Yes, about the low $100 range of depreciation and amortization.

Our next question comes from the line of Todd Koffman – Raymond James. Todd Koffman – Raymond James: Just a clarification Dean, when you made the comment about the gross margins being down in March versus December, the December quarter margins you had talked about had a 12 point hit relating to an inventory charge off. Does the March comment reflect as well an inventory charge off?

I want to clarify what I said about gross margins, I said there would be continued downward pressure on margins in the March quarter but I didn’t say that margins would be down in March. I think the inventory reserve and the impact there, while I can’t guarantee that’s going to be a one-time event we don’t expect anything of that magnitude or near that magnitude in the March quarter. So then you strip that out and then you’re left with the under absorption variance which we actually saw some in the December quarter. So, you’re probably somewhere in between here. I don’t expect margins will be as bad as they were in December but then again, they don’t come snapping back and bouncing back to the kind of range that they could be without the manufacturing absorption variances. That’s a little bit later in the year before that scenario unfolds. So, to answer your question I would expect some type of margin improvement in the March quarter.

Our next question comes from the line of Michael Burton – Thinkequity, LLC. Michael Burton – Thinkequity, LLC: Can you talk a little bit about what you consider normal seasonality [inaudible] margin how it’s changed year-to-year, CPG and NPG, I think are a little bit different. And then how that’s going to play out? Are we still expecting NPG to hit around 250 or can we expect below that at this point?

First regarding the cellular business, March quarter we would consider normal seasonality to be about 12% to 15% down in revenues.

Seasonal for the NPG business in general is rather flattish coming off the December quarter. It’s been that way for the last three years or so. So, I would say flattish to down 5%, maybe up 5% on a normal seasonal quarter. Obviously as Bob indicated we don’t expect that in the March quarter. As for hitting the 250, I don’t think we’re going to be quite able to make it to that. If you do the math on our percent of sales for total results you see we’re probably going to come within 10% or something of that number. In this environment quite frankly I feel pretty good about that but we’re not quite going to stretch all the way to the 250 we think. Michael Burton – Thinkequity, LLC: A couple for Dean, your cap ex obviously was down a lot this quarter, can we expect to see that continued going out or is there any ramp up in cap ex expected? Then, how much of the 2010 debt is outstanding currently? Can you give us an update there?

In terms of cap ex, we don’t see any significant capital expenditures needed to service even demand that was in excess of the September numbers for the next four to eight quarters. In fiscal year ’10 we expecting something in the $15 to $20 million for cap ex and probably trending towards the lower range of that. Even going in to fiscal ’11, we don’t foresee the need for significant capital expenditures. So, I think the work that we’ve done to significantly reduce the die size of our products is giving us a lot more manufacturing capacity if you will. When you reduce a product die size by 40% then you can see that gives you a lot of additional gas mileage. Then the last part of your question was? Michael Burton – Thinkequity, LLC: On the 2010 debt?

It’s in the $200 million range.

Our next question comes from the line of Edward Snyder – Charter Equity Research. Edward Snyder – Charter Equity Research: Just a follow up here, I want to be sure here and clarify what we said between production and between gross margins. So, you’re expecting a rebound flat to slightly up gross margins in the coming period and operating margin too because you’re not expecting another big inventory write off? Or, is production being lowered so much in the current period from the late December period that the lower utilization will more than offset a better inventory situation in the coming quarter? I’m just trying to get an idea of the direction we’re heading.

That’s a good question. The two things that are going on that impact gross margin the most, the inventory reserves we wouldn’t expect significant inventory reserves again in the March quarter. Now, obviously I can’t guarantee that – the way that we compute inventory reserves by the way, is strictly a formula based approach that takes a look at forecasts and compares the inventory on hand so it takes essentially the emotion out of the decision. Now, we wouldn’t expect a significant inventory reserve in the March quarter. However, we would expect under manufacturing variances or the capacity utilization to actually be a bit lower than in the December quarter because remember in the December quarter we really started responding in the November type time frame so it takes a while to chase demand down. Now that we’ve chased it down we are operating our factories at a lower utilization rate. Net of all that we would expect gross margins to improve in the March quarter and then get back to more normalized levels as all the actions we’ve taken to reduce manufacturing capacity take hold and as demand begins to normalize and utilization rates begin to go up in the June quarter. So, March not a disaster but not where we would like for margins to be. June, we’re heading in the right direction. Edward Snyder – Charter Equity Research: So basically what you’re saying is you got a little more downside from a full quarter of lower utilization but you’re not chasing it any more you kind of set it there at the end of December and now we’re just going go through a whole quarter of that. That’s the downside. The upside is you’re probably not going to take a big inventory hit in this quarter and then the following quarter utilizations may actually go up depending on demand and as you burn off inventory your utilizations would naturally pull up some more because you’re no longer spooling out what finished goods you’ve got to get rid of, right?

That is correct. If demand doesn’t materialize there’s the opportunity to take additional actions in the supply chain to size the supply chain to match the demand. So, we constantly are monitoring demand signals and capacity and so forth and have weekly sales and operations planning meetings. Edward Snyder – Charter Equity Research: In essence I mean we’ve got two quarters of actions that are only going to really help cash, lower utilization and burning off some finished goods, you’re going to have a good quarter relatively speaking from cash flow. We really don’t have to worry about cash too much until we start seeing demand start to pick up because there you’re going to have to try and get utilization maybe and even maybe some more inventory, right?

Well, I don’t know – I think we’re going to rely on our short cycle times to respond to the pickup in demand. You’re right, as the demand increases that tends to increase working capital, however we think we can manage our inventory turns for the year actually at higher levels than they are today. So, it’s a companywide effort on inventory and working capital management. I’m not as concerned about the coming ramp or the increased demand in the back half of the year. It would be a good problem for us. Edward Snyder – Charter Equity Research: What’s your cycle times now if I might ask?

Four weeks or so total.

Your next question comes from Analyst for Uche Orji – UBS. Analyst for Uche Orji – UBS: Coming back to restructuring it appears that you have significant under utilization and I’m just wondering if there could be additional restructuring in the near term so as to reduce your total available capacity.

As you recall, we did announce that we are closing fab one, our four inch facility and converting to six inch. Dean has commented earlier that we had some restructuring and some material. There will be some severance but nothing major there and we also wrote off in that facility so from a fab perspective we’ve pretty much done that so I’m not sure what else you’re referring to.

We’ve done it but it hasn’t been reflected in the P&L yet. I mean, I think that’s what we’ve been trying to signal that a lot of the actions that we’ve announced and are taking haven’t actually worked their way all the way through to the income statement and it’s probably the June quarter before you really start seeing those benefits. Analyst for Uche Orji – UBS: So when you are done with your restructuring what will be the net production in your capacity?

The four inch facility was roughly 10% or so of total [inaudible] capacity but it was disproportionately high in terms of manufacturing expense. So, we’re taking out a significant amount of costs without taking out the ability to ramp production. I think that’s the key. Also, the UK facility which is probably 20% to 25% of total capacity, that facility is still operational but just instead of running it on a 7/24 operation we’re running it single shift five days per week. We’ll run it at lower levels and lower utilization until we see demand start to come back. That also is going to represent a sizeable labor and material savings for the company. Analyst for Uche Orji – UBS: Was there any impact due to pricing on the gross margin or pricing was stable?

Pricing was about what you would expect. I think we’re on the same type of pricing curve that we’ve been on for the last four to five years.

Your next question comes from Tore Svanberg – Thomas Weisel Partners. Tore Svanberg – Thomas Weisel Partners: I understand the guidance part but just qualitatively should we expect the March quarter to be down about the same as the December quarter or will it be somewhere between seasonality and what you experienced in the December quarter?

What we guided to was we weren’t given revenue guidance. I believe in Dean’s comments, he said internally we’re planning on an internal forecast for revenues to be down more than seasonality. Tore Svanberg – Thomas Weisel Partners: Then moving on to operating expenses, you managed those very well in the quarter. As we move in to March do you expect a similar type decline or will it start to level off a little bit?

Operating expenses that I want to make clear that the reported number of $54 million was actually helped by a $3.5 million IT credit so on a normalized basis it was around $57.5 million. Now, there are some things that tend to increase operating expenses slightly in the first part of the year such as increased FICA taxes so we may see just a bit of a tick of operating expenses in the March quarter but nothing substantial. We are very, very tightly monitoring our op ex and doing everything we can to control that line. Tore Svanberg – Thomas Weisel Partners: Just finally, between the two business units again, just qualitatively looking at March, any segments that you would expect to be up sequentially? Any sub segment? Maybe China?

I would think that the wireless infrastructure and cable TV for us have a chance at showing some sequential growth.

Your next question comes from [Banc Nothomooney] - J.P. Morgan. [Banc Nothomooney] - J.P. Morgan: Just a follow up on the operating model, given that you’re expecting revenue to be down say at least 12% to 15% depending on seasonality for CPG and NPG, would you expect to see a corresponding reduction in operating expenses or do you feel that the current level of operating expenses is adequate and consistent with your revenue model?

No, the March quarter we wouldn’t expect to see a corresponding decline in operating expenses. We do expect revenue to begin returning to more normalized levels in the June quarter. Now, obviously if that doesn’t materialize then there may be more work to be done on operating expenses. I think what we’ve been signaling to the investment community is that we’re going to be very proactively managing the business during this recession to match the manufacturing capacities and operating expenses with the demand environment. So, if the demand doesn’t materialize then we’ll make adjustments as necessary and size operating expense within a relevant range that is close or near our operating model as a company. [Banc Nothomooney] - J.P. Morgan: But as things stand you don’t expect to cut operating expenses unless you see a dramatic further decline in demand in March quarter?

We don’t see those changing dramatically in the March quarter. [Banc Nothomooney] - J.P. Morgan: Then are you seeing for the debookings this quarter you said there was still a lot of cancellations in the December quarter, do you see that continuing or have things stabilized from a demand perspective?

From a demand perspective we’re not seeing any order cancellations or push outs at this time. [Banc Nothomooney] - J.P. Morgan: Given that you said visibility is really low but you’re still expecting that the June quarter will be kind of the bottom for demand? Is that a fair assessment of how you view the situation?

What we’ve commented on is more along the lines of our production. What we are expecting is our production to be significantly less than our revenues in the March quarter and what we were talking about is bringing back up our production to match closer to what we expect the revenues to be in the June quarter. [Banc Nothomooney] - J.P. Morgan: Which is still likely to be down from the March quarter based on your current expectations or is that something it’s too early to give any guidance on?

It’s too early to give guidance but I think what we’re trying to make sure that the investors understand and Eric covered this fairly well when he described it that customers were gearing up for a strong December, they adjusted their components that they were purchasing and some of their sub assemblies that they built themselves in the December quarter which in turn means we produced less than they actually assembled. Then he commented that in the March quarter he believes what’s being digested now is potentially the inventory between the OEMs and the retailers. That’s what he was talking about, taking out some of that demand so that’s when your scenario, if those two hypotheses are correct, yes we would expect June to be up. But, it is way too early for us to tell because of what we’ve commented about the lack of visibility and our customers trying to understand this as well. [Banc Nothomooney] - J.P. Morgan: One final question on the balance sheet, with regards to your inventory level again, there’s no specific guidance but from an inventory dollar perspective do you see the magnitude of the sequential decline to be similar in the March quarter compared to the December quarter.

I would expect it to be greater.

Your next question comes from Stephen Ferranti – Stephens, Inc. Stephen Ferranti – Stephens, Inc.: A question for Eric I guess, is there any difference in terms of demand trend that you can talk about relative to say POLARIS shipments versus your front end shipments in the December quarter?

I guess none other than what I had said earlier which was that we saw Edge disproportionately down and our POLARIS shipments are all Edge of course and higher dollar content there. So, certainly as a percentage of sales they were down disproportionately more than the others. Stephen Ferranti – Stephens, Inc.: I guess most of my other question have been answered but I just wanted to clarify on the write off of the four inch facility it sounds like that was done in the December quarter so I’m assuming that the fixed costs associated with that would essentially not impact your P&L in the March quarter and then you might have some additional clean up in terms of personnel and such that might take the savings in to the June quarter as well. Is that a fair summary of it?

The impairment of the facility was done during the December quarter but it’s not going to be a huge depreciation savings if you will for the March quarter. It’s mainly going to be related to the cash cost if you will labor and so forth which is yet to work its way all the way through the systems. So, that’s ongoing between now and the end of the March quarter.

So you’ll see part of the savings starting in March for that and you’ll see the full benefit in the June quarter and as the inventory works its way through you’ll see most of that in June and the full effect in September. Stephen Ferranti – Stephens, Inc.: The last one for me, I know it’s obviously a volatile period right now but where do you think metrics like DSOs and inventories might sort of level out once we get through this period? I know Dean you talked about some sort of internal goals you had set for improvement there. Anything you could share with us there?

We’d like to see inventory turns reach five as a company for the year, maybe even exiting the year a little bit than five turns. With DSOs we’d like to maintain historical type levels in the upper 30, low 40 day range. DPOs, or days payable I think you’ll begin to see some improvement there where as in the December quarter you saw a bit of a lag effect of material that had been on order for some period of time and the resulting payables associated with that is we get back more to normalized levels I think you’ll see some actual improvement in DPOs. So, we would like to try to match our DPOs roughly with our DSOs.

Your next question comes from [Aaron Huson - Lenexa Globe]. [Aaron Huson - Lenexa Globe]: I was wondering if you could give a little more color on one of your opening comments about customer pull picking up so far in January. I mean it’s pretty clear that the Chinese handset market picked up a little bit ahead of Chinese New Year. Is it just that or is it broader and did it spread in NPG as well?

My comments there about the customer pulls had more to do with the December quarter, the end of December and that was with our customers that are on [inaudible] not with our customers that are on POs and that is traditionally our Chinese customers are on POs. [Aaron Huson - Lenexa Globe]: Have those pulls continued at that same pace so far in January or did they fall off again?

Right about the same pace. [Aaron Huson - Lenexa Globe]: You talked about the shutdown of the four inch capacity, is that a permanent shutdown or is that capacity you would bring back on line if your demand recovered in a year or two?

When you impair an asset under FAS 142 you currently have no plan to reuse or no utilization of that facility is anywhere in your business plan. Now, clearly the facility is still there and it’s available but we have no current plans to use it. It’s inherently more expensive to do four inch production than six inch so we’re going to see an improvement in our gross margin simply by producing all in six inch versus four inch.

Your next question comes from Suji De Sliva – Kaufman Brothers. Suji De Sliva – Kaufman Brothers: Can you talk about where the utilization is I know there are a lot of moving parts? And where you think utilization trends in the March quarter.

We have taken utilization way, way down for the company I would say under 30%. So, like I said our production plan is significant lower than our revenue plan. Obviously, those utilization levels are not going to remain at 30% so either demand starts coming back and utilization starts improving or you have to address the size of your supply chain which we said that we were very actively monitoring. But, we believe a lot of what we’re doing now is the results of inventory in the channel and the compounding effect of inventory. So, a more normalized demand environment will naturally improve utilization rates. Suji De Sliva – Kaufman Brothers: And your current March expectation is it trends back up?

No, what I was saying is we will be below 30% for March. We see that trending back up in the June quarter. Suji De Sliva – Kaufman Brothers: Are margins being impact proportionately for CPG and NPG? Or is NPG holding up because of the nature of its business?

Actually if you recall earlier in the year when we talked about our expectation for fiscal ’09 we talked quite a bit about synergy that we expected to extract from RFMD’s supply chain. Frankly, sitting here today I’m happy to report that a lot of those synergies actually did come in and our standard gross margins or direct gross margins if you will, before inventory and manufacturing variances were very strong, very strong. But, we also had the inventory reserve issue to deal with so we were also impacted but we established the goal earlier of trying to enter the fiscal year with a 50% all in gross margin, fully realized gross margin and frankly if the March quarter, a few things go in our favor we actually have a chance of achieving that. But again, from NPG’s standpoint it was a good standpoint other than the reserves we had to absorb. Suji De Sliva – Kaufman Brothers: How should we think about the second half of ’09 as the die shrinks kick in? What’s the margin bump opportunity there?

Well I think the best way to state that is that these products are as competitive or probably more competitive than any product in the market place and I think have an industry lowest cost structure if you will. I think in terms of market share and in terms of gross margin it’s going to be very accretive to where things are today for our similar type GPRS products. Suji De Sliva – Kaufman Brothers: Last question, where do you guys think you are at share of Nokia at the low end and where do you think that can trend by the end of the year?

Nokia low end phones? Suji De Sliva – Kaufman Brothers: Yes, Nokia low end handsets. Where your share is now and where you think it could trend?

We don’t obviously share a lot of detail there. I think it’s been fairly well publicized that our share was well over 75% more than a year ago and had corrected down closer to the 25% range. I think what we’re expecting now is that we’ll be able to go back up to let’s say in the 50% range where we’re getting more like a healthy split of business between 50% and 60% of the total.

Your final question comes from Nathan Johnson – Pacific Crest. Nathan Johnson – Pacific Crest: I just had a couple of quick questions, one on GaN you guys talked a lot about that and it sounds like you guys are progressing well. I was just wondering what percentage of revenues are attributed to GaN and how you expect that to progress in to fiscal 2010? Then similarly I was just wondering what percentage of your revenues came from the transceiver business this quarter and kind of what your expectations are for the next couple of quarters.

As Bob indicated in his prepared comments, we are pretty excited about where we are with GaN. We’re in the final stages of our full high reliability level of qualifications. Unfortunately most of the revenue today for GaN is in the government funding and early prototype builds. It’s only unfortunate in the sense that it’s not as significant as we’d like to see it. We do expect to see GaN as a percent of sales of NPG ramping to the point where you can actually see it probably by the later part of FY ’10. Then again, it will carry with it a disproportionate amount of margin which is also a good thing. So, back half of FY ’10 there will be enough significance in the GaN sales to really talk about them.

As a percent of transceiver sales in the December quarter it was actually down as a percent of sales and we would expect it to stay roughly that way for the balance of the year.

Ladies and gentlemen that does conclude the question and answer session. I’d like to turn the call back over to management for any closing remarks.

Thank you for joining us tonight. As we indicated earlier RFMD today is flexible and agile and we are actively managing our manufacturing capacities and our expense structure to match what we anticipate to be the near term demand environment. We are structuring RFMD for superior financial leverage and significantly improved return on invested capital. We believe our strategy will serve us well in the current environment and as global markets begin to recover.

Ladies and gentlemen this conference is available for replay. To access the replay system you may dial 303-590-3000 and enter in the pass code number of 111124588. You may also dial 1-800-405-2236 and enter in the pass code of 11112458. Again those telephone numbers are 303-590-3000 and 1-800-405-2236 pass code number is 11124588. Ladies and gentlemen that does conclude our conference for today. Thank you so much for your participation. You may now disconnect.