Welcome to the quarter two 2008 earnings conference call. (Operator Instructions) Tom Newman you may begin your conference.

Welcome to our discussion of Teradyne’s most recent financial results. I’m joined this morning by our Chief Executive Office, Mike Bradley and our Chief Financial Officer, Greg Beecher. Following our opening remarks we’ll provide you with details of our performance for the second quarter of 2008 as well as our outlook for the third quarter. First however I’d like to address some administrative issues. The press release containing our most recent financial results was sent out by a business wire yesterday evening. Copies are available on our website or by calling Teradyne’s Corporate Relations office at 978-370-2221. This call is being simultaneously webcast over our website at www.Teradyne.com. Note that during this call we are providing some slides on our website that will be summarized and that reinforce some of the highlights. They may be helpful to you in following the discussion. To view them simply access the Investor portion of our site and click on live webcast followed by click here for webcast. In addition replays of this call will be available starting around noon today Eastern time. The phone replay number in the US and Canada is 800-642-1687. Outside the US and Canada the number is 706-645-9291. The passcode for both numbers is 12340. A web replay is also will also be available. You’ll find it by going to www.teradyne.com and clicking on Investors. The replays will be available along with the slides through August 7. The matters that we discuss today may include forward-looking statements about events or the future financial performance of the company. Such statements involve risks and uncertainties. Actual results can differ materially from such forward-looking statements. Some of those risks and certainties are detailed in our press release and our filings with the SEC. Additionally those forward-looking statements including guidance are made as…

Let me give you the conclusions first then I’d like to expand a bit on what’s contained in our Q2 results and in our projections for this next quarter plus I’d like to also give you an update on our longer term strategy. First of all we’re making steady bottom line progress as reflected in our second quarter results and third quarter guidance. Second we’re on plan with our new product rollouts in our SOC test business after a very good first half. Third our memory test business is making good headway with its new product rollouts as well but is not seeing any significant amount of capacity buy. Finally we’re on pace to meet our end of the year break even target of $250 million or less. We’re not immune to the headwinds in the general economy but our ties to many of our customers’ new product programs and continued docket wins have driven our progress this year. Greg will go through the financials shortly but you can see that from the fourth quarter of last year to this coming quarter our steady work on the cost and productivity side of the equation continues to have an impact on the bottom line. Now let me spend a few minutes on our SOC new product progress this year as that’s the centerpiece of our 2008 plan. If you remember we’ve got five new products where we’re shooting to get $150 million to $200 million in business this year. As planned we about doubled our new product orders in this last quarter so we’re more than halfway to that goal. The big story in this area for us is wireless. We just completed the strongest six month order period for wireless configurations in our history, demand for our 12-gigahertz ultra-wave subsystem…

I plan on covering three main subjects in our call today. First, is an update of our progress in achieving model profitability by year end at this cycle revenue? Next provide some color on our second quarter results and lastly I’ll provide some details for my third quarter guidance. So how are we doing in achieving 15% model profitability by year end at this cycle revenue? The short answer is that we’re on plan. We remain on track in lowering our quarterly operating break even level as well as achieving our new product rollout goals. As Mike has already covered the new product momentum I’ll focus my comments on the cost side of the ledger. As you will recall we described that we would get our quarterly operating break even level to $250 million or lower by the end of 2008. This would fully offset the $20 million a quarter break even increase from the addition of next test and would amount to just over 3 percentage points at the operating income line. So where do we stand against this commitment? At the halfway point in 2008 we have about two-thirds of this $20 million reduction behind us and are on plan to get the full amount by year end. The final one-third improvement will show up in engineering and in gross margins. In engineering the savings will come from the completion of engineering projects, higher levels of module reuse and improved development processes. Moving to gross margins I’m pleased to report that the flex outsourcing to [Chuso] China was completed during the past quarter ahead of schedule. We’re not unique in that our full flex manufacturing line from board assembly to final configuration and test is all in one low cost outsource cite which has many benefits including lower…

We’d now like to take questions.

(Operator Instructions) Your first question is from Satya Kumar – Credit Suisse First Boston. Satya Kumar – Credit Suisse First Boston: I was just wondering if you could give us your assumptions; once again remind us of the product mix for that type of revenues?

The product mix would generally be 80% semi-test and 20% STG. Satya Kumar – Credit Suisse First Boston: What growth levels are you able to get this 15% operating margins? What is the cycle?

It’s $340 million, $345 million. Satya Kumar – Credit Suisse First Boston: As you ramp these new products in SOC how would that impact the gross margins in the back half of the year?

Part of our path to get to model includes improving gross margins and the improving the gross margins comes from both the new products, they will improve our gross margins as well as the continuation of the outsourcing which has been completed and the benefits of the outsourcing now will start to be realized in full force in the second half of the year. Satya Kumar – Credit Suisse First Boston: So the new products are basically not in line with the gross margins or better, right? [Inaudible] gross margins?

They’re generally better. Satya Kumar – Credit Suisse First Boston: Final question for me, I’m curious about this hard ware opportunity that you talked about. Can you talk about the market in general and opportunity for this versus the LCD test initiative and who are your competitors in the hardware test market right now? Where do you seem to have value versus the competition?

You said in comparison to? Satya Kumar – Credit Suisse First Boston: LCD markets, LCD test markets.

The LCD driver market. Let’s see, I think there’s some significant similarities in the cost drive in both markets and the need for high parallelism. That’s an obvious similarity between the two. At the moment the LCD driver test market has over capacity so it is not driving any capacity buying, it is only driving qualification work. The hard disk drive market which I’ll just touch on very briefly because we don’t want to get into what we’re doing there with regard to product but the growth in that market for this next generation of smaller hard disk drives is significant over the next few years, on the order of 40% compound annual growth and we think that drives a market of a few hundred million dollars a year in total available market and the capability that we’re going to develop will call upon some of the capabilities and enabling technology that we have in other businesses. Major competitor in that market, commercial supplier, is [Iratex].

Your next question is from Timothy Arcuri – Citigroup. Timothy Arcuri – Citigroup: Couple things, how much of the $150 million to $200 million that you’re saying for new product revenues this year, how much of that cannibalizes current revenue?

Let’s see, Tim. Let me see if I can get it because obviously a chunk of that is a conversion. What we’re shooting for is to get about a third of that in for new customers so that would be share gains of $50 million to let’s say $65 million is the target. The rest of it complements our overall product portfolio. To put the math all together, the hope is when we do all of that, that we would get a point to two points of share in the SOC core this year.

On the two-thirds we would expect to get more attractive gross margins because we’re putting in new technology in place of some technology that is less competitive. Timothy Arcuri – Citigroup: So the right way to think about that is really that you’re only adding about $50 million to maybe a little more million dollars in flat out new revenue this year?

That’s the way to think about it on the new product side. At the same time, the existing products also have a role and a have a job to do of expanding socket-by-socket. So we expect a bit more from that. The short end on this is if you’re trying to gain net gain one point of share we think you have to get a gross gain of a point and a half because we don’t win every contest. We don’t go undefeated. So we’ve got to win more than the net share that we gain each year. Timothy Arcuri – Citigroup: I had a couple more, so what do you think that that number, let’s say it’s $50 million this year, what do you think that number is just sheer new revenue next year? Is it double that, maybe $100 million?

We haven’t done that yet, don’t know. Timothy Arcuri – Citigroup: Next thing, can you give me some breakout in terms of the OpEx by semi versus non-semi- because I guess I’ve looked at the semi- OpEx and I’ve talked to Tom about this before but if you look at the semi- OpEx it just looks like in the semi- business you’re spending a lot more money than peers are so I’m just wondering if you could break that out for me?

In the second quarter in semi-test we spent $47 million, this is with next test too, and this is all semi-test, $47 million in R&D and $55 million SG&A. Timothy Arcuri – Citigroup: Maybe just two more quick things, can you break the $264 million in semi-test revenue? Can you break out how much of that was memory?

The memory in the second quarter was $14 million. Timothy Arcuri – Citigroup: What’s embedded in your September guidance for memory?

Likely flat to down a little. Timothy Arcuri – Citigroup: Last thing, maybe my memory is not correct on this, but isn’t there a lawsuit right now that’s pending relative to your HDTV, your entry into the HDTV market?

Tim, I can’t comment on any legal activities around it. What is out there you can get access to but we can’t make any other comments. Timothy Arcuri – Citigroup: Right, but you can comment factually, there is in fact, you are named in a lawsuit relative to that new product, correct?

On that front, yes.

Yes, that is true and we’re going forward with the product.

Your next question is from CJ Muse – Lehman Brothers, Inc. CJ Muse – Lehman Brothers, Inc.: If I could take you back on that last question, could you tell us what your core SOC revenues were as well as what LCD driver revenues were in the quarter?

We can give you the SOC revenues in total. As we said last quarter we’re not breaking out the five product revenue pieces at this point but do report to you on how we’re doing in the overall package of those products. On that front I don’t know if I said it, we’re about halfway to the objective that we’ve got this year in the $150 million to $200 million so we feel pretty good about the momentum on that front so far. CJ Muse – Lehman Brothers, Inc.: On the LCD driver part of things we talked about excess capacity there, have you revenued tools yet?

There is no revenue yet on that product. CJ Muse – Lehman Brothers, Inc.: Thinking about overall guide for September at the midpoint, running my numbers I think that suggests roughly SOC down $20 million if you assume that your service holds relatively flat, where are you seeing the softness there?

The softness going forward? CJ Muse – Lehman Brothers, Inc.: Yes, exactly.

It’s a number of places, it’s not one place. We expect that things will trend down; we’ve had a record demand in wireless. We think that comes down a little bit in the third quarter. Base span was very strong so those are the two places where we are seeing signals from customers that they’re in a digestion mode. Memory is down a little bit because the capacity buying is really off. I think the overall memory market quarterly run rate now is 50% or less than it’s normal rate. But there’s a pretty broad set of places where the short term demand I’m talking about, in other words the visibility we have over the next month or so appears to us to be off. So as I said we pulled our horns in ship level across the board in those products. At the same time we’ve got many of the new products are all ramping through this period? CJ Muse – Lehman Brothers, Inc.: In terms of your incremental revenues from new products, on the last quarter call you talked about $50 million to $70 million, this call $50 million to $65 million. Are you changing your thoughts there or is that just $5 million is not a big deal there?

No changing the thoughts. CJ Muse – Lehman Brothers, Inc.: Last question here, can you give us an update on the move to wafer tests with our Magnum tool set?

We introduced the Magnum II higher frequency more capability for the next generation of NAN parts and the multi-chip packages. On the wafer front as we talked last quarter we have a very small position on wafer test with Magnum I and with Magnum II and that’s under 10% of our total business. That’s an available market to us that hasn’t really been developed yet. This quarter we expanded our customer base with two new customers in Taiwan for wafer probe so we’re expecting that that rate of penetration into the probe market will expand for us. We’re hoping to get that to about double that level in 2009, north of 20%.

Your next question is from Brett Hodess – Merrill Lynch. Brett Hodess – Merrill Lynch: You talked about the resurgence in the OSAT group in the second quarter, the high sequential growth rate, when we look into the second half and the caution and some of the weakness that you talked about, does that flow back from the OSAT group or is it mainly in the IBM? Depending on the mix of those two how much impact does that have on your margins?

Definitely the OSAT numbers here have grown dramatically. We’re at a eight quarter high in our OSAT demand so they’re into a very, very high digestion phase right now. So we think that has to come down a little bit. We don’t have it broken out in terms of what the expectation around this quarter’s demand will be but a 55%, 45% split with OSATs at 55% is high. So we think that’s definitely a piece of the pullback. Brett Hodess – Merrill Lynch: Does that help or hurt margins as that piece pulls back?

I think it’s neutral to margins, I think the margins would not be expected to vary in any significant way based upon the customer. It’s more dependent upon the application versus the end customer.

The next question is from Bill Ong – American Technology Research. Bill Ong – American Technology Research: We’ve been seeing in pricing in raw materials and component costs. I just want to see if that has impacted your cost of goods and if so, have you been able to pass the cost on to your customers?

The impact to date has been small. We have ongoing discussions with our suppliers where we’re obviously trying to get them to lower their cost, they’re trying to pass on items you mention as well as currency if there some client from overseas. But net-net we expect to hit our material costs down target goals this year so the impact of what you’ve heard about has not been significant to Teradyne as of yet.

Bill we typically don’t have a cost pass-through. We just work against value of the product and try to drive the pricing off that.

Your next question is from Jim Covello – Goldman Sachs. Jim Covello – Goldman Sachs: Couple quick things, as it relates to the memory business I think ScanDisk was about 40% of next test business and obviously they reported some weak results and talked about cutting back on their capacity growth. Should we use them as a leading indicator for what we could expect for that business? When they start to see better trends that ought to map pretty closely given that they’re already cutting back?

I think that would be fair. The capacity buying as I said is off, that’s a piece of it. That wouldn’t be a bad element. Our overall memory business hasn’t gone down the level that the overall market has so that means that it’s new product driven, new applications driven for us. Having said that we don’t have a large market share in that segment so we’re able to buck the tide a little bit there. Jim Covello – Goldman Sachs: Moving over the SSG and the competitive environment there, how are you feeling about a share? In particular, one of your big competitors is highlighting two pretty significant order wins and shipments. Were those situations that you are involved in bidding on or is that not something that you were interested in?

Let me talk in general about the competitive landscape versus specific sales situations. So far through this year we think we’re continuing on a trajectory here of share gains and we get those, they’re not all marquee one shot deals where you get one thing and say that’s accounting for the lion’s share of the share movement. We have so many markets that we’re in, we get them in smaller pieces. We have had some important platform wins in the first half, one of those in the automotive space which I think you’re aware of, another win in the ASIC space. Neither of those has yielded significant revenue to date so they are really in our future. But as you look through the first half of the year we think the market’s about $1.3 billion so far through the first half and we think we’ve gained some position on that. Having said that, market share numbers don’t solidify until you get a little bit past the end of the year. If you count noses the net effect of our design ends, wins and losses puts us slightly ahead of the game for this year and our target as I said before is to gain one to two points net which is what we’ve done the last three years.

Your next question is from Gary Hsueh – Oppenheimer & Co., Inc. Gary Hsueh – Oppenheimer & Co., Inc.: Some things don’t quite square with me. Mike, you basically talked about LCD drive IT tests and the flat panel display business being in over supply and it sounded like you’re hinting that could potentially dampen your view on volume buys for your LCD driver IT test products. If that product is part of the $150 million to $200 million new product revenue stream that you still expect this year, shouldn’t that number be cut down maybe by $20 million or $30 million so really it’s $120 million to $170 million now?

The answer is that of the five new products, some are ahead of pace, some are behind in pace. In particular the wireless new product is ahead of that pace. We were hoping that that would give us 20% or 25% of that growth, it’s closer to 35% to 40%. So some of the new products are lagging because of market conditions, others have accelerated dramatically. Just to give you a bit of a feel for that we’ll ship about 50 ultra-wave products this quarter. On top of that we’ll ship about a third additional units for internal use. So the ultra-wave is well ahead of plan and that’s more than made up for the softness in the LCD space. Gary Hsueh – Oppenheimer & Co., Inc.: My second point is just on the inorganic part of that $150 million to $200 million, with the LCD driver IT diminishing in terms of prospects for volume buys, is most of that $150 million to $200 million now, most of it seems to me is organic contribution, either a replacement cycle or share gain. Is that a right characterization?

Yes, it’s all of that set of products that we’re talking about is inside SOC and you’re right, you could carve out LCD as a place we haven’t played in the past. So all of the other portfolio of products, for example the new image sensor product, micro-controller product or the high density version of the ultra-flex, all of those build on and fan out from an existing position that we have. Gary Hsueh – Oppenheimer & Co., Inc.: If I look over the last five years just doing fill in math and averaging the sequential growth rate in Q4 over the last five years, I get something like 12% decline quarter-for-quarter in Q4 at the top line, anything different this year or this cycle that would make that seasonal down 10% to 15% for Q4 out of the norm this year?

If you are looking out and modeling it that way and I see why you do it, I think that we would have no argument with the fact that the seasonality in this, I think that there’s this very, very intense utilization push on by our customers and if you look at our utilization numbers, we’re actually up in utilization for the last two quarters. As I said before we’ve been pretty steady but the curve goes up in the March quarter and the June quarter for us and to what that’s reflective as we look at softening in the third quarter demand, we see unrelenting pressure on the utilization side of it. So I think that might have some impact on how the trending will go in 08. Having said that I’m really not speculating about Q4 at this point because visibility is so short given lead times. Gary Hsueh – Oppenheimer & Co., Inc.: I was just wondering if anything stood out like a sore thumb this year versus any other year. Last question here for Greg, not sure I caught it, but according to my math at least on a GAAP basis gross margin came in 40 basis points above the top end of the range, revenue obviously not at the top end of the range. What drove a better margin there? Is it mix?

The gross margin improvement was largely better mix. Gary Hsueh – Oppenheimer & Co., Inc.: Mix was a bigger driver for gross margin then cost reduction?

It was cost reduction but mix was the bigger driver and what was behind mix was some of the new products. So the new products are kicking in, replacing products that have lower margins.

Your next question is from Michael Chu – JP Morgan. Michael Chu – JP Morgan: Could you provide an update on your DDR III activity? Also maybe help us get the size for the part of the market that you’re interested in in particular?

I’m maybe a little bit redundant from what we said in the past and that is all we’re going to describe at this point is that we do have ongoing R&D efforts in the high speed memory space, the DDR III and beyond space and we would build on technology that we have in our instrument space and portfolio in our SOC market as well as the history of knowledge in the memory business plus the next test input. That’s the nature of what we would have. I don’t want to get into how we’re targeting that market and what the product attributes are at this point but we do intend to build product for the 09 timeframe in that market segment. Michael Chu – JP Morgan: Could you provide us a sense of maybe the size of that market that you’re specifically addressing, the high speed portion of the industry?

We think that if you have, let’s take the last few years of market break down, let’s see it’s close to $1.5 billion in the overall memory space, that includes everything, flash, etc. We think this is about a third of that overall market or would be a third of that market when we intersect it.

Your next question is from Patrick Ho – Stifel Nicolaus & Company, Inc. Patrick Ho – Stifel Nicolaus & Company, Inc.: Just following up on that question about the high speed memory market, in terms of the revenue growth opportunities I can see the rationale for the entry into that market, can you just give your take on what the profitability levels will be like given how competitive that marketplace is about to become?

That is very, very hard to call. Greg, do you want to talk about how we might model that?

When you go into a new adjacency you do need to go with a product that has differentiation. If we go with the [ME] II product it would be brutal. We believe our product has very distinctive advantages that we are getting validated with key customers so if you accept that we have a product that is not a ME II we would expect this to look like SOC test. In the past the memory market has been highly profitable for largely one dominant supplier, the buy rate has actually been higher there too. I think what could happen over time is more competition. The buy rate could come down a little bit but I would expect the margins would like they are in SOC test.

As we get closer to that we’ll try to give you better guidance. I know you have to try to build a model here on this, that’s the best we can say at this point. Patrick Ho – Stifel Nicolaus & Company, Inc.: The gross margins for the overall company obviously held up pretty well, can you just comment on the type of platform leveraging you’re getting with the new products? How much commonality, how much of the supply sourcing are you getting and is that a big contributor to the overall margin profile going forward?

Let me just comment on the engineering side of it, one of the ways that we’re reducing our engineering have been and continue to do is through a much heavier reuse model than we’ve had in the past. We’re now at the point where we’ve got a flex product line and a 750 product line at very, very high volumes in both spaces. As you look at our product line architecture roadmap a big piece of our productivity improvements there come from the reuse of technology components, generation to generation.

Your next question is from Krish Sankar – Banc of America Securities. Krish Sankar – Banc of America Securities: I have a question on your mid-cycle assumption; you said 80% of that was coming from semi, what is your assumption for the memory dollar contribution? I remember next test used to be the high teens mid cycle revenue, are you doing the same thing or is it different this time around?

For the flash memory as we said in our last call our game plan was to get that to $100 million or $25 million a quarter run rate. Krish Sankar – Banc of America Securities: In terms of R&D are there any duplications going on in terms of R&D, i.e., like you have an excess product and you’re trying to work on a Teradyne based memory product too or are you just focused on just one product at this point?

No, there’s very little duplication. When we combine with next test the obvious thing in this space is if you have a lot of overlap you both have to squeeze the overlap out from a cost standpoint and then rationalize the products for customers. So next test had very little overlap since they were predominantly driving into the memory space. Now going forward we’re clear about where we’re headed with the memory product line and that is that next test is expanding in what I’ll call the flash or low speed applications and on the high speed end that would be a product for next year and that’s built off the flex product line. But there’s no contention there, there’s no debate. Krish Sankar – Banc of America Securities: If I look at your September guidance and look at your long term operating model would you see $45 million in 15% operating margin? It seems like at that target model you need to probably have like a $120 million in OpEx and it seems like you’re already there. So is it fair given everything that’s going forward to reach the target model is more top line driven, new products than the gross margin outside?

I’m going to say yes with one exception. On the OpEx if we were at model we’d pay out more in profit sharing and variable compensation so we need to take some more costs out of OpEx so that when we’re at model our OpEx numbers add up to about $118 million. So we will do that. All your other assumptions are accurate. Krish Sankar – Banc of America Securities: Do you have a number for the market size for HDTV testing?

For that subset segment? Krish Sankar – Banc of America Securities: Yes, or is it lumped into a bigger bucket?

It’s really into the consumer space. We think about what instrumentation we have for that space but no, don’t have the size for it.

Your next question is from Steven Pelayo – HSBC. Steven Pelayo – HSBC: Could you just quantify, you said next test the run rate goal is to get to $100 million, $14 million this quarter, flattish to down, is this year looking like more of half that rate for 2008? Is that the right way to look at that?

At the moment, if you look at the prior quarter, they were up higher than the $14 million, but they’re at $18 million last quarter on a full quarter basis so there’s no doubt that significant growth is needed in flash to get them up to that $100 million run rate but there’s a big [ham] and there’s plenty of opportunities for them to expand into probe.

I think one of the things that is mixing in that is that we’re talking in this sentence about memory and next test is combined has some SOC business so, Steve, I don’t whether we’re confusing you on that. Steven Pelayo – HSBC: Greg, just a quick question for you, I noticed your 10-Q last quarter you are doing 37% gross margins in service again. That’s a level we haven’t seen in quite a long time. Is that the new run rate you’re looking at?

No, we’re going to do better than that. We’re going to be in the 40s. Steven Pelayo – HSBC: By what timeframe?

How about second quarter?

Your next question is from Jeff Richards – Piper Jaffray. Jeff Richards – Piper Jaffray: I was hoping you could talk a little bit about capacity utilization, SOC and on the flash side. Where do you see that currently, where do you see it trending over the next couple of quarters?

Don’t know over the next couple of quarters but the trending has been up a few points. We’ve said in the past we’re operating 80% to 90%. We’ve been in that tunnel here for many, many quarters. That’s notched up a couple of points, two to three points over the last two quarters and the science of this isn’t perfect, there’s not a meter on every system but the indicators we get are consistent with the discussions with customers and they are doing everything possible to squeeze out the capacity because of the uncertainty in the markets that they are serving. I don’t actually have capacity utilization numbers on the flash side, we’re going to try to get those over the next couple of quarters but right now we don’t have the same picture on that front. I do know it’s high by the way, that that capacity utilization in our equipment remains quite high. Jeff Richards – Piper Jaffray: Back on the DDR trade market it looks like the Halum, the new architecture out of Intel, has been pulled forward in terms of release, will that accelerate the transition to DDR or do you still have to wait for the tear away platform in Q1 of next year?

We’re gated by the next tier in that food chain so we’ve got a list of customers we’re working with and we’re going to do our best to try to meet their ramp plans for DDR III but that’s what we’re focused on as opposed to the more macro issue at Intel. Jeff Richards – Piper Jaffray: Let me try it this way, your expectation is for DDR III to start to move into production in a meaningful way in Q1 still?

For the market.

For the market, correct. Jeff Richards – Piper Jaffray: Didn’t know, no curvation in that over the last couple of months or weeks?

Not on our end, no.

Your final question is a follow up question from Timothy Arcuri – Citigroup. Timothy Arcuri – Citigroup: I’m just sitting here looking at your model and I’m looking at you spending roughly 40% of your revenue on OpEx and I was looking at [inaudible] spends about the same amount. So we have the two biggest SOC companies spending about 40% of their revenue on OpEx in they’re semi-test business. As you look sustainably at the business that doesn’t seem like a sustainable number in terms of OpEx. Do you think that there is still another round of realization that all the companies in the industry have to go through that maybe the market opportunities in that as big as what the industry thinks and that it’s not sustainable to run at 40% of your revenues for OpEx and it’s not like we’re in a huge downturn right now. Yes, it’s a downturn but your business has been reasonably okay and yet you’re still spending 40% of your revenue on OpEx.

A large percentage of our engineering spending, very significant piece, is to get into new markets, it’s not trying to grind out more share in SOC tests. So that’s a very significant portion of our operating expenses in R&D. Stepping back further from your point, I do think depending upon what the market size ultimately ends up to be down the road it is certainly possible that there is too much spending. I wouldn’t say that today but that is a concern I think all companies have and it really ties back to what is the market size.

And I think the consolidation moves that are underway are reflective of that, that the spend rate to cover the amount of the market that can give you a decent bottom line return drives a very significant variety of R&D projects in this space and the companies in the market are moving and have been moving over the last few years towards being the general purpose suppliers where that R&D is high or into niche suppliers where they try to contain it and narrow it and just go after a subset of market. But I think as you see these consolidation moves that’s an obvious signal that the table stakes are very, very high in this market. Timothy Arcuri – Citigroup: Mike, I’m just thinking about most other sizable markets and it just seems to have the two biggest players in SOC spending that much of their revenue on OpEx suggests that yes, there have been some small M&A deals but it suggests that there has to be even more going forward because it doesn’t seem to me to be a sustainable model where folks can make money when there’s two big companies spending that much on OpEx. That was my point.

Yes, that’s a good point. Timothy Arcuri – Citigroup: Greg, when do you think that you’ll switch to your long term tax rate? Do you think taxes are going to jump up to the 20% to 30% next year?

I think Q1 2009 we’d likely be using the long term tax rate.

There are not further questions at this time.

I think that we’re fine and thank everybody for participating. We’ll see you next quarter.

Thanks everybody.