Good morning. My name is Thia, and I will be the conference operator today. At this time I would like to welcome everyone to the Teradyne, Inc. quarter two earnings release conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. At this time, I will turn the conference over to Mr. Andy Blanchard. Sir, you may begin.

Thank you, Thia. Good morning everyone and welcome to our discussion of Teradyne’s most recent financial results. I’m joined this morning by our Chief Executive Officer, Mike Bradley, and our Chief Financial Officer, Greg Beecher. Following our opening remarks, we’ll provide details on our performance for the second quarter of 2009 as well as our outlook for the third quarter. First, I’d like to address several administrative issues. The press release containing our most recent financial results was sent out via 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 slides on our website that 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. In addition, replays of this call will be available starting approximately 24 hours after the call ends. The phone replay number in the U.S. and Canada is 800-642-1687. Outside the U.S. and Canada, the number is 706-645-9291. The pass code for both numbers is 20503616. A web replay will also be available in the same timeframe. You’ll find it by going to teradyne.com and clicking on Investors. The replays will be available along with the slides through August 13. The matters that we discuss today may include forward-looking statements about events or future financial performance of the company. Such statements involve risks and uncertainties. There can be no assurance that management’s estimates of our future results or other forward-looking statements will be achieved. Actual results vary materially from such forward-looking statements. Important factors that could cause actual results to differ materially from those presently expected include: conditions affecting the markets in…

Thanks, Andy. Good morning everyone. My comments this morning are centered on three points. First, we are starting to fire on a number of cylinders that have been very depressed through this downturn, plus we are adding some momentum in our Hard Disk Drive test business. Second, we still have a way to go until we get all product lines engaged. And third, we are aggressively pulling on the supply chain and the product sectors that are ramping at the same time that we hold our internal costs in check. Greg will walk you through the Q2 results and Q3 guidance in a few minutes, but the high-level view is that we are seeing the first recovery stage in Semiconductor Test at the same time that our new Hard Disk Drive business is gathering momentum. Of course, the most important news is that we’ve seen a good rebound in SOC test off the very depressed Q1 levels. Total orders more than doubled in SOC system orders, were over $100 million up more than fourfold from the first quarter. This resurgence was driven by strong wireless and power management demand. Excluding Hard Disk Drive, our Systems Test Group saw a small increase in orders as a strong Mil/Aero buying offset continued softness in the automotive and commercial board test arenas. And in Hard Disk Drive, we were able to receive customer acceptance on most of the systems shipped in the first round of business we announced last quarter, and we secured a second round of orders that will ship through the latter half of this year. Overall, this gave us about a 70% sequential increase in total company orders in the quarter. So we are moving our revenue guidance to the $190 to $205 million range for the third quarter as…

Thanks, Mike. And good morning everyone. In addition to providing a recap of second quarter results and details on our third quarter, I focus my remarks today on cost control on our cash and on the dilution from our recent convertible debt issuance. Obviously on cost control, it's essential to keep a firm grip on the fixed costs, as that will give us the operating leverage to earn model profitability at quarterly sales levels of $275 million. This $275 million model compares favorably to our historical quarterly sales average of $329 million over the last over the last four calendar years, that is, after adjusting for the pro forma inclusion of Eagle and Nextest. As previously described, this $275 model excludes Hard Disk Drive business, as its model gross margins of 30% or lower, yet it should have the same 15% model bottom line as the rest of the business. While the vast majority of our cost reductions were permanent in nature we still maintain a series of temporary actions such as pay cuts and furloughs that total about $7 million a quarter. We intend to proceed quite carefully in releasing temporary pay cuts and furloughs, as we don’t want to reverse course if the upturn is not sustained. In some areas, though such as at our repair site in the Philippines, the furloughs have been relaxed as board repair activity has picked up. We've seen system utilization in board repair trending upwards since about March, so we've made this furlough policy change there. Now moving to our balance sheet, cash and marketable securities increased from $321 million to $373 million since last quarter. $44 million of this increase came from the convert and other non-operating transactions, but $8 million came from operations net of capital additions. Looking ahead, we…

Thanks, Greg. We are now ready to take some questions.

(Operator Instructions) and the first question will be from Satya Kumar with Credit Suisse. Satya Kumar – Credit Suisse: Yeah, hi, thanks guys. Some pretty good gross margin guidance out there for Q3, I was wondering if you could quantify what the margins would have been if there was no Hard Drive revenue in there?

Okay, yes. The Hard Disk Drive revenues accounted for about five points; it pulled us down. Satya Kumar – Credit Suisse: Okay. Did you say how much of the new orders you booked for Hard Drives in Q2 and what's the order outlook intake for the second half on the Hard Drive business?

We did not disclose that and aren't intending to break that level of detail out, but we did disclose that we expect $10 to $15 million of Hard Disk Drive revenues of which $6 million was from the first round of orders. And there's a round of orders; we are just not breaking that out. Satya Kumar – Credit Suisse: Did you say it was a new customer or an existing customer?

Existing customer. Satya Kumar – Credit Suisse: Okay. And lastly on the on the DDR3 front, can you give us a little bit more color on how the Eagle’s are progressing and what's happening on that front competitively with your Japanese competitors?

Satya, last quarter we talked about having one evaluation unit underway, and we were having discussions with other customers. We’ve not got two evaluation units, two different customers. So the evaluations continue as we speak. Satya Kumar – Credit Suisse: Thank you.

The next question will be from Gary Hseuh with Oppenheimer & Company. Gary Hseuh – Oppenheimer & Company: Great. Thanks for taking my question. Well, I’m looking at the gross margin number and at the mid point of our guidance, let say around $200 million in the September quarter, ex-HDD you’re basically you’re going to hitting in your core organic business 49% gross margin. So I’m assuming that’s ex any kind of inventory write-downs. That’s a pretty clean number. If I compare that to 2008 at roughly the same revenue level you’re at substantially lower gross margin I think, I might be cherry picking numbers but looking at the December quarter. Can you just walk me through basically what the margin improvement stems from in your core organic business?

Hi, Gary. This is Greg. The five points for HDD was the impact to the second quarter not for third quarter. Gary Hseuh – Oppenheimer & Company: Oh, I’m sorry. And then what, if you look at the third quarter gross margin guidance, if you strip out HDD, what is the gross margin guidance been for your core business then? Sorry.

Understood. We pick up a point. We’d be at 45 instead of the 44. We pick up one point. Gary Hseuh – Oppenheimer & Company: Okay, okay. So basically, then it actually looks like your gross margin levels kind of leveling out around the mid-40s in your core business, because if I do my math right, ex the inventory write-down and ex-HDD, you’re running about 44%, 45% in Q2?

That’s about right. And we’ve said in the past at our model of $275 quarterly revenue, we are certainly a ways from that, but we would expect to be at 50%. And that excludes Hard Disk Drive, because I can throw off the numbers depending upon when it hits in what quarter. So as we work our way over time at $275, we’d expect to get up to 50%. So you can see the math of that’s a little over point for each $25 million of sales, we would get. Gary Hseuh – Oppenheimer & Company: Okay. And just to kind of further get a sense of where gross margin is headed. Can you give a flavor of the Eagle Test trajectory here, particularly as a percentage of the mix?

Eagle Test and Nextest, at least to date, have not been a significant piece, if I put them together, they’ve been about 10% of our sales the last quarter or two. Gary Hseuh – Oppenheimer & Company: Okay. And final question here on your non-GAAP EPS guidance, what’s the non-GAAP share count? And does that deviate significantly from your GAAP share count assumption for Q3?

The non-GAAP share count would be probably about $180 million shares and we haven’t fully done the GAAP share count. The GAAP share count under circumstances can be a lot higher. But that requires us to get to a higher EPS number. But I think for both, it would be about 180. Gary Hseuh Oppenheimer & Company: Okay, great. Thank you.

The next question will be from C.J. Muse with Barclays Capital. C.J. Muse – Barclays Capital: Yeah, good morning. Thank you for taking my question. I guess first question on the HDD front, can you share with us what percentage of backlog that is, exiting the June quarter?

C.J., this is Greg. We don’t think it’s appropriate at this time to disclose the order or give you other information that you could get the order. But it is a second round of buying from our lead account. We are very pleased to get this business. And it’s a commercial terms that are better for us because we’ve done a lot of work to lower our costs. So we talked to you guys sometime back about we need to do improve our cost. We’ve done a big chunk of that. And this business we believe is going to be at our 30% standard margin. So we’re pleased with the cost progress and securing this customer. C.J. Muse – Barclays Capital: Okay. So I guess, are you saying that you expecting to hit that 30% gross margin in those revenues of 10 to 15 in September, or is that beyond September?

I would say beyond September, because in a 10 to 15, we still have that $6 million from the first buy, where there was zero gross margin. C.J. Muse – Barclays Capital: Yeah.

So if I could take that out, and then say what’s left is, let’s say it’s nine to get the 15. Then we’d hit the 30% for the nine. C.J. Muse – Barclays Capital: Okay. So that’s done there. And then I guess thereafter beyond into December, do you see any reason why that can go higher, or is that kind of the steady state level we should be thinking about?

C.J., hard to predict. We talked last quarter, and I think would reaffirm that. It’s such a lumpy business. It’s very hard to project a flat line, an average level and whether that average would stay. Our expectation is this will be lumpy going forward. If you are trying to sort of eyeball how much business that could be, it’s a fairly wide range, even where we are in the market penetration at this point. Maybe we could get 25; maybe we get up to $50 million a year in that business if we hold just our current position and our current share. But that's a pretty wide range. C.J. Muse – Barclays Capital: That’s assuming just one customer?

Yeah. C.J. Muse – Barclays Capital: Okay. All right and then I guess in terms of your 3Q guide, GAAP versus non-GAAP, can you, I guess, help me understand the impact of the convert on the guidance there? Are you including a non-GAAP the non-cash imputed interest?

We’re not in the non-GAAP, no. C.J. Muse – Barclays Capital: Okay. And what, I guess what on a GAAP basis would your earnings outlook look like?

Well. We have provided the guidance of the EPS range and… C.J. Muse – Barclays Capital: That’s non-GAAP though right?

We’ve given GAAP and non-GAAP in our release. C.J. Muse – Barclays Capital: Oh, I’m sorry. Okay, I can look in the press release for that.

And we’ve also just may help a bunch of you guys, because this is very confusing, is we’ve posted some exhibits to our website under the investor tab that shows both the, how the convert works from an economic dilution, and that’s more tied to how we intend to do our non-GAAP EPS. And then we’ve shown the convert from a GAAP calculation, which is an accounting calculation, which is quite conservative because we can’t take benefit for the option we have to buyback our shares at the strike price. But nonetheless, both calculations are on our website. And it is a very confusing topic. So we gave some examples of different stock prices that try to make it clearer for you guys. C.J. Muse – Barclays Capital: Okay. And then I guess final question in terms of the revenue mix for June, I guess $103 million Semi Test revenues. Can you share with us what Semi Test service revenues were?

Yes. Okay. Semi Test service was $38 million. C.J. Muse – Barclays Capital: Okay. And then in terms of I guess the Semi Test products, I guess it’s fair to say memory fairly week, Eagle Test up some and core SOC the primary beneficiary, or should we be modeling slightly higher Eagle Test?

Well. We think of SOC and Eagle as one and the same, because both products attack similar customers, albeit Eagle does open a new TAM. So we tend not to break those out, we put those together. C.J. Muse – Barclays Capital: Okay.

But SOC and Eagle are both moving up in a more at least in Q3 in a healthy fashion? C.J. Muse – Barclays Capital: Okay. And then I guess on the System Test side, can you share with the System Test service was?

Yes. System Test service was $17 million. C.J. Muse – Barclays Capital: Great. Thank you very much.

Okay. Thanks.

The next question will be from Jim Covello with Goldman Sachs. Kate Kotlarsky – Goldman Sachs: Hi, this is Kate Kotlarsky for Jim Covello. I’ve a couple of questions. First kind of a follow-up on the DRAM business, you talked about the revenues in the second half. I was just curious if there any revenues for the DRAM business implied in your Q3 guidance or whether it’s more kind of in the Q4 timeframe that we should anticipate that?

No. It’s not in the guidance. Kate Kotlarsky – Goldman Sachs: Okay. And then the other question I had was on the competitive landscape. One of your competitors recently introduced a new low-cost analog tester. Just curious if you are kind of seeing them in your engagements with customers and whether that’s having any impact on you guys?

Kate, we expect to see them. Obviously, they are bringing the product out now. So we don’t see them across the board. This is the space where we have a very good position with 750 line micro controllers and other applications. So it’s a solid position that we’ve got both on performance and cost of test, because of parallelism of the product. So we do expect to see them into the future. Their product doesn’t address all of the areas that the 750 does. So we’ll see them in a subset of that market space and we expect to compete vigorously with them. Kate Kotlarsky – Goldman Sachs: And then just a final question on the Hard Disk business, I know you obviously have a lead customer in that business. Could you share with us, how much the lead customer now kind of represents, whether I don’t know, you want to size it order wise or revenue wise, just kind of curious what the distribution is between your lead customer and Hard Disk drive and maybe some other customers that you have that are smaller?

We are concentrated with one customer at this. As we go forward, I think we'll probably as we get into multiple customers, we won’t be delineating how many customers. But at this point, we've entered the market with a lead customer. That's one of the reasons we can't be as forthcoming with units and total revenues and so on. We do have to protect the information around that lead customer. Kate Kotlarsky – Goldman Sachs: Okay. That makes a lot of sense, maybe just one other final question. If you could comment on the mix between IDMs and subcons this quarter, it would be great.

Yeah. I’ll give it to you in terms of demand, because that's the leading indicator, okay. We break it down between specifiers and OSATs. So the specifiers, which are IDM's and Fabless, represented about high 62%, 63%, so the subcons 37%. Kate Kotlarsky – Goldman Sachs: Great, thanks very much. That’s all for me.

Yep.

The next question will come from Krish Sankar with Banc of America. Krish Sankar – Banc of America: Yes, thanks for taking my question. I had a few. Mike or Greg, if you look at the DDR3 market, let's say in 2010 or in a normalized cycle, what do you think is the actual market size? And what do you think is the realistic market share potential for Teradyne?

Krish, that’s a good question and a tough question. Maybe the best way to think about that or to answer that, address that question, because I think it's not going to be very satisfying to say how much it is, because it's very uncertain, given the heavy reuse that's going on. But if you just give me a minute, I'll try to organize some thoughts around how we are viewing that market. Okay, and then I think you can speculate on what the penetration might be. But very quickly, the volume on DDR3s are increasing. Device volumes are expectations going from 20% of total to 40% or 50% by year-end. The issue that exists out there I think you know is that the current generation testers are being modified are being used for the 1.0, 1.3 gig speed grades. And there is just very, very heavy pressure to reuse that and avoid CapEx by customers. So that's the big headwind, and that's what makes the market hard to predict. Now there's been a very slight uptick in June from the sense that you can see. So there's a little bit of buying going on. So the issue has been, when will additional capacity be needed? There are a lot of predictions out there. Most point to 2010 with maybe a little in 2009 that looks right to us. So the issue that we see is, when the capacity is fully utilized, what performance will customers buy? Our proposition to our customers, potential customers is that we've got a product that's architected for two generations, DDR3 and DDR4. In other words, it's really got headroom for higher and higher speed grades. And the question is, and what we are hoping is customers will buy at the top end of performance, as they need future capability from multi-generation. Second is the system is configurable to handle a variety of performance DRAMs, the graphics DDR chips as well. That's because it's got the headroom on speed. So it covers a broader TAM. We hope to be able to access that. It's got very good accuracy specs, which translate to yield, and it's very competitive on parallelism. So when we put all that together, that's the picture that we are proposing. Now how much and how, when that capacity runs out, since we don’t have an installed base in these customers, that’s not something we can probe easily. But the issue is, will customers be interested in that value proposition? And obviously, the hope is that the position of the UltraFLEX there will be received well. Krish Sankar – Banc of America:

They are really evaluating it for broad TAM of current generation, the parts that they have. The highest speed grades that they have, as well as the specialty graphics chips. So as I’ve said that, our hope is that they see it as a headroom tester for the future, not a spot solution. And we think that if they do see it that way that will change the economics, as they look the CapEx that they've made in the past for each node. Krish Sankar – Banc of America: Okay. Okay. I just had a couple of other questions. One is, how much do think would the turn's business be in September?

How much do we think it will be?

How much book ship?

In the next quarter of Q3.

In Q3.

Somewhere in the 20s. Krish Sankar – Banc of America: Just 20% is going to be turns business?

20% to 30% that neighborhood. Krish Sankar – Banc of America: Okay. And how do you think of the incremental gross margin once we go beyond the $200 million revenue level assuming no HDD?

Well. We get to 50% at $275 million. So you can model it from where it is without HDD, up to that amount. Obviously, it assumes there aren't inventory surprises. And then thereafter, once you get above $275 million, it starts rounding closer to a half a point, each $25 million of incremental revenue. Krish Sankar – Banc of America: Okay, all right. Thank you.

The next question will come from Raj Seth with Cowen and Company. Raj Seth – Cowen and Company: Hi, thanks. Most of mine have been answered. But I’ve got a couple of little ones. Mike, the DDR3 tester, the target margins there and I understand you've yet to revenue any of these, but is that above or below corporate margins, how do we think about margins in this product, when it eventually starts to take hold?

The margins in that product, the way we're looking at it now, it will probably be close to the model margins. It could be a little lower. We wouldn't expect them to be higher. There's also a mix of products. There is the graphic chipsets and then there's the DDR3. But when you put them all together, it likely will be a little bit lower than the corporate standard. Raj Seth – Cowen and Company: Great. That's helpful. Can you comment on utilization you see in your installed base? And perhaps you can talk about how to think about what working capital does, as we start moving into a ramp. I mean you have been working your inventory down, et cetera, et cetera. But what happens here? How does the balance sheet look as we start to ramp? Great, thanks.

Yep, equipment utilization at customers Raj, is that what you're asking? Raj Seth – Cowen and Company: Yeah.

Yep. The utilization has moved up about 10 points from last quarter to this quarter. I think the interest, so was in, let's say, around 60%, now around 70%. The interesting thing that's happened is that, by our data and our installed base, the OSAT utilization has actually been gone up about twice in that timeframe. What the utilization increase has been on the IDMs. So that's why we had a 3X growth in our OSAT bookings. Even though, it's coming off a low number, it was, the real big piece of growth on bookings was from that front. And that's correlated back to this growth in the utilization. Raj Seth – Cowen and Company: Right. Is that 70% for the OSATs that you're talking about or is it 70% now across the board?

They are kind of close now. So you could use around 70% for both. Raj Seth – Cowen and Company: Thanks.

The next question will come from David Duley with Steelhead Securities. David Duley – Steelhead Securities: Yes and congratulations on potentially achieving profitability in this upcoming quarter here. It looks like you're the first backing company to do that. A couple of questions from me, could you talk about the increment in revenue you look like you're going to see in your core business? I guess, if my math is right, you are going to go from $130 million to like $188 million, is the midpoint of your guidance. And is that all the SOC business, or is there any contribution from the flash guys? And given flash utilization rates and NAND are pretty good; would we expect to see some ordering there?

It's essentially all SOC test. Flash is still expected to be very low in the third quarter, so it's essentially all SOC test.

Dave, if you look at industry demand, not just ours, but industry demand in memory in total, it's still very anemic. David Duley – Steelhead Securities: Yeah, I would suspect that there might be some sort of snap back in that segment at some time or another, and I was just wondering, are there any early indications of that? Are the consumables levels going up, service contracts, anything that you might look as a leading indicator and say that they might actually spend some money again in Flash?

Utilization is pretty high. It has been and continues to be, so the equipment’s been squeezed pretty hard. Our repair statistics, the board cycle failure rates, have moved up since the March timeframe. So a lot of those leading indicators are trending towards the healthy side, but there’s this huge back pressure on CapEx. So I think the notice will be short, and that will tend to be turns business rather than sitting in backlog for a very long. David Duley – Steelhead Securities: Okay. And I was wondering, you had an inventory write-down I’m not sure, it was like $11 million. Could you talk about exactly what was written down and why?

Okay, yes. The single largest piece was a part from a supplier connected to a new product at Nextest, and the supplier is reimbursing us for some part of it. We have to go off and repair some boards at customer sites. And so that was an inventory provision to rework those boards. Each of these items contributing to the charge, each sort of have their own unique story. So there are a couple of items that that was the most significant. And then the other one was just largely trying to be a little more conservative, given the demand. David Duley – Steelhead Securities: Okay. And final questions from me is you mentioned like with these $25 million of incremental revenue your gross margin should expand by roughly one percentage point. Is that math just solely driven by volume, or is there something else that we should be thinking about regarding the mix or anything else like that?

No, it's purely volume. David Duley – Steelhead Securities: Okay. Thank you.

The next question is from Timothy Arcuri with Citi. Timothy Arcuri – Citigroup: Hi, I got the call just a bit late here, but I understand that $26 million of the $66 million of the systems revenues in June were HDD. How much of the $89 million in bookings was HDD?

Tim, you missed our reluctance to disclose that. Because we're so concentrated on customer side, we're holding that information. I think you understand why. Timothy Arcuri – Citigroup: Sure. I guess, Mike, I'm just trying to understand. You guys told us what the initial bookings were. You told us that you took 26 of that in June, and there's 5 or 6 left over for September, and then there's another kind of, what like I guess, $10 million that's kind of revenue from this booking. So I guess maybe, if you can't give us what the actual bookings number was, is the sort of lead time the same? So whatever you're going to revenue in September had to be booked in June?

Yeah yes. That is correct. Timothy Arcuri – Citigroup: So the follow-on would be that extra $10 million or so some thing like that?

There's, you can't derive it, is the short answer, because it doesn't all go out in the September quarter. Timothy Arcuri – Citigroup: Okay. Okay. So then there is some that spills over into December?

Right. Timothy Arcuri – Citigroup: Okay, got you. Second thing, do you think that book-to-bill is going to be greater that one in Q3?

Tough question, very hard to tell. What I will say is, we always keep the elastic in that. So we can move either ways. So our science around forecasting, quite honestly, is not highly invested science, so and with lead times and so low. We honestly don’t much predicting there. We manage a slot plan, we manage the supply chain. But I will say is that the demand that we saw in the first quarter activated by 40% of our customers where active in that process. So if the market overall becomes more healthy, you would expect who would be above 40%, so things could go up. At the same time, it's a very cautious market so some of those customers who bought will cause hopefully be replaced by others. So it’s a tough one to call and we’re just managing this based upon the short-term demand that we’ve got and the flexibility we want to keep in the system. So, sorry I can't answer it as directly as you'd like. Timothy Arcuri – Citigroup: Understand, sure. Okay so, of the $103 million that was revenued in Semi Test in June, just like a couple million of that was memory? Is that sort of the right way to think about it like $2 million, $3million, and $4 million bucks?

Yes. Timothy Arcuri – Citigroup: Okay. And then relative to your DDR3 tester, have you been qualified at that customer yet or is it still in qual?

Still in qual. Timothy Arcuri – Citigroup: Okay. And then just last thing just so I’m clear. So at the mid-point of your September quarter revenue guidance you’re expecting between 10 and 15 million of that to be HDD. Is that right?

Correct. Timothy Arcuri – Citigroup: Okay, thanks guys.

Yeah.

The next question is from with Atif Malik with Morgan Stanley. Atif Malik – Morgan Stanley: Hi, thanks for taking my question and nice quarter. On the HDD shipments in second half of ’09, can you clarify is this going to be the redesigned product and what gross margin that you targeting for this product?

For the Hard Disk Drive. Atif Malik – Morgan Stanley: Right. Second half he’s saying the mix.

Yes. Once we get through the first $69 of zero gross margin, the business thereafter on averaged should have a gross margin of 30% some of the little bit lower, some will be a little higher. But on average, it will be 30%. Atif Malik – Morgan Stanley: Okay. And can you talk about seasonality in the HDD market? Is there anything like that? Because incentive market there is some seasonality in Q4, but in the HDD market is there anything like that?

Not enough data points for us to be able to conclude data. I think that would be a thought once we were able to expand in the customer base. What we know now is it's very, very lumpy, and we were pretty closely with our current customer to respond to the demand. So honestly, I couldn’t tell you if this time next year it’s going to be similar to what we’ve seen right now. Atif Malik – Morgan Stanley: Okay. And then on the high-speed DDR3 memory, I’m bit puzzled puzzle at Advantest, yesterday their ordered a growing quite nicely and they have got DDR3 orders from the second biggest Korean memory maker. And I’m just wondering, when should we see a pickup in your new volume business in DDR3, because you guys have been evaluated for a long time now.

Well. It’s a very extensive evaluation as we might expect, given the fact that we haven’t been a supplier to them. So, and you are right. Adventest is in that business has an install base and therefore gets some business flow through, even though the overall market is very low. All we can tell you is that we are still, we believe that we’ll still execute here in the qualification phase. So that we’ll have installation in the second half and when have that in think then we’re at the table to able to vie for production business. Atif Malik – Morgan Stanley: Okay. And one last one, did you disclose your flash revenue in 2Q and can you talk about the reuse in NAND from a DRAM equipment that’s being idled from [kimmondine] and Tier 2 Taiwanese guys and also the impact on the NAND market from the NOR equipment that’s coming from Spansion so is the reuse from DRAM and NOR equipment impacting the NAND market?

I’m sure it is I can’t lay out for you what the bits and pieces of that are, but that’s one of the components. In addition to aggressive attempts to optimize test flow and so on. So they are all pieces and that I’d say that in this cycle that’s obviously in much bigger piece of the head wind that we’re running into but it’s hard to quantify. Atif Malik – Morgan Stanley: And then your flash revenue is in 2Q?

$2 million. Atif Malik – Morgan Stanley: Thanks.

Your next question will come from Mark Kurland from New Castle Funds.

Yeah, hi. I just, I have one question that I just want to ask. When you went through the R&D and the SG&A expenses for the quarter come in up? Would that be the percentage we should look going forward? Or with that we absolute dollar amount be the numbers we should be the looking at going forward.

Got it. Both the percentage in dollar is what we expect for the third quarter. But the percentages will vary in any one-quarter depending upon the sales level. The other vertical that’s going to could throw you off is the operating expenses next quarter. If you do the math, you will see that we are forecasting around $84 million, $85 million in that neighborhood. Those operating expenses we intend to hold at about that level with temporary pay cuts. At some point hopefully not too far in the future business improves and we can relax some of these pay cuts. So at some point the $84 would go back up and then once it goes back up because pay cuts are restored, and if we are making model profits and we are much healthier than we would expect to have more variable compensation. So 84, 85 is the low point for our SG&A, it could go as high if we are making attractive profits it could go to the upper 90s. Mark Kurland – New Castle Funds: Okay. Thank you.

The next question will come from Patrick Ho with Stifel Nicolaus. Patrick Ho – Stifel Nicolaus: Thanks a lot. Couple of questions, Mike, you mentioned that wireless and power management drove your 2Q SOC test orders. What segments are you hoping to see pick up in 3Q in addition to those two marketplaces?

Patrick, the expectation is that we will see the same kind of distribution I think RF will lead the way, power management will be strong. We’re going to see a little resuscitation in sectors like image sensors. So it’s going to be a little bit broader than it was I think in the second quarter, but I think the Pareto would look similar in terms of market segments. Patrick Ho – Stifel Nicolaus: So let me just a follow-up on that. So you’re still implying that until a lot of these market segments hits there is still a lot of upside potentially in your semi test business because those marketplaces or the other marketplaces haven’t really hit full force yet?

Yeah. I think that’s exactly if you look at it either a customer or from a segment standpoint, it’s great to have an increase in business, but there is such a long way to go to get anywhere close to where we’ve been. I think there is obviously some room there, but we’re all facing the same thing, which is the tough world and all the question marks around that. Patrick Ho – Stifel Nicolaus: Great.

On a comparative basis, there is a ways to move.

If I can add one point to what Mike said just to link it back to the model, one slide that we’ve shown shows that if you look back the last four years and pick those quarters that our sales averaged $329 million and that’s without HSM, obviously, or Hard Disk Drive our existing businesses. We’ve obviously grown market share over that period, but not adjusting for that just using the actual sales putting in next test an Eagle Test. We have sized the business 20% lower than historical sales. So I think the key thing that its helpful to understand is HSM, HED, we see as upside not something that is a must have for our model. We think the existing businesses can get us to model profitability. And I can take you through the math of that, if you’re interested at some point. But HSM… Patrick Ho – Stifel Nicolaus: That would be great at some point. Just following up on some of the NAND Flash related questions. What would you say would be the biggest trigger point [Inaudible] in NAND Flash test spending? Is it the transition to the 3X node? Would that spur on testing as demand for some of the higher capacity NAND flash devices take hold?

Yeah. I think its unit volumes I think if the big squeeze on the capital and the trade-offs that are being made in testing and I will start to affect yield. And what you said, I think all of those things can cause it to break out. But to this point, we haven’t as you can see from the numbers we just haven’t seen much there at all. Patrick Ho – Stifel Nicolaus: Final question from me in terms of the HDD test business. Are you still primarily focusing on the 2.5 mobile form factor, or is there a potential for you to expand into the more traditional desktop side?

No, the focus is around the mobile applications in the 2.5-inch form factor. Patrick Ho – Stifel Nicolaus: Great. Thank you.

The next question will come from Gus Richard with Piper Jaffray. Auguste Richard – Piper Jaffray: Thanks for taking my question but pretty much they’ve all been answered. Thanks.

All right. Thanks Gus. Auguste Richard – Piper Jaffray: Thank you.

And Thia, I think we have time for probably just one more question.

Yes sir. The final question will be a follow-up question from Krish Sankar with Banc of America. Krish Sankar – Banc of America: Yeah. Thanks for taking it again. Just a quick question I know you guys don’t disclose the Eagle Test sales. Can you tell what how much percentage do you expect it to grow from June to September?

What percent we expect Eagle to grow from June to September? Krish Sankar – Banc of America: Yeah.

Okay. Well, maybe I’ll give you that one that I will be okay. 21%. Krish Sankar – Banc of America: 21%. And the ETS-88, the low cost analog products. Is it expected to have similar Eagle Test gross margins or like is it going to 60%, 65% range? Or is it going to be lower than that?

Similar to Eagle Test attractive has high gross margins. Krish Sankar – Banc of America: Thank you.

There are no further questions.

Great. That concludes our calls. Please if you have questions feel free to give me a ring here in North Reading.

Thanks, everybody.

Thank you all.

Thank you.

Take care.

Ladies and gentlemen, thank you for participating in today’s Teradyne, Inc. quarter two earnings release conference. You may now disconnect.