Good morning. My name is April, and I will be your conference operator today. At this time, I would like to welcome everyone to the Silicon Labs Third Quarter Earnings Call. [Operator Instructions] Thank you. I will now turn the call over to Ms. Shannon Pleasant. You may begin, ma'am.

Thank you, and good morning. This is Shannon Pleasant, Director of Corporate Communications for Silicon Laboratories. Thank you for joining us today to discuss the company's financial results. This call is being simulcast and will be archived on our website. The financial press release, reconciliation of GAAP to non-GAAP financial measures and other financial measurement tables are now available on the Investor Page of our website at www.silabs.com. I'm joined today by Necip Sayiner, President and Chief Executive Officer; and Paul Walsh, Chief Financial Officer. We will discuss our financial results and review our business activities for the quarter. We will have a question-and-answer session following the presentation. Our comments and presentation today will include forward-looking statements or projections that involve substantial risks and uncertainties. We base these forward-looking statements on information available to us as of the date of this conference call. This information will likely change over time. By discussing our current perception of our market and the future performance of Silicon Labs and our products to you today, we're not undertaking an obligation to provide updates in the future. There are a variety of factors that we may not be able to accurately predict or control that could have a material adverse effect on our business, operating results and financial condition. We encourage you to review our SEC filings, including the Form 10-Q that we anticipate will be filed next week, that identify important factors that could cause actual results to differ materially from those contained in any forward-looking statements. Also, the non-GAAP financial measurements which are discussed today are not intended to replace the presentation of Silicon Labs' GAAP financial results. We're providing this information because it may enable investors to perform meaningful comparisons of operating results and more clearly highlight the results of core ongoing operations. I would now like to turn the call over to Silicon Laboratories' Chief Financial Officer, Paul Walsh.

Good morning, everyone. While third quarter revenue was down by 5.6% sequentially, we finished near at the top end of our guidance at $119.1 million. We are able to counter top line softness with strong operational performance, yielding excellent earnings leverage. First, I'd like to cover the GAAP results, which include approximately $9.1 million in noncash stock compensation charges. GAAP gross margin was up slightly at 61.2% for the third quarter. R&D investment declined in the quarter to $31.7 million, and SG&A was $27.3 million. The GAAP tax rate was 20.9% resulting in fully diluted GAAP earnings of $0.26, well ahead of our guidance. Turning to our non-GAAP results, the revenue mix differed somewhat from what our initial expectations were entering the quarter. The Broadcast business came in relatively flat, and our Broad-based and Access products experienced larger macro-related declines. Given the mix shift, gross margins was down 60 basis points to 61.5%. We expect that margins remain in this range in Q4. Anticipating an uncertain demand environment, we again exhibited very good restraint in controlling operating expenses. On a sequential basis, we reduced spending approximately 5% through lower variable compensation and further reductions in discretionary spending. R&D decreased to $28.1 million, and SG&A declined to $22.4 million. SG&A expenses at its lowest level since the first quarter of 2010. Operating income improved versus our initial expectations given the expense restraint I just described and was 19% of revenue. Other income was $300,000, and our non-GAAP tax rate was 16.8%. Therefore, net income was $19.1 million or 16% of revenue. Resulting Q3 diluted earnings per share was $0.44, well above our guidance. Some of the impressive earnings result was also attributable to our aggressive buyback activity. Spending $86 million in Q3, we repurchased 2.5 million shares. We ended Q3 with a diluted weighted average share count of 43.9 million, down sequentially by 2 million, reducing the float by 4.4%. Share count is expected to decline further this quarter as a result of Q3 substantial repurchases. Since the repurchase program's inception in 2006, we have now spent more than $750 million, totaling 22.4 million shares, and reducing our float by 35%. On the balance sheet, accounts receivable decreased to $58.4 million or 44 days sales outstanding. We continue to have no known collection or bad debt problems. Inventory was particularly well managed given the revenue decline and the simultaneous need to build inventory for new product rims. We ended the quarter essentially flat at $38.4 million or 4.8 turns. Channel inventory in the quarter declined by about 11%, ending the quarter at 41 days. Once again, we generated strong operating cash flow, which partially offset the share repurchase expenditure previously discussed resulting in cash and investment equivalents of $301 million at the end of Q3, of which a little under 60% is offshore. And finally, our Board of Directors has approved a new authorization for $50 million that will run through April of 2012. Necip?

Thanks, Paul. It's clear now that the early signs we had in July of weakening end markets were not unique to Silicon Labs. While we recognized the slowdown early, our visibility was limited and we did see the revenue composition change over the course of the quarter, as Paul mentioned. Broadcast performed better than we expected, led by solid Audio demand and a less steep decline in Video. Our FM tuner business had a better seasonal lift than we'd anticipated. Audio products, in general, continue to generate strong design win activity, particularly on the heels of near-to-launch products. For example, in the quarter, we introduced another new family of AM/FM receivers, targeting a new segment that is not well served by integrated solutions today. In Video, both TV tuner and demodulator shipments declined as TV makers locked out inventory. We believe this inventory correction is largely addressed and expect the Video business to be up modestly sequentially in Q4. From a competitive standpoint, I feel very good about our position going into 2012. The degree of penetration we are seeing at tier 1 TV makers is meaningful and could represent significant upside when TV sell-through improves. We're also expanding our portfolio in the TV market and have what we believe is the broader set of offerings for iDTVs globally. During the quarter, we introduced a silicon tuner family specifically targeted at tier 2 TV makers in high-volume emerging markets. This represents an untapped segment where silicon tuner penetration is virtually 0. In Q3, we also introduced our latest generation hybrid silicon tuner and the industry's first receiver combining both the hybrid silicon tuner and a demodulator in one device. We now provide TV makers with a full range of options from analog or digital-only tuners, to full-featured and fully integrated…

Thank you, Necip. We will now open the call for the question-and-answer session. [Operator Instructions] Operator, please review the question-and-answer instructions for our call participants.

[Operator Instructions] Your first question comes from Anil Doradla. Anil K. Doradla - William Blair & Company L.L.C., Research Division: Your guidance of a negative 3% to 3% sequential clearly is better than the overall semiconductor industry. I think the question I have is what degree of confidence do you have in this guidance, and can you just give us a sense of what level of conservativeness you baked in? I mean what would it take for you to perhaps be on the lower end or be worse than your guidance, and just kind of quantify a little bit of that. And on your handset design win with Samsung, how should we be looking at that? I mean, do you think you're going to be sharing this platform with 3, 4 vendors or do you expect to be taking the vast majority of share over the next 12 to 24 months?

Anil, let me start by providing a few data points on what we're seeing with respect to order patterns to give you some comfort about our guidance. The backlog so far, quarter-to-date, for the whole company is slightly ahead of where we were in the third quarter, same time. If you look at our Broad-based businesses, and I'll exclude touch controllers from this for the time being to give you a better view of the overall demand environment, the backlog for that product group is also ahead slightly of where we were same time last quarter. Our book-to-bill ratio has steadily improved and is now hovering around 1 for the last several weeks. We've seen some improvement in revenues throughout third quarter, particularly in our Broadcast and Broad-based businesses, and that seems to be holding into early fourth quarter. And finally, we're not seeing any unusual activity in terms of push out requests or cancellations. So if you were to look at our order patterns exclusively, you might be tempted to guide the quarter up, but we tried to inject some conservatism into the guidance given all the macro concern, the tempered views that we're hearing from our peers, and I think ended up with a good balance between the conservatism and what we're seeing in our order patterns today. The second question you've had was with respect to the Samsung platform. That platform is ours, and we're not going to be sharing that particular platform with anyone else.

Next question comes from Craig Ellis. Craig A. Ellis - Caris & Company, Inc., Research Division: Craig Ellis here. Paul, just first question for you on the OpEx side, 6% better than my model and actually sequentially can you help us understand what the factors are that caused OpEx to go down, is it just proactive management across the board or was there anything of a one-time nature accrual reversals, et cetera?

Craig, there really was nothing there of a one-time nature. OpEx is really our best lever for managing our profitability and as we -- as I talked about earlier, but the biggest drivers for us were really to manage or reduce our discretionary spending across a number of areas. And there was a lower -- with the lower results, there were certainly lower variable compensation as part of that. Craig A. Ellis - Caris & Company, Inc., Research Division: Okay. And then on the product gross margin side, Necip, with the TV tuner, I think earlier in the year, you talked about a lower cost or cost down version of the product coming out and is that on track, and what's your view for TV tuner product gross margins as we head into 2012? And on the capacity that's part, a very nice design win there from a gross margin standpoint, how should we think about the gross margin dynamics there relative to the corporate average as we pulled in the ramp of that product for 2012?

Okay. I'll take the video question first. The new-generation product, it started ramping in the third quarter. We talked about a media refresh program that we won with one of our customers, and that particular win was with our latest-generation tuner. So that is -- been ramping for the last couple of months. A large majority of the wins that we have in place for 2012 are with that new-generation device. So I expect most of our shipments to be in that flavor. And while I hesitate to talk about pricing at this juncture and in particular for competitive reasons, we continue to expect the product margin of that device to be better than the prior generation. On the HI front, I think we're going to refrain from providing gross margins per product line as we usually do. But I'll make the comment that the part margin or the gross margin for that product line doesn't represent an extreme. We've talked about Video and Timing product in the past as extremes to have a gross margin spread. There's nothing particular about HI to point out in that regard. Craig A. Ellis - Caris & Company, Inc., Research Division: And then just on the Timing side, given the strength you're seeing there, is this part of that -- some of the success you're seeing with respect to when your -- what's the accounting for the acceleration in activity and design wins there?

When we provided guidance in July, we were cautious about Timing because we didn't want to rely on a strong month of September. And this is indeed what we got from our customers, an acceleration of orders. So this can certainly continue into our fourth quarter, but this is not what we're baking into our forecast today.

Your next question comes from Steven Eliscu.

First question is with regards to thinking about growth in both the Broad-based business and TV tuner business. Given in the TV tuner business, you're going to hit your $60 million, how are you thinking about that business now shaping up for 2012? And in terms of Broad-based for your 20% to 30% growth target, how are you thinking about what end of that range you might end up for Broad-based in 2012?

Let me start with Video. I think with the guidance we are providing, we'll hit slightly surpass the $60 million target we've established, and that's in the presence of a non-friendly demand environment for 2011. Going into 2012, we feel very good about our penetration with the top OEMs. To give you an idea of our market share, we believe we are going to be around 20% market share in 2011. And based on traction so far, we expect 2012 share to be over 30%. And so we're making clearer progress with top OEMs and feel good about the competitive positioning in terms of product offering versus our competitors. On the Broad-based side of things, I think given the macro environment, we are going to fall short of our target for the year. I think Broad-based business will likely grow in the mid to high-teens year-on-year in 2011. That is what our guidance reflects. I think we are going to hit a major milestone for the year, however, hitting $200 million for that product group. And I think this is a solid accomplishment given what we're seeing in macro and what you're hearing from almost all our peers.

Okay. And just a follow-up question. In terms of the end markets, industrial, communications and consumer for your Broad-based products, how are you seeing -- you have limited visibility, how are you seeing trends in those end markets?

I can give you a little bit of perspective related to the past 90 days. Our expectations on the consumer side of things were muted and we got a little better demand than that, in general, across all of our products. But we have seen weakness, especially as the quarter progress, coming particularly from the smaller customers that we typically serve through the distribution channel. The end markets for those customers are largely varied and I don't have a good quantitative data point to provide you with. Many of them are in industrial end markets, although not all. So I think the weakness that we've seen and many other companies are reporting are relatively Broad-based and are not singular to any one end market.

Your next question comes from Tore Svanberg. Erik Rasmussen - Stifel, Nicolaus & Co., Inc., Research Division: This is Erik, in for Tore. I just wanted to ask on the OpEx line, Paul, maybe, R&D obviously came in, and you talked about some of that, Paul, reduction in OpEx or maintaining that OpEx line, but given that you guys talk a lot about new product wins and new designs and big portion of your revenues coming from newer products, do you think your R&D is going to be a little bit light to support a lot of that design activity? Maybe if you could just kind of talk a little bit about that.

Well I would say -- how I would characterize it for, say, the coming quarter for instances that the guidance that we provided of an increase in OpEx in Q4 will be largely reflected in R&D as we have an increased level of tape-out activities. So one of the things we don't do as a company is we don't -- when we do manage our OpEx, we don't necessarily push out tape-outs, and we don't show the design activity. And I think what you see in Q4 is or on our Q4 guidance is evidence of that philosophy. Erik Rasmussen - Stifel, Nicolaus & Co., Inc., Research Division: And you talked a little bit about optical communications. We have seen and hear a lot of broad disruptions for a global optical communication supply chain. Are you -- what are you hearing from your customers and if can you maybe frame that and maybe talk about the flooding if you have any sort of impact that you're seeing in your business?

From the recent flooding in Thailand at this juncture, we don't anticipate any material impact on our operations. Maybe some secondary impact to our business with respect to shortages in other critical components for the equipment we sell our products into, but there's little to no impact to our operations directly from that disaster.

Your next question comes from Blayne Curtis.

On the guidance, you seemed to indicate that Video and touch were up I was just wondering can you give us some color on the other moving pieces, if you expect any other segments up and then what factors gets you to the high end and low end of the range?

So let me start with the Broad-based. When I talk about this area being up, it is primarily being driven by the touch controller revenue, but as I indicated in response to Anil's question, the rest of the product areas have solid backlog at least 3 weeks into the quarter as well. So if that trend continues, we might get a little upside from that. Another area we are seeing, some very recent activity in is in palm deployment in China. I've alluded to some recent design wins with our SLIC products, and we are seeing some modest upside request coming in that we're going to try to serve in the quarters. So this might provide a little bit of lift as well in our Access business. I think those, combined, will get us to the higher end of our guidance. Brendan Oliver Furlong - Miller Tabak + Co., LLC, Research Division: And then on gross margin, I'll circle back to a prior question. Obviously, the mix was a big factor in the gross margin being a little bit light in the September quarter, can you talk about whether you saw progress in the margin in Video? And then as you look out to Q4, it seems like the mix would be shifting more to Broad-based, but are you seeing -- would you expect the video margin to continue to progress and then kind of just what are the puts and takes to get to that flat margin with the mix changing a little bit more toward Broad-based?

I think at this point, the margin impact that we talked about in the beginning of the year, the startup costs are all behind us. All that costs reductions that were planned were achieved on time. And the ramp of the new-generation devices are going smoothly so far. So at this juncture, what dominates the gross margin percentage is the product mix between various product areas and even within a product areas, mix of products we sell as well as the absolute revenue level. So I don't think that there's much to dwell on going forward on the tuner margins alone.

Your next question comes from Srini Pajjuri. Srini Pajjuri - Credit Agricole Securities (USA) Inc., Research Division: Necip, on the microcontroller business, you said that you saw some weakness at smaller customers in the past couple of quarters, just wondering if the stabilization or rebound that you're seeing into Q4 is primarily coming from smaller customers or if this is from any new products?

Well, it's a little bit too early for me to be able to answer that question definitively. We are seeing certain destabilization and order patterns coming across the board, but it's a little bit too early in the quarter to delineate that between the smaller customer base and the rest. I'd like to think that some of this can be linked to the strong design win activity that we've been reporting for the last 3 to 4 quarters. But this is also rather difficult to be able to delineate that with all the changes going on and the overall environment all the volatility. So I might be able to have a better answer for you by the end of the year. Srini Pajjuri - Credit Agricole Securities (USA) Inc., Research Division: Okay. Great. And then on the TV tuner side, you said you expect to gain some market share as we head into 2012. I'm just wondering where in the penetration cycle of silicon tuners are we. And also you talked about the opportunities in our tier 2 TV market. I'm just wondering how big that market opportunity is going forward.

We stand by the projection we had of silicon tuners representing 50% of the market in 2012. We're going to account for something north of 30%, as I mentioned. Sony continues to use their internal practice solution so that represents a chunk. And I think there will be -- that the rest will be other silicon tuner providers getting some share. I think we're going to continue to enjoy the lion's share of the silicon tuner market for the foreseeable future, however. Srini Pajjuri - Credit Agricole Securities (USA) Inc., Research Division: Great. And then finally, I just want a clarification, Necip. You saw a little bit of strength on the FM tuner side, and if you look at the Broadcast business and also Access business, how much of that business do you still consider legacy and how do you see the trending going forward?

I think the data point we've provided in the past was the aggregation of FM tuners into handsets plus modems into CPE applications. That was about 12% and remained about the same, roughly the same in the third quarter. And overtime, that will continue to decline. I think, of these 2 pieces, I would expect handset to decline faster compared to CPE modems. I think the overall declines in modems will occur but at a more measured pace.

Your next question comes from Craig Berger. Craig Berger - FBR Capital Markets & Co., Research Division: I just wanted to ask first on the touch products. What's sort of a gross margin profile for that business and what kind of content are you seeing into a cellphone today, and also how many more programs or platforms might you be engaged on?

Yes, I tried to answer Craig's question, other Craig's question in that regards too earlier. We're not going to be able to provide a gross margin per product line, but we said it doesn't belong to any of the extremes so it's not going to be a major contributor one way or the other to our gross margin profile. And we feel good about this platform win at Samsung. I think it establishes our capability and product performance value. We certainly intend to proliferate that inside Samsung as well as with other leading smartphone providers. But at this point, what we can definitely point to is this Galaxy Y platform that we started ramping in Europe. And there are a number of handsets on that platform that we have won. Srini Pajjuri - Credit Agricole Securities (USA) Inc., Research Division: Can you just help us with the dollar content per phone and maybe how that compares with market leaders selling at $250 a chip and can I just have a brief follow-up?

No, I'm not going to be able to provide any AFP. I don't think it's in interest of our business competitive to do so. Craig Berger - FBR Capital Markets & Co., Research Division: And then just a follow-up is gross margins now in the 61s, how do we think about that as we move into 2012? Is that sort of the new baseline here as Video becomes a bigger mix of the business?

Craig, this is Paul. How I would characterize our gross margin picture from a long-term basis is that no, this is not a structural change. We're a few basis points below the minimum where our range is and we have a lot of confidence. And we continue to work hard to get back into that range and we expect to do that.

Our next question comes from Sandy Harrison.

Necip, could you talk a little bit and remind us on your TV plan. I mean, clearly going from 20% market share to 30% is a nice move up. But how was it -- you've talk in the past about the model year, and so forth. So if you could just remind us in how your 2012 rolls out and how we could think about in a modeling perspective from this product and growth into the longer-term revenue plan?

I think they're missing out -- and what you're asking for is a price, which I won't be able to provide. But we will try to give all of you an idea for 2012 for various pieces of the business in January, as we typically do, I just wanted to provide this data point in terms of market share gains at this juncture because a large majority of the programs that were up for design wins have been decided upon at this juncture. So we have a pretty good visibility into our footprint for 2012. And of course, what also remains to be a question mark is the volumes and the sell-through. Customers are now starting to place orders for a product that will go into 2012 models. So we're going to start shipping some product towards the tail end of this year to our customers for their new year built. I hope it helps.

Sure. And then coming out, another question in the PON market, you talked about seeing some business in China for that with your SLIC product. Is that coming from market share gains, is this based upon refresh of platforms from some of those or is a competitor and a competitor falling down just trying to understand where this drops in at a time when a lot of other people are talking about some softness in China and perhaps this is some market share on your part.

I think there's some renewed emphasis in China from the government in terms of PON deployment. So I think there is an increased opportunity for everyone, and we have been able to win some key sockets away from the competitors. So I think it's a combination of both.

Got you. And then another question on Taiwan, you said that a lot of your set-top box business or a lot of your modems, I know there's some set-top box business that's relatively small piece I guess close to 6% plus or minus, do you guys have many set-top boxes where you have hard drives in them or not? What's sort of the mix of that set-top box business for you guys?

Yes. I know why you're asking the question because of potential shortages in HDDs. I don't have a good figure off the top of my head to tell you how much -- what percentage of those satellite set-top boxes we're selling to our PVRs. We have not yet completed the analysis on whether any potential HDD shortage would impact our Access business. But you've quantified it yourself, it's 6% of our revenues. A portion of that might come from PVRs and there might be a portion of that, that's inside the quarter may have component shortages difficulties. So we've, I think, incorporated this qualitatively into our guidance in providing a down guidance on Access. That certainly influenced our thinking. But we don't have a quantitative analysis completed at this point.

Our next question comes from Vernon Essi. Vernon P. Essi - Needham & Company, LLC, Research Division: I don't know if you got in to the question along the lines of guidance but I wanted to just revisit the channel inventory you had I guess a 12-day reduction in the current quarter it's some query you wrapped up, do you have any thoughts as to whether you expect that level to increase or be flat going into December as you close out?

Vernon, I would -- when I'd think of our channel inventory or our own inventory, I like to think of them together as really the supply picture that we control. And well how I would characterize that supply picture, those 2 elements combined is that we'll still stay relatively flat in Q4. Vernon P. Essi - Needham & Company, LLC, Research Division: Okay. And then just a, I guess, sort of a backwards-looking question here on the Audio side, you saw obviously strength there, wondering -- there could be a lot of things that probably happen but anything that stands out, either pure gains, third-world adoption or even was there a better-than-expected sort of consumer possibly, better-than-expected consumer selling season on the third quarter, just if you could elaborate. I'd appreciate it.

I think back in July, we had a pretty mediocre view of demand. And the upside was driven by a handful of large customers in the quarter spread across in a multiple application ranging from handsets to portable media players to CE.

Our next question comes from Sujeeva De Silva.

Give us an update on...

Sorry Sujeeva, you cut out.

I'm sorry, the television channel inventory and in the past you've given us that number, can you give us an update on where that is today?

Well, I think that excess inventory of roughly 4 weeks by our counting has now been dealt with. We can tell this not only by what our customers are telling us, but also through the order patterns that we see coming from large customers on our new-generation tuners. And they are clearly working the inventory off for the current model year and starting the production later in the year for their 2012 models. Having said that, we still don't know how the holiday period will go, what the sell-through of TVs worldwide will look like. And so that remains a question mark, but as far as the inventory that referred to 3 months ago, I think that's been dealt with.

Okay. And then just another question on gross margin here. The -- it sounds like into 2012, you're perhaps talking most about the Video products and touch. And I imagine those are on the lower side of the gross margin relatively. I'm wondering whether those improved to help you get back in your range or whether your -- there's things on the higher gross margin end that you're excited about into 2012 as well and if you could highlight a few of those to offset the touch and Videos, that will be helpful.

When I talked about the growth drivers in '12 over the last couple of quarters, I highlighted a few things, 2 of them we touched on with Video and HI. But the one you didn't mention is the rest of the Broad-based business. I think we'll continue to see nice growth in that business in 2012 even in a subpar demand environment. In 2011, that collection of businesses is growing in the north of 15%, and there's no reason whatsoever why we can't do that in the future. So -- and that collection of products certainly have accretive gross margins.

And last question on touch. It felt good when you heard Samsung, can you talk about the competitive factors that helped you win that and maybe if your product's targeting certain handset market segments or whether it's broadly targeting the cellphone market.

We are broadly targeting the market. We have more in the R&D pipeline as well. I think we're trying to differentiate in the classical Silicon Labs way, we're offering competitive or better performance than what's commercially available at attractive cost points. And that applied squarely on the touch controller, as well and that's what Samsung saw in our offering.

Your final question comes from Cody Acree.

Over the last couple of days, when we had TI [ph] and I asked Michael to make some comments about recent weeks of just over the last recent weeks of improving activity and it sounds, Necip, like you're seeing similar trends but you have a little differential in some product cycle standouts. Maybe can you characterize the difference between what you're seeing from a product cycle improvement driver and maybe on a broader basis, just seeing some improving order trends?

Yes. So I try to delineate that earlier by saying if I remove the HI from the picture looking at Broad-based businesses, the backlog so far in the quarter is slightly ahead of where we were starting third quarter. So that's certainly encouraging. And you're right in pointing out that we have some differentials in the product cycles, notably the touch controller and the TV tuner. But the rest of the business, it appears at this juncture in a way to at least hold compared to the third quarter. The guidance range we've provided attempts to inject some conservatism based on all the tempered views we're hearing from our peers and customers.

And I guess maybe on that -- we're talking about the drawdown of inventories in the channel, obviously, OEMs were doing the same thing. Some have made comments of OEMs previously drawing down to some unsustainable levels and now maybe you're starting to see some order rates improving to get back to matching and consumption. I guess some of this recent improvements, do you feel like some of it is kind of just getting back to normal run rates in demand or do you think it's really an in demand issue that's improving?

Well this 2 are related, Cody, and it's not entirely clear to us if the weakness we've seen or the industry is seeing as due to customers simply trimming inventories or them adjusting their orders with our suppliers reflect the new demand environment they see with their customers. The inventory levels were not particularly high going into the third quarter. They were, obviously, in some cases, trended below what you might call normal levels. But I think customers continue to be rather cautious about their customer demand. So we are not anticipating in the near future them wanting to raise their inventory level.

And then lastly, on the OpEx side, the color in the Q4 is helpful but as we look into 2012, if we assume that the markets are not improving dramatically I guess what's that next set of levers or opportunities to continue to be conservative on the OpEx side or even reduce that if that need be?

Well I think we've demonstrated in the past our ability to manage discretionary spending in all environments. So I think if, depending on how the environment plays or how the macro environment plays out in 2012, I'm confident that we can continue to be prudent in terms of our discretionary spending while not sacrificing our opportunities for growth.

All right. Thank you, all, for joining us this morning. This now concludes today's call.

This concludes today's conference. You may now disconnect.