Good afternoon. My name is Lemont; and I will be your conference operator today. At this time I would like to welcome everyone to the first quarter earnings 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, Ms. Shilton. You may begin your conference.

Thank you, Lemont and good afternoon, everyone. Thank you for joining us for the Tessera Technology’s First Quarter 2009 Earnings Conference Call. This call is being broadcast live over the internet. A webcast replay will be available at tessera.com for 90 days after the call. In addition, a telephone replay of this call will be made available for two business days beginning approximately two hours after the completion of this call. To listen to the replay in the US, please dial 800-642-1687 and internationally dial 706-645-9291. The access code is 93592195. I will now read a short Safe Harbor statement. During the course of this conference call management will make a number of forward-looking statements. Which are statements regarding future events including the future financial performance of the company. These forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual results to differ significantly from those projected. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this call. More information about factors and they cause results to differ from the projections made in these forward-looking statements can be found in Tessera’s filings with the Securities and Exchange Commission including it’s annual report on Form 10-K for the year ended December 31, 2008 especially in the sections of these filings titled risk factors. The company disclaims any obligations to publicly update or revise any forward-looking statements to reflect events or circumstances that occur after this call. On the call today from management are Hank Nothhaft, Tessera’s President and Chief Executive Officer and Mike Anthofer, Chief Financial Officer. During this call today, management will discuss certain non-GAAP financial measures for comparison purposes only and they will be using non-GAAP numbers in their prepared remarks. The non-GAAP amounts of cost of revenues; research and development; selling, general and administrative expenses; net income and earnings per share do not include the following: stock-based compensation, acquired intangibles, amortization charges, charges for acquired in-process research and development and related tax effects. Management believes that non-GAAP amounts provide a more meaningful comparison, a measure of quarter-over-quarter and year-over-year financial performance. Please refer to the company’s first quarter 2009 earnings press release and to the company’s website for reconciliation of non-GAAP measures to GAAP. After managements' opening remarks we will open the call to your questions. So, that management is able to respond to as many of you as possible, please restrict yourself to an opening and a follow-on question. And with that, I will turn the call over to Hank.

Thank you, Moriah. Greetings to all of you and thank your for your interest in Tessera. I will discuss our first quarter 2009 results and recent accomplishments and then open the call for your questions. Total revenue for the first quarter of 2009 was $114.6 million. We managed expenses tightly during the quarter, particularly with respect to litigation, which was significantly below what we spend in the previous quarter. We generated substantial free cash flow, which was driven primarily but not solely by the $64.1 million Amkor payment we received in the quarter. As a result, we now have $383.8 million in cash, cash equivalents and investments on our balance sheets. In our Micro-electronics business, we generated $106.6 million in total revenue in the first quarter of 2009. 100% of which was royalties and license fees. With Amkor’s payment, we demonstrated strong growth year-over-year. Our royalties and license fees without this payment exhibited slight growth year-over-year, which is encouraging considering the challenging macro economic environment that existed in fourth quarter. Our royalties and license fees were negatively impacted by non-payment by Qimonda, who has publicly declared insolvency in Germany. Over the next few quarters, we believe this company’s market share will be absorbed by other suppliers, some of them are licensees of ours. When looking at our overall served markets of computing and wireless mobile devices, we believe there was an inventory burn off in the first quarter as companies cut back unit shipments more than end demand dropped. This later resulted in many rush orders and we are seeing company's first quarter results are stronger then anticipated, although still significantly compared to the first quarter one year ago. Short term visibility has improved a bit although it is still not clear if current improving conditions are sustainable. The second…

Thank you Hank, before I begin my financial review of the first quarter of 2009 I want to remind you that starting in January of this year we have two reporting segments, Micro-electronic and Imaging & Optics. With any segments, we have two revenue growth categories, royalties and licensees and products and services. Although products and services category in the Micro-electronic segment well be near zero for the year due to our previously stated decision to exit our government business. We generated an excellent first quarter overall for the first quarter total revenue was $114.6 million which was up 93% year-over-year and 66% quarter-over-quarter. Micro-electronic royalties and license fees were $106.6 million up 130% year-over-year and 81% quarter-over-quarter by the $60.6 million for Amkor as a result of our successful arbitration. As we previously disclosed the total Amkor settlement amount was $64.1 million, $3.5 million of that was classified as interest income with a balance $60.6 million in revenue. First quarter 2009 Imaging & Optics revenue was $8 million. Royalties and license fees were $5.3 million up 34% year-over-year and 48% quarter-over-quarter. Imaging & Optics product and service revenue was $2.7 million down 60% year-over-year and 52% quarter-over-quarter largely due to the slowdown in semiconductor equipment purchases which negatively impacted our lithography business and weakness in the communication sector related to high end router that use our micro optics high end lenses. Total GAAP operating expenses were $46.8 million and broken out as follows. Cost to revenue $4.1 million, R&D $16.6 million, SG&A up $17.5 million and litigation expense of $8.6 million. As mentioned our litigation expense was much lower than both the prior quarter and our guidance as the Subcon ITC case which resulted in the reduction and outside legal fees associated with this activity. As a result of…

Thank you, Mike. Before I open the call for questions and answers I want to discuss an issue that is very import to Tessera. Innovation and its role not only in our company's future but the future of the United States. As I have shared with many of you before we believe innovation is one of the United States' greatest renewal economic resources and as such deserves to be protected. Especially as desegregation of US based companies continues. Manufacturing move to low cost markets and intellectual property increasingly becomes our major strategic reserve. A strong patent system is essential for the continue protection of our innovation. We believe Washington should be focusing on patent reform that strengths the US patent and trademark office to ensure better quality patents. Not reforms that weakens the patents system that has and continues to encourage innovation and economic growth. We believe the patent legislation currently pending in the Congress has a potential to weaken the patent system and therefore undermine one of the country's key competitive advantages. That also has a potential to greatly harm innovation and by making it more costly for small end vendors such as Tessera to protect our inventions. And as a result the ministry and centers for investing and developing new technologies. We've made progress getting positive changes accepted into this legislation in the Senate. Such as the Gatekeeper Concept on the issue of damages. And we will continue our efforts to improve the proposed bill. In fact today our General Counsel testify before the house to the judiciary committee on this very matter. We will continue our efforts at Tessera to drive long-term growth for our company and our shareholders. As Mike said earlier, we generated an excellent overall first quarter and we will build from that base for the duration of 2009 and beyond. We remain excited about the long-term growth potential of our microelectronics efforts such as MicroPILR, standard air cooling and our imaging and optics business. The call is now open for questions, operator.

(Operator Instructions). Your first question comes from the line of Brett Hodess with Banc of America

Hank I wonder if you can talk a little bit about if Dblur has licenses yet or any revenue streams yet or if you’re in discussions then you can give us some timing of when that might start to have some kind of contributions and also if you could give us a little bit of an update as well on when you talked a little bit of the imaging side and some of the new licenses but [Technical Difficulty].

Operator, hello.

Yes, I am here.

Mr. Hodess was cut off in midstream, was that him being cut off or is the entire call?

Yes. Mr. Hodess (Operator Instructions). Your line is open.

Hello Brett, can you hear me? Brett is that you?

Yes, it's Brett.

Okay. This is Hank. I got your question on the Dblur. You were just giving us a second follow-on question.

Yes, so the first one was the Dblur, a second was an update on timing when you think you might start to see more products from the other imaging licenses start to ramp up?

Could you be more specific as to what products you are referencing?

Just in general on the imaging side, like the Q Technologies and some of the other.

I understand. Okay. So, thank you for the question, Brett. First of all the question regarding Dblur. Dblur was a venture back company, headquartered in Israel. The transaction that we entered into was an asset by. As a result we ended up hiring a small number of employees Dblur. We were able to acquire some interesting IP. Some technology know-how, and several contracts that they had in place. It is too early for me to make any prognostications as to when and if any revenue would result from this transaction primarily, we were looking at the intellectual property employees and the IP as the primary benefits of this transaction. Secondly, in response to you question about imaging and optics. Royalty and licensing development, I think, that we will see in late Q3 MVP production occurring from Qtech and in the fourth quarter we believe that they will be in a position to start manufacturing wafer-level optics products and so with the typical lag times in both we would expect to see royalties in the 2010 first half time frame. In terms of other developments on previous calls we have mentioned, that we have been fortunate enough to be winning a series at the time and IT awards, those have continued to material prepare us on schedule and so in the second half of 2009 we would expect to see royalties starting to slow in from those activities.

And just a quick follow-on, if you look at the underlying units side on the micro electronics, as you mentioned is there is a pick up in 2Q this year, is there any reason for us to believe that if we look at sort of the industry rates are pick up in DRAM and cell phone here in 2Q that we shouldn’t be able to use that for a basis for 3Q micro electronic royalty rate?

I think that that it’s a safe that, if you can track wireless device cells and DRAM shipments primarily because that’s a good colliery for the demand that our licenses are seeing and therefore flows through the last one quarter and the rare, and so just as we had a say a much better quarter, this quarter then some of our licenses you can see that were providing guidance based on a quarter now where our license are coming out of it based on their comments that we are now experiencing those royalty rates. And then as Q3 as you mentioned if the uptick that everyone appears to be experiencing right now continuous then we will see that uptick in Q3.

Got it. Thank you.

You are welcome.

Bennett Notman - Davenport & Company: Hi. Could you just tell us how much [Kamanda] impacted in the quarter and then how much either upon just for next quarter for the year we should think about them as having an impact on you?

Bennett, this is Hank. We don’t really reveal account results for licensees. Certainly I think it's safe to say that they are less than 10% customer and likelihood if they had paid and not gone into insolvency we would have beat our guidance. As a year goes on we believe that their market share was pretty low in the first quarter already maybe less than 5% of the market. We will be absorbed by other players in the market many of whom have licenses, so as that source out and that we will end up getting some of the revenue from other sources, but it's really hard to predict exactly where that market share will go. Bennett Notman - Davenport & Company: Okay. And then the asset impairment charge that you had in the quarter was that in the SG&A line or where did that show up in the income statement?

Bennett, this is Mike. I will answer that. It shows up in other I&E, so it's netting of there was interest income of approximately $4.6 million and then the other bigger item with $1.6 million impairment. So, it’s in the other I&E item, not in SG&A which is consistent with where prior we have had $1.5 million of total impairment charges through last year, through the December quarter, so, this will be another $1.6 million for total of $3.1 million all of which have been charged to other I&E. Bennett Notman - Davenport & Company: Okay. So the $17.5 million that we saw in SG&A is kind of a good run rate number to use?

That’s a GAAP number it’s reasonable. Bennett Notman - Davenport & Company: Okay, good. And if I heard you right you said litigation expense will actually be down marginally in the second quarter from the first quarter, is that correct?

Moderately, yes. Bennett Notman - Davenport & Company: And then would we expect it to increase in the back-half of the year or is that really just a function of depending on what happens with the DRAM case.

I think it’s the latter that there are several dependencies here that would be difficult to predict exactly what direction that would take in the second-half of the year. Bennett Notman - Davenport & Company: Alright, great. Thank you.

You’re welcome, thank you Bennett.

Your next question comes from the line of C. J. Muse with Barclays Capital.

Yes, thank you for taking my question. I am just thinking medium-term what do you think your maintenance litigation expense will look like?

Well we are not able to give guidance beyond this next quarter and I am not sure exactly what do you mean by maintenance litigation, it has been fairly specific from driven by that. So all we are willing to say is that it will be moderately lower in the second quarter based on what we know and the activities and then beyond that C.J. it’s going to be just highly dependent on events. Obviously we are endeavoring to control our expenses in all areas and will be the same with litigation but. It is event driven at this point and so I love to try to give you some number for the third or fourth quarter that you can hang your head on. It wouldn’t be fair at this point?

No. I was thinking more of 2010, 2011, but is 2007 is a good comparison. And then, wild card being further trials. Just trying to understand longer term cash flow operating margin picture?

If we knew, which was don't and we have no idea what's going to happen at the ITC. We might have a better idea. But we don’t. So we can't . And we don’t have a better idea.

I mean, the guidance gave you should model some. And some reasonable amount in terms of going forward if you are looking at 2010, 2011 there is likely to be some but as far an exact amount. Honestly, to some degree your guess is going to be as good as ours given and something because we just don’t have a specifics at this point.

I guess, moving to another service on a DRAM side as we try to model out the out quarter and nears with Qimonda payer and really going lower in the mix. How should we think about your market share for DRAM going forward?

Well, I think we publicly announced to our licensees and there is fairly a public market share numbers available for the DRAM market from various market resource groups like Gartner. So, it would be pretty easy to track our licensees in their market share and drop reasonable conclusions about our market share.

Alright, moving on to something else the. How about 100 million revenue target for 2011, what kind of assumptions are you making there in terms of the mix between packaging, frame expenses, royalties are for the complete one stack and IP will that reflect the out of focus?

Well I think a general comment I would make is that in recent times I make sure in this current quarter but historically over say four or five quarters the product revenue given the maturities some of the businesses we bought and some of the immaturities, some of the businesses be brought, product revenue in the imaging optics is running around 70% and royalties and license fees is running in about the 30% range. We have done a very details bottoms up plan for imaging and optics for the last three or four months and the resulting PALB came out of that shows a shift of revenue to where we would be expecting the receiving 70 to 75% of our revenue from royalties and license fees and 30% from products in the 2010 time frame.

That’s helpful and the last question from me, in the past we have discussed different potential of for attacking the handset supply chain, fully integrated solutions on what end of the spectrum versus you with working with the suppliers that the chain what you thought today on where the industry is heading?

Well, we do believe that the wafer-level camera technology is in early adoption now but the level of enthusiasm and the energy behind adopting it is several levels greater then it was 12 months ago, so there is there are real momentum shift and there are people now, now thinking there are got to thinking about producing wafer-level cameras the obviously people should there is thinking about how can we produce them and how quickly can we get in the market. So with that in mind, I do think it is safe to say that the camera-module markets are very complex, multi-tiered entity at this point in time. And various players, I am sure evaluating where they stand in it and we believe, there will be fewer layers and fewer players in the supply of camera modules. And so that transition is starting to occur and I think will occur fairly rapidly over the next 24 to 36 months.

Very helpful. Thank you.

Thank you.

(Operator Instructions)

Well, operator, are there any further questions?

Okay. You do have a question from the line of Kevin Vassily with Pacific Securities.

Yes, hi. I wanted to follow-up briefly on your comments about the thermal management technology. Did you mention that you demonstrated about a 200% efficiency increase over traditional technology in a kind of the laptop kind of device? Is that device that expect for manufacturer, was that a demonstration device and where are we in the kind of process of seeing that type of technology in any kind of meaningful way in the market, some point over the next several quarters.

Yeah, so it’s a great question, Kevin, I appreciate it. So, I think, you could tell by my comments that we were quite excited and are quite excited about our silent air cooling technology and we continue to make great progress not only in our own internal developments, we have been able to purchase some additional intellectual property outside the company as I've mentioned. In terms of this most recent comment I made about the 200% cooling efficiency that was in a demonstration device and where we stand in the process of introducing the product is that we haven’t solved every technical problem associated with productizing [dynamic] cooling but we've made tremendous trials and they are getting fairly close, so close that we are actively out promoting our capabilities with a broad range of OEMs. We think that the more intensely demanding the design profile is for the device, the more value we can bring the proposition. And so, we're actively on the road marking on doors if you can imagine primarily in Asia where most notebooks emanate from in terms of the actual manufacturing and we're looking to sign agreements with potential OEMs and move to productization which we would expect for over the balance of this year.

With the relationships you had to establish to get a bitted with this technology be with directly with the OEMs or do the notebook ODMs [Princeton] Taiwan have some say over how this might rollout?

Kevin, this is a not just this like our efforts in the wireless arena, with some of the imaging and optics. So, we feel that we have to call on both the OEMs as well as the manufacturers in Taiwan and so get buying it those levels. But I think when we signed our first deal, through the plan, I think, the OEM will drive the final decision, but they would have to be a buy in at some level of the OEMs in Taiwan.

Okay.

And I must say, that there is quite a bit of interest frankly, they have seen interest out there in finding, in some of this, more challenging the designs the more favorable it is for what we bring to the table, but there is quite a bit an interest out there.

And any sense that you could may be put some parameters around what do you mean by the more challenging of a design, is it smaller?

Yeah. The smaller, it has been a smaller more demanding, higher process, higher speed processors, operating environment, in terms of where its going to be used, our sensors the environment in the way is, Those are some of the factor, so .

Okay. And then one last question on that and then I will stop, that the metric that you use, the 200% efficiency, are you measuring the ability of this technology to you improve, kind of the power required to achieve a similar amount of kind of thermal cooling or are you providing a better, or what so I can better way to describe, would it be, kind of better and thermal environment for similar amount of power consumption. How do we think about…

Yeah, That’s that later than the former, Kevin, so When I describe the 200% improvement, it was amount of the remove from the [amount] of power in to the device.

Okay. Perfect. Okay, thank you, it is very helpful.

Well, thank you for those questions.

Your next question comes from the line of Raj Seth with Cowen & Company. Raj Seth - Cowen & Company: There is a couple of quick once. Hank, I wonder if you can make any comments on how does think about royalty rates in optics, your products expense are used to talk about for the full stack something on the order of $0.20. A unit was reasonable, you obviously got different pieces. You got the wafer-level camera, packaging which I suspect is much lower in royalties maybe like the packaging royalties you get on the micro electronics side, I mean, that’s sort of smart optics which I don’t know how to think about, is there anything that you can give us, that are even with broad ranges to help us think about royalty rates in this segment?

Hi, Raj. Thank you the question. I will see what I can do. I was thinking I gave away our pricing. But I think as we have discussed in the previous calls about the company, we maybe sure in acquisitions in created our imaging and optics division and as things have sold out we have today basically two types of intellectual property, one is infrastructure IP and one is designing IP. So the infrastructure IP centers around sensor packaging which is our MVP product range the way for level optics and if you get somebody there license both of us from you like NanoTech and Qtech the both combine and they can actually manufacture wafer-level cameras. And so, in that environment we are able comment upfront license fees and than we get a per unit royalty pretty low and then we also get recurring revenues and royalties from the lens stack from the wafer-level optics side of it, and so in the probably the most fair balance case lease value provided. We are in the $0.02 to $0.03 range of the low end. And it can get over $0.20 under certain environment. I am talking about the infrastructure IP side of it. And then the small optic side is interesting because we’re rolling out more and more features and therefore we are commanding more and more value added, and so it does sort of stack on itself. So, we are able to come back now the extended after field capabilities with a FotoNation sort of post imaging processing capabilities and really creates an excitement in the marketplace and we have a quite a platform there. And so, once again, I can give a broad range on how meaningful it would be, but certainly towards a low end of that activity…

Thank you, Raj for the question. So, my vision for Tessera is it’s enabling IP company and I think if you look at what we're doing in the imaging and optics and how existing it's getting here. Outside they are cooling and even MicroPILR does are all exciting non-litigation oriented activities and so that’s, that’s where we aspire to be Qualcomm like technology innovator and to minimize litigation and only to do it when absolutely necessary to protect our ethics. So, though we can't control future events, it would be and our liking if we can get through this ITC situation and then take a look at our legal strategies and find that we didn’t have massive ongoing legal efforts in our future. But it’s really speculation in our my, at this point in time, because we just don’t know what the outcome of the ITC is going to be. And then the only other thought I would leave you with is that pursuing cases in state courts systems are much, much, much expensive than these very complex undertakings of the ITC. Raj Seth - Cowen & Company: Alright. Thank you for that.

Your next question comes from the line of Bennett Notman with Davenport & Company. Bennett Notman - Davenport & Company: Just wondering. Given the cash infusion after the Amkor decisions on this we might see you guy reinvigorate the, repurchase activity or said something to set aside for now or how we should think about that?

Yes, I would say that it's highly unlikely that we would use the money to buyback our shares. We think that we are in a enviable position of having this balance sheet and the fact that we have no debt we have a lot of alternatives. (inaudible) certainly just very minor transaction. So, I wouldn’t want to overplay it but it's a good example of what's happening in the marketplace. I think as a company, year or two ago ahead good prospects, great venture backers etcetera, and because of the calling ad in the new standards for investment, follow on financing wasn’t available, and as a result we are the major beneficiaries of that outcome. And so, we are looking continuously and carefully and as the downturn in the technology industry in general and semiconductor industries specifically has moved on the level of opportunities that we are seeing and evaluating are quite intriguing, not that we have anything imminent in mind. And so, we would take money, we intend to, and we have been very consistent on this since our industry and we intend to invest that money into business. Bennett Notman – Davenport and Company.: Okay. Thank you.

Your next question comes from the line of Michael Cowen with MDC Financial Research.

Thank you for taking my call. I intended all the public portions of the wireless hearing in July, and last to in Washington. So, I had a lot of interest there. I was wondering you dropped the 649 investigation against sub-contractors. I was just wondering if you could talk a little bit about the possibility of the general exclusion order you will be able to issue in the wireless investigation that could give you leverage against licenses against those sub-contractors?

Yes, Michel there is a publicly available documents available on the ITC website where the staff of the ITC has taken their position on the wireless case and in there is, they are quite clear that they believe that the ITC has the power and authority they issue a GEO, General Exclusion Order as well as a tailored General Exclusion Order. And ultimately they recommended that to the ITC commissioners that they issue a tailored General Exclusion Order on behalf of Tessera. So I will direct you to that document. I certainly from my point of view I totally agree with the ITC staff and what they recommended to the commissioners.

Okay. And my follow on is on January 5th you issued a press release where Motorola Extended their option agreement with you, and instead that the extension went through mid February but than it was April 16 when you announced that they extended it again. What happened in between mid February and April 16, how did that go out with April?

Well, in the original agreement we signed with Motorola. We all had a certain basic knowledge of the ITC process. And so we try to take into account all the potential probations that might occur and it appears that most of those probations did occur and as a result Motorola continues to exercise various options they had on the agreement. So that’s that last option in April was driven by the delay of the case at the ITC to May 20th. That happened that payment may not have occurred.

Okay. That clarified the mystery. Thanks.

You’re welcome.

There are no further questions at this time. Mr. Nothhaft, do you have any closing remarks.

No. Thank you very much for interest in Tessera. We look forward to having a repeat at this exercise in about 90 days.

And this concludes today's first quarter 2009 earnings call. You may now disconnect.