John T. Kurtzweil, Senior Vice President and Chief Financial Officer David D. French, President and Chief Executive Officer

Jay Srivatsa, Roth Capital Partners Deepak Sitaraman, SG Cowen Nimal Vallipuram, Benchmark Company Alex Kim, Thomas Weisel Partners Tore Svanberg, Piper Jaffray Vanessa Jacobs, Needham & Company Don Rode, S Squared Technology

Ladies and gentleman thank you for standing by. Welcome to the Cirrus Logic Third Quarter Fiscal Year 2006 Financial Results Conference Call. At this time all participants are in the listen only mode. Later we will open the call for your questions. Instructions for doing also be provided at that time. As a reminder this conference call is being recorded for replay at this stage. I will now turn the conference call over to Mr. John Kurtzweil, Senior Vice President and Chief Financial Officer. Mr. Kurtzweil, you may begin. John T. Kurtzweil, Senior Vice President and Chief Financial Officer: Thank you and good afternoon. Joining me at today’s call is David French, Cirrus Logics President and Chief Executive Officer. Before we began I would like remind you that during the course of this conference call we will make projections and other forward-looking statements regarding among other things, our estimates for the fourth quarter fiscal year 2006 revenues, gross margin level, combined R&D and SG&A expenses, inventory level and operating cash as well as the expectations, estimates and assumptions regarding our future revenue growth and profitability. We keep in mind that these statements are projections that re subject to risks and uncertainties that may cause actual results to differ materially. For providing this information wee undertake no obligations to update or revise any projections or forward-looking statements, for there is a result of new development or otherwise. Please refer to our press release issued today which is available on our website at www.cirrus.com. Our latest Form 10-K for the year ended March 26, 2005 as well as our other filings made with Securities and Exchange Commission for additional discussion of risk factors that could cause actual results to differ materially from our current expectations. I want to mention before we proceed that all financial numbers are, unless noted, in accordance with Generally Accepted Accounting Principles. In addition, during our call, we will be providing certain non-GAAP financial numbers, including our core analog, mixed signal, and embedded products revenue and gross margin numbers and certain R&D and SG&A expenses. A reconciliation of GAAP to non-GAAP is included in the financial statements and issued with the financial release published today, as well as on our website in the investors section at www.cirrus.com. Non-GAAP results are not meant as a substitute for GAAP, but are included solely for informational and comparative purposes. We believe the non-GAAP financial information is useful to investors because it enhances the understanding of the results and trends of our business. We also use non-GAAP reporting internally to evaluate and manage our operations. As the result, our criteria for determining non-GAAP results may differ from other company’s methods. These non-GAAP measures should be considered in addition to and not as a substitute for the results prepared in accordance with GAAP. Now I will turn the call over to David French. David D. French, President and Chief Executive Officer: Thank you John and thanks to all of you who are joining us today. First, I’d like to recap the results for the quarter as noted in our press release, which ended December 24. Total revenue was $48.3 million, gross margin was 55.1%, operating expenses were $21.2 million and net income was $12.8 million. I’d like to summarize the key highlights from the third fiscal quarter of 2006. And first and foremost, I have to say, I’m pleased to report that our high precision, analog mixed signal, and embedded products demonstrated healthy year-over-year revenue growth of 18%. This resulted in a GAAP income of $0.15 per diluted share. We continue to hold our inventory levels flat, resulting in inventory turns still greater than 5 and we have further increased our cash and marketable securities by $8 million, now up to $233 million. Also, I would like to provide investors who track our ongoing business activities with non-GAAP Q3 results. This is generally done by the analysts covering Cirrus Logic and contributing to First Call. And when calculated on a non-GAAP basis, the company would have produced a net income per share of $0.09 based on 88.1 million diluted shares. This non-GAAP result compares favorably with the current First Call mean estimate of $0.08 net income per share. The non-GAAP number, which John will go through in more detail, excludes a one-time foreign tax benefit of $5.3 million and that’s the only difference between our GAAP and our non-GAAP numbers. Any how during this call I will provide more details regarding our business operations and John will now review our financial results for the December quarter in more detail. John T. Kurtzweil, Senior Vice President and Chief Financial Officer: Thank you, David. Our net sales in the December quarter were 48.3 million compared with 44 million in the December quarter one year ago. Of that 44 million, the revenue associated with our analog, mixed signal, and embedded products was 40.9 million. Therefore, the revenue associated with our current product lines has increased 18% year-over-year. Our sales by product lines were as follows. Mixed signal audio products contributed 25.5 million in the December quarter representing 16% year-over-year growth. Embedded products were 13.9 million in the December quarter representing 26% year-over-year growth. Industrial products provided 8.8 million in the December quarter representing 12% year-over-year growth. Historical revenue breakdowns for these product lines may be found on our website in the Investors section. We had no OEM customers representing more than 10% of sales and one distributor, Avnet, contributing 26% of sales. Gross margin for the December quarter was 55.1% compared with the GAAP 53.2% and the non-GAAP 55.4% gross margin in the September quarter. As shown in the GAAP to non-GAAP reconciliation on our website, the difference between the GAAP and non-GAAP gross margin was due to the low gross margin sales of the digital video product line, which had a gross margin of approximately 5% as we liquidated the remainder of the inventory in that product line Combined R&D and SG&A expenses were 21.2 million in the December quarter compared with 26.4 million in the prior quarter. The prior quarter included video product line-related spending of approximately 1.7 million as well as a 3.3 million contingency charge related to excess leased office space. Without these one-time items, combined R&D and SG&A would have been 21.4 million in the September quarter. Interest income for the third fiscal quarter was 2.1 million; net income also included a 5.3 million foreign tax benefit. Net income in the third fiscal quarter was 12.8 million. In the prior quarter, the company reported a net loss of $99,000. As you may recall, the September quarter included the final expenses associated with the sale of the digital video product assets. Now, I will review the reconciliation of our GAAP income of 12.8 million to our non-GAAP earnings of 7.6 million or $0.09 per diluted share based on 88.1 million diluted shares. As mentioned earlier, we use non-GAAP financial numbers because we believe that this information assists us in the management of our business and provides more transparency, consistency and completeness to help understand our underlying results and business trends. As provided on our website, we arrived at our non-GAAP EPS of $0.09 per diluted share by excluding a 5.3 million foreign tax benefit from our GAAP statement of operations. Our employee headcount at the end of December was 425, compared with 410 at the close of the September quarter reflecting increases within our engineering, product development, and sales force during the quarter Now, on to the balance sheet. Total cash and marketable securities at the end of December increased to 233 million from 225.1 million at the end of September. Our cash per diluted share increased by $0.09 and ended at $2.64 per diluted share. We ended the December quarter with 21.4 million in net receivables compared with 21.6 million at the end of the September quarter. DSOs or DSO were 40 days compared with 39 days in the September quarter. Inventory at the close of December was 17 million, which was flat with the September quarter. Net inventory turns were 5.1 in December. Our capital expenditures were $800,000 in the December quarter compared with $188,000 in the September quarter. Depreciation and amortization expense totaled $1.8 million compared with $2.1 million in the September quarter. Now back to David who will discuss our ongoing business operations and our guidance for the upcoming quarter. David D. French, President and Chief Executive Officer: Thank you, John. First I would like to mention just two weeks we got the company return from our annual international consumer electronics show in Las Vegas. We have numerous meetings with key customers that we anticipate, we’ll continue to lead the strong and ongoing relationships and I will turn to new design wins. Our customer’s interest in Cirrus projects new product offering is reflective of our position as the leading supplier of integrated circuits into audio industrial markets based on our core, analog and mixed signal technology strings. Now I’ll focus on our ongoing operations this past quarter beginning with the mixed signal audio product group. This product group contributed $25.5 million of our December quarter revenue representing 16% year-over-year growth. Semiconductor components in this product area including data converters and interface devices are used in a wide array of consumer, professional and automotive audio applications. I’m pleased with the revenue growth of these products this quarter driven by exciting application areas such as digital televisions, home theater systems and more and more self-portable media players. Additionally this quarter we saw a wide array of new design wins in the DTV or Digital Television Market with encouraging sales of products such as audio converters and S/PDIF digital audio interface devices. The recent revitalization of our low-power portable product offering has generated considerable customer activity, including multiple design wins for several models of MP3 players with companies such as iRiver and Calhoun. Our time to revenue generation from this product line seems to be faster than other mixed signal audio products and we expect to further expand our product offerings within the low-power portable IC market during this year. Based on these factors we believe this area has a strong growth opportunity in calendar year 2006 and beyond. We will continue to drive long-term revenue opportunity as we continue to introduce new mixed signal audio products throughout the calendar year. We have considerable analog and mixed signal engineering expertise applied across a broad mix of developments and our commitment to innovation will fuel our future growth in these markets. Focused demand creation or design win activity is also showing good results with well over 100 design wins in a vast array of consumer and professional audio applications reported last quarter for this product group alone. Let me turn now to our analog industrial products. This product line includes integrated circuits designed into a variety of data acquisitions, power metering and energy exploration applications. These products generate our highest gross margins and contributed $8.8 million of our December quarter revenue, which is a 12% year-over-year growth from the December quarter last year. I’m particularly encouraged by the revenue generated by our growing line of power measurement or power metering integrated circuits where we are engaged with several leading customers worldwide. We achieved multiple new design wins with our customers, particularly in India and China, such as Alimer and Shenzhen Technology. We anticipate that further global expansion of power measurement integrated circuits will likely augment the long-term stability and revenue growth opportunities of our overall industrial product line. In addition, the market for our seismic products is steady and continues to show good opportunity for revenue gains over the medium to long-term. As I’ve said before, our revenue is not directly tied in this area to the current rise in energy prices. But nonetheless we believe there is a significant opportunity for growth in revenue in this area during fiscal year 2007. Overall, industrial products met our earlier expectations for revenue growth this quarter and in upcoming quarters we’ll focus on launching several new power measurement and data acquisition products, which leverage our high-precision analog and mixed-signal expertise to drive future growth opportunities. With our industry-leading industrial technology expertise and our focus on new product development, we remain optimistic about our longer-term growth prospects within industrial markets. Finally, I’d like to comment on our embedded product line, which represented $13.9 million of our December quarter sales. This is up from $11.1 million in the December quarter a year earlier, representing growth of 26% year-over-year. Products within this category include our audio digital signal processors, our general-purpose ARM-based microcontrollers for industrial and other applications, and networked audio components. Overall, embedded product revenue was somewhat better than expected with continued strong results with our digital audio products and digital signal processors in particular in applications such as digital televisions and home theatre systems. Within the area of digital televisions, we secured several new design wins with Sharp and Sanyo and customers such as Hitachi are currently in production with several digital television models already using Cirrus Logic audio digital signal processors. Within our networked audio products, we introduced DSP Conductor, which is a new graphical software tool designed to accelerate and simplify our customers’ programming of CobraNet networked audio processors. CobraNet technology continues to be the de facto standard for networked audio applications. And over the course of this year, we believe we will see several leading OEMs adopt CobraNet integrated circuits within a wide variety of networked audio or media applications. For instance, this quarter we announced an agreement with Gibson Guitar to apply our engineering skills and CobraNet technology to jointly develop products for next generation gigabit Ethernet-based networked music applications. Before I discuss our guidance, I’d like to reemphasize how pleased I am that the company has begun to deliver good cash flow and profitable year-over-year growth. We remain committed to our 20% operating profit model. We achieved 18% year-over-year growth within our analog and mixed-signal and embedded products during the December quarter. The underlying fundamentals of our business are strong and we expect them to continue to strengthen during fiscal year 2007. As we look to the fourth fiscal quarter, the current quarter, we’re forecasting continuing strong year-over-year growth. However, it’s important to remember that like many other companies, the March quarter is traditionally our seasonally weakest quarter, particularly for our products that are oriented towards consumer applications. On this basis, our forecast for fourth quarter is somewhat cautious. Our guidance for 4Q fiscal year 2006, which ends on March 25, 2006, is as follows. Revenue is expected to range between $41 million and $45 million, which represents a year-over-year growth in the analog, mixed-signal and embedded products between 12% and 22%. Gross margin is anticipated to be between 55% and 57%. Combined R&D and SG&A expenses are expected to range between $20 million and $22 million, and we expect cash to further increase by $3 million to $5 million. We also anticipate that inventory will go up $2 million to $3 million during the quarter in preparation for seasonally expected growth in the first fiscal quarter of 2007 or the June quarter. To recap, I’m pleased with our financial results in third quarter fiscal ‘06. We achieved 18% year-over-year revenue growth within our analog, mixed-signal and embedded products and generated a non-GAAP net income of $7.6 million and a non-GAAP EPS of $0.09. With the company focused around high-precision analog, mixed-signal and embedded products, we’re a fundamentally stronger organization. We continue to invest heavily in new products, which we think will strengthen our position and capitalize on many new market opportunities. Our balance sheet and our cash position are very strong and growing stronger. And I’m optimistic regarding our improved prospects for year-over-year revenue and operating profit growth. And now we are ready for your questions. Operator?

Thank you. Ladies and gentleman at this time we will begin the question and answer session. If you have a question please press the “*” followed by the “1” on your touchtone phone. If you would like to quit on from the following process please press the “*” followed by the “2”. You will hear a beep tone prompt acknowledging your selection in and your questions will be pulled in order they receive. If you are using speaker equipment you will need to lift the handset before pressing the numbers. One moment please for the first question. Our first question comes from Jay Srivatsa with Roth Capital Partners. Q - Jay Srivatsa: Yeah, hi, good afternoon. Nice job on beating the street numbers for both top line and the bottom line. A - David French: Thank you. Q - Jay Srivatsa: Couple of questions, if I may, let me start with the gross margins, I know it is within the guidance, can you speak a little bit about why it was down sequentially? A - David French: Well, the consumer, well, it is pretty much flat sequentially, it might have been down 20 basis points sequentially which I don’t look at as a big move. But, as I mentioned previously, the consumer product portfolio last quarter, well, the September quarter and also in the December quarter is the higher percentage of totals sales than it is in other quarters. And in particular, in the second half of calendar ‘05, we worked very aggressively to maintain market share in audio D to A converters in some high volume, thought to be low-priced applications, particularly DVD players. We were successful in maintaining market share, in fact, in some cases we might have grown market share. The impact there was that it subdued our opportunity to grow our gross margins at the anticipated rate. So, we did not expand gross margins during the quarter. That is, so the consumer exceeded revenue expectations and our success in holding market share index, which I think is overall a good thing, delayed some of the increases in gross margin than I expected, really started to show up here in the March quarter, all things being equal. In addition, the seismic business has not grown yet. So, that, the pretty substantial gross margin impact of a mix shift towards seismic, which is quite likely to occur during calendar year 2006, has not at all occurred through the December quarter. So that’s still out there as a gain for us. Q - Jay Srivatsa: Okay. Well, maybe we can speak to that a little bit. As you look ahead into the March quarter, the industrial business and specifically the seismic business, is there any seasonality impact there or is the seasonality restricted to the consumer part of the business? A - David French: Typically we don’t, we’re not able to identify a calendar seasonality norm for the industrial business. I think that particularly for seismic, that doesn’t seem to link up with calendar at all. So, it has more to do with big deployments, both land-based and more particularly marine-based, which tends to be even chunkier, so to speak. And we had some deployments that were scheduled to go out in September and December, which got delayed into the calendar year 2006. One in particular looks like it could happen in the March quarter, more likely in our anticipation right now it is going to be in the June quarter. We’ve had a little bit of push out on some fronts in that area. We do see that there is a tremendous amount of interest and we have such a high market share, I don’t think it’s a question of us losing business to anybody, it’s a question of when are they going to take the product. So, we actually got our relatively good or relatively strong revenue performance in the second half of the calendar year with really no help at all from the seismic area. Q - Jay Srivatsa: Okay. Last question on the inventory, you had mentioned you expect increases in preparation for the fiscal ‘07, could you try to crystallize it for us as to where we could expect the inventory buildup, is it in the mobile space as you get into it or is it in the DTV space or is it more in the AV receiver space that you are participating in currently? A - David French: It’s a pretty detailed inventory analysis, you know, we have about 600 products and several thousand customers, so it’s kind of sketchy to assess in terms of trying to provide visibility here. However, the areas you point out DTVs, mobile and home theater, it’s likely that none of those areas will show any inventory increase because if anything it will probably be, have a hard time keeping it with customer demand, at least based on current outlook. In the industrial area, where lead times tend to be long and gross margins tend to be high, we have actually decided to increase inventory a little bit based on the broad strength we are seeing in that area. We are seeing US industrial markets which are distribution-oriented, European markets, both showing good signs of broad strength, which is pretty important to us. We also see a broad increase in demand across our mixed-signal audio product line and without being able to pinpoint which customers are going to be successful since there are many different versions of our customer products that they build, our plan is to build inventory a little bit at the die level across a wide array of products. Q - Jay Srivatsa: Okay thank you, next quarter. A - David French: Thank you very much.

Thank you. Our next question comes from Shawn Slayton with SG Cowen. Please go ahead with your question. Q - Deepak Sitaraman: Dave, John, good afternoon, this is Deepak Sitaraman for Shawn. A - David French: Hi, Deepak. Q - Deepak Sitaraman: Just following up on gross margin again and looking forward towards your 60% gross margin target, Dave, where do you see most of the opportunities? Is it wafer pricing, or plain vanilla cost reductions? Can you give us some color there? A - David French: Yes, there is a little bit of everything. We have talked about a lot of it. I mean, there is mix as seismic comes into play, it’s going to have a lifting effect on gross margins. We have got a little bit of wafer price reduction that will improve our performance on the gross margin line. We have got a significant cost reduction at the die level on our audio deck line, the two biggest running audio D/A converters, there’s a two-channel version and six-channel version, which gets sold in DVD players and a wide array of other applications, which we upgraded or updated during the third calendar quarter. We converted the majority of the customers over on the two-channel device during the December quarter. The cost reduction on that product type is dramatic. And the cost on the new product offering is probably a third lower than it was on the previous version. We did not convert a substantial amount of the six-channel customer base over during the December quarter as it was the heat of their building season and they weren’t really interested in making the move. That will happen this year. That in its own right will have a pretty substantial effect on gross margins for the whole company. Plus the new products that we are bringing out, many of them show the opportunity of coming out with higher gross margins than some of the older product offerings. Q - Deepak Sitaraman: Okay, great. And also, Dave, just looking at the industrial segment, can you help us understand the competitive landscape there and sort of who, who else you are seeing out there? A - David French: Yes, industrial market is highly fragmented. There are some big cap companies that sell very successfully way out in front of us, in most cases the analog devices of the world probably; they are probably one of the stronger ones. Interestingly, our product line is, like most companies and offering in that space is pretty niche. Areas where we have a technological advantage, we often times have no direct competitors since there is really not any competitive offering to a first approximation for the kinds of products we offer from any company. So while we are not only sole-source, we are in a no-compete kind of environment in many cases and a lot of that has to do with driving the level of precision we do at the price points we hit based on low-cost CMOS technology. To put things in perspective, much of that product line is built using one micron CMOS technology and older technology nodes, just to put it in perspective. Those wafers are inexpensive, so its design is highly unique. The products selling to customers, they were relatively small volumes. So it’s a, we don’t really see a lot of competition directly. As we get into the seismic applications, there is really not any direct competitor. If you look at, there is one custom solution that sells through Sercel which has some share, but on the merchant market there is not a lot of people who even try to tackle the technology demands of that class of applications. And in power meters, there is a bunch of competition. There is a quite a few companies that have been selling out their analog devices, I think TI has got an offering, couple of others. We think we have got pretty good share in India, we have got pretty good share in China. We have better share in three phase meters than we do in single phase meters. So, our new offering in single phase meters looks like it’s going to be a real winner and we expect to get pretty good share there during ‘07 and ‘08, sorry, ‘06 and ‘07 on a calendar basis. Q - Deepak Sitaraman: Okay. That’s helpful. Thank you. Just one last question and then I’ll go away. Dave, can you remind us of typical seasonality for the first fiscal quarter? A - David French: First fiscal quarter, would be, meaning the June quarter? Q - Deepak Sitaraman: June, right. A - David French: Yes. The March quarter we guided down a bit seasonally and one can argue it’s kind of conservative, but, and it’s a wide range, but we don’t really know what the interpretation of retailers are going to be once everybody gets back from New Year and, Lunar New Year I mean and studies the retail inventory posture. And however, we’ve seen good Christmases and bad Christmases, tend to generate significant impact on the March quarter, but the June quarter is almost always a very significant sequential up quarter regardless of what March does, and I’ve seen 10% to 20% sequentially in June be pretty much the norm. Q - Deepak Sitaraman: Okay great, thanks guys. Good luck. A - David French: Thank you.

Thank you. Our next question comes from Nimal Vallipuram with Benchmark Company. Please go ahead with your question. Q - Nimal Vallipuram: Yes. First of all, let me congratulate you on a good quarter as well. Just couple of questions here. First one is that when you look at your first calendar quarter, the guidance of mid-point down about 10% or so from fourth quarter. Can you put that into perspective? I do understand that Cirrus has gone through a number of divestitures here, so it would be somewhat difficult, but still taking every, of that into consideration, can you let us know what that 10% means? Is it better than, less than, or is it normal seasonality you would expect with your product portfolio? A - David French: Off of, September we came out a little bit ahead of what we had thought going into the quarter. December, we came out a little bit ahead of what we thought going into the quarter. I’m starting to get convinced that it was a reasonable Christmas season for our caliber of products, though I think all the counting is not done with that in retail and what not, so, I’m still a little bit concerned. All the data points that we’ve historically seen and that we currently see suggest that 10% down sequentially for March for overall mix is on the conservative side, generally by a couple of points. In particular, this year with bookings coming out of December pretty strong, particularly in the second half of the quarter and bookings at the beginning of this quarter through January looking particularly strong, you could argue it’s pretty conservative view to take relative to all those data points, and that notwithstanding, Lunar New Year is a little bit early this year. So, we expect starting next week the bookings should slow down from the pretty good pace we’ve seen since Christmas, and the time between there and the Father’s Day, graduation, type season for mid-to-upper level audio products selling through in retail, is a little longer than usual. So, it could be that we go into a couple-week period where bookings are a little bit slower. That notwithstanding, I would expect that if things are as good as many people say, that there is some opportunity for us to do a little bit better. Q - Nimal Vallipuram: Yes, just two follow-up questions. Number one on that, I know that you are somewhat reluctant to give some sort of a timeframe on the success and the revenue generation of the two new product families, the products in the DTV as well as low-power product family. If you can just give us some idea subjectively how that’s going to play out, maybe on a longer-term basis this year or next year for Cirrus Logic? A - David French: Well, in low power, we don’t guide by applications, so you’re right about that. But in low power there is really only one other supplier with meaningful skill in analog components for audio applications and low power portable devices, that’s Wolfson who are a very fine company. But seeing as how there is only one other competitor we got a pretty good chance of taking some significant market share. I think the overall market is already somewhere between $50 million and $100 million annually, probably significantly closer to $100 million annually. I think our offering, the level of response we’ve got to our offering just based on the simplification, removal of the streets, lower system costs, lower unit cost based on our price quotes and the simplicity of design with the ground-centered output is very, very strong. I expect we have a good a pretty good shot at winning 20% to 30% of that market within a one to two year period, which is up from basically zero dollars in calendar year 2005. So, do the arithmetic on that. Most research analysts suggest that portable audio semiconductors are the fastest growing segment in audio semiconductors. Most the reports I see suggest that it’s growing at 30% to 40% per year. I think it is a little bit slower, but well in excess of 20% per year. On the digital television, the market for audio semiconductors and TVs is a couple hundred million dollars a year, up until this calendar year and in analog architectures overall; we experienced zero success historically in that class of application. In digital televisions, we are going to get, in calendar ‘05, we got a couple of million dollars worth of revenue, we’re not going to be a dominant supplier because there are so many people going after that space, including historical kingpin of analog TV audio solutions, which is Micronas, but also other companies like AKM, Wolfson, ADI, probably the biggest ones, will have some competition. I think we have got an opportunity to get 20% or 30% of that market and over the next three to five years it’s going to convert from predominantly analog architectures to predominantly digital architectures as well most of the $200 million opportunity in that space converts from an area where we had zero market share to an area where we’ve got an opportunity to get 20% or 30% market share. I expect very exciting opportunities to emerge in DTVs for Cirrus Logic. Q - Nimal Vallipuram: Thanks Dave, just a final question. On the distribution side with Avnet being such a large direct customer of yours, from your point of view are you comfortable with the kind of inventory they’re carrying, the distribution partners? A - David French: Well, I’d like to point out, Avnet is a point of sale accounting customer. In other words, we only take revenue after they ship it out. So, everything they do have is not yet recognized as revenue. So, I want to make sure that’s clear. That being said, actually in some areas, I wish the inventory were a little bit higher. Overall, they’re at about the right level in my opinion and we work very closely with their product management people to try to make sure that that’s the case. That’s a pretty diversified product portfolio. So, it is always a bit complicated to anticipate which customers are going to buy what at what point in time. But certainly speaking there, we are at about the right mix. I would probably like to see it go up a little bit during the March quarter. Q - Nimal Vallipuram: Thanks Dave again. Again congratulations on a great quarter. A - David French: Thanks, Nimal.

Thank you. Our next question comes from Jason Pflaum with Thomas Weisel Partners. Please go ahead with your question. Q - Alex Kim: Good afternoon guys, this is Alex Kim calling for Jason. A - David French: Hi Alex. Q - Alex Kim: Hi. Just a question on your cautious guidance. I noted that you had iterated that your guidance was cautious. I am just trying to understand the hinge factors that could sway the quarter one way or the other? A - David French: Yes. There is a lot of things that could sway to the positive direction. There is predominantly good news. I mean, bookings levels are pretty good. December bookings were better than we expected. All the trends look pretty positive. That being said, Lunar New Year is this weekend and we usually expect the week after that to get pretty close to zero new orders for Asia. And we’re wondering if that happened that is not a big issue. If we had two weeks of close to zero orders after Lunar New Year, as people sort out what retailers really want to do in North America and elsewhere, then that would start causing me to be, to lean more towards my, the lower end of what we were thinking. Q - Alex Kim: Okay, got you. And just a question on margins again. I know that your target long-term is 60%. Do you think we could see 60% gross margins? I’m trying to work out my model here. Can we see 60% in calendar year ‘06? Is that possible? A - David French: Yes, it is possible. A lot of opportunities have cropped up for us over the course of past three to four months as we’ve gotten more and more focused on the analog side of things. I still think 60% gross margin is the right target for the company. I have prioritized higher than that, the 20% operating model. And I see a lot more opportunities around the globe for revenue pops in the 50% to 55% range that, you know, all things considered might slow our migration towards 60%, but could dramatically enhance our move to 20% operating profit and beyond. And I’ve directed the people to go after those and I don’t know the impact of that yet, but I like the way it feels right now. The level of success, the demand creation processes and systems that we have got in place appear to be stimulating a tremendous amount of activity. Net-net, if that generates a more substantial growth rate and a slower expansion in our gross margin rates, our ability to get to and beyond the 20% operating profit model might be even stronger. And so, I don’t know if 60% will happen this year, but I do still think you ought to be thinking that that is possible, anyway. Q - Alex Kim: Okay, perfect thanks guys. A - David French: Thank you.

Thank you. Our next question comes from Tore Svanberg with Piper Jaffray. Please go ahead with your question. Q - Tore Svanberg: Yes. Good afternoon. Just to trail a little bit again on the guidance, I know qualitatively you talked about what could go right, what could go wrong. Could you put any numbers around the bookings quarter-to-date versus quarter-to-date last quarter, just trying to get some granularity on how conservative you are being? A - David French: Yes, I can give qualitative input; I don’t know whether I got anything that’s quantitative. But, our bookings quarter-to-date are certainly better than we would have guessed. Our bookings in this month of December were certainly better than I would have naturally guessed. So, if you look that and we came into the quarter with inventories having been held pretty lean in the December quarter, we actually came into the quarter, this quarter with a couple of million dollars of leftover backlog, product that our customers were requesting for shipment in December that we just couldn’t turn in time. So, and that’s unusual for the December quarter. So, we got a little bit better coverage there to the level of a couple of million dollars. So that being said, we might have a couple of million dollars worth of advantage over what you might otherwise expect in terms of our preparedness to meet or exceed our guidance. And other than that, it kind of depends how things look the week or two after Lunar New Year. Q - Tore Svanberg: Okay. So I guess what you are saying is maybe two weeks after Lunar New Year you would have a pretty good idea how things are going to play out and shake out? A - David French: That is a pretty fair bet of that, of course, that being said, at that point, you never know, you don’t know. So… Q - Tore Svanberg: Sure. A - David French: I do expect that the next couple of weeks would be kind of telling for us. Q - Tore Svanberg: Okay. Very good. And I know you talked about the industrial business and sort of how it did near term and things like that, but just looking longer term, are there any other areas the company is focus on now? I’m just thinking new projects in R&D that you are committing now that may generate some returns 24 months from now? A - David French: Yes. When you look at high voltage industrial products, you look at some of the amplifier products, we’re working on industrial and in the audio arena, we’re going into some new areas. Still we have got some new measurement devices, catalog products coming out of the industrial product design group, which are pretty interesting. The first innovations, that we came out within that area for a number of years and I think that those are going to open up some meaningful new opportunities for us as well. And in addition to that, we’ve got in networked media processing systems; whether they would be in home or professional applications, deploy a lot of audio components, both analog and digital signal processing devices. Our CobraNet industrial networked audio technology as the industry standard we’re seeing some interest in taking that down to consumer price points. There is a lot of issues, when you start thinking about hooking up home media processing systems, you got echo PROMs, you have got latency PROMs, and all those things. We are the world’s experts in solving those problems. And there are, we have historically sold into million dollar price points and we have brought it down to quarter million dollar price points, we now sell into installations that are under $100,000. We start getting down to $10 to $20,000 installation costs with $10 to $15 worth of content from Cirrus Logic. We started hitting in some real interesting consumer price points that could offer pretty dramatic upside for us over the two to four-year horizon as well. Q - Tore Svanberg: Okay. And I know in the past we’ve talked about automotive being a longer-term opportunity as well and I assume now with the infotainment part of the car really taking off, are you starting to see an acceleration in designs or do you think we are still quite far away to see some meaningful revenues there? A - David French: Well, we have meaningful revenue there. I pointed out that as a norm if you average any few quarters together, it runs probably 10% of our overall revenue of the automotive space, both being the biggest customers and some of these satellite applications being as a group probably next biggest chunk and probably another half-a-dozen customers we sell into there. 2005, calendar 2005 was kind of a slow year for us in automotive. I think it was a little bit down year-on-year. And that was maybe an issue of some of the timing of the deployments that our customers have and what not. 2006 looks like it could be a little bit of an up year and there are some chances that our big customers there could have a much more successful 2006, calendar 2006 with our products, which could drive meaningful growth. But it is really hard to predict whether 2006 will be a big growth year or not. It doesn’t look like it’s going to go down meaningfully. And in 2007 some of the new products we brought out about three years ago in that space, looks like they’re going to start generating meaningful revenue in calendar 2007. Q - Tore Svanberg: Great. And just finally, can you just comment a little bit on pricing overall, obviously, the end markets look healthy, your bookings have been looking good, you have had some expedites, how is the whole pricing environment looking for you at this point? A - David French: Well, we always have discussions about pricing. Generally speaking, everything we do is proprietary, there might be one or two exceptions with very, very low revenues at the legacy product line, but basically everything we do is proprietary. Having said that we like to make sure our customers are highly successful. So, we work cost reductions, we work pricing evolutions when we introduce new products for the five-year horizon, which represents maybe a third or quarter of the product’s life. We don’t try to plan five years out, but, so we try to offer orderly price declines in high-volume applications for big customers. We don’t have the same kind of price pressures. We, when we decide to be aggressive on pricing it is because we’re thinking about it, and we’re thinking out strategically why that makes sense. So, for instance second half calendar 2005 we were extremely aggressive in audio D to A converters and DVD players particularly in China. And we, I wouldn’t use the word bombed prices, but we were very, very aggressive. And the reason we were very aggressive is because we wanted to make sure people understood we were serious about that market. We held market share, we took a little bit of a downside in margin and it’s still good business, it kept us from expanding gross margins, but all things considered that business, people are going to think twice before they get aggressive about going after that business because we have the lowest cost, and there is a lot of things we can do there. But other than that, we try to think out two or three years and work with like Sony on PlayStation 2, we anticipated price plans over the number of years, we offered them to maintain 100% share on PlayStation 2. That sort of thing we will continue to do for the high-volume applications. Today, we are thinking the same way about digital television and we will plan out our price reductions there and I think we’ve got a good opportunity to pursue pretty exciting applications at model margins. Q - Tore Svanberg: Okay thank you very much. A - David French: Thanks Tore.

Thank you. Our next question comes from Vanessa Jacobs with Needham & Company. Please go ahead with your question. Q - Vanessa Jacobs: Hi, guys. Can you talk a little bit about, I’m not sure how you can, if you can quantify this or not, but revenue contributions from low-power audio CODECs and also DVD related revenue, what that’s doing quarter-over-quarter into the March quarter? A - David French: Yeah, we don’t break out specifics by applications, for one reason that it’s really hard to tell because our customers use the same products in a lot of different applications. But the low power in particular just started generating a little bit of revenue in the fourth calendar quarter. It wasn’t really noticeable; it was well under a million dollars in the fourth calendar quarter. So, that really starts shipping in earnest in March and June this year. DVD related revenues, quarter-on-quarter; again we don’t forecast by segment, we don’t even report by applications. It is our guess or estimate that DVD related revenues in the December quarter were somewhere between 5% and 10% of sales in total for the company. I would expect it would be down sequentially in March, particularly after Lunar New Year, we think we’ve seen continuing revenue there in December and first part of January a little bit, but it could be half of that in the March quarter? I don’t really know. We don’t really track it all that closely. Q - Vanessa Jacobs: Okay thanks. A - David French: Thanks.

Thank you. Ladies and gentleman if you have any additional questions please press the “*” followed by the e”1” at this time. As a reminder if you are using speaker eequipment you will need to lift the handset before pressing the numbers. One moment please. Our first question comes from Nimal Vallipura. Please4 go ahead with your question. Q - Nimal Vallipuram: Yes. Thanks. I think this question is for John. John, I know that your tax rate is very low for the time being. Can you give us some sort of a guidance as to what we should be modeling for the next 12 months or so on the tax rate? A - John Kurtzweil: For the, tax rate for the next year and for the balance of this year and FY ‘07, I would use less than $100,000 a quarter to zero. We have some NOLs that are out there that we plan on using. Q - Nimal Vallipuram: Alright thanks guys. A - John Kurtzweil: Okay.

Thank you. Our next question comes from Don Rode with S Squared Technology. Please go ahead with your question. Q - Don Rode: Thanks, hi, Dave. A - David French: Hi, Don. Q - Don Rode: Just a quick question on the cash cycles in the business. I know you’re going to grow the inventory slightly in the March quarter, still going to be able to generate a couple of million dollars in cash. As you move forward this year, are there any incremental things that you might be able to do to improve the cash cycle, I’m not criticizing where they were, just for planning purposes, should it kind of match the operating income plus, and then just add back depreciation or how, if you are thinking about modeling, then what factors would go into it, the difference in operating income? Thanks. A - David French: Yes. Generally speaking, if you think about it at rational growth rates of say anything less than 25% growth, it is reasonable to expect the cash cycle to resemble the operating profits, sorry the earnings’ numbers. And the depreciation benefit is not, we don’t really have a lot of capital, capital tend to run less than depreciation, but there tend to be some cash effects that are off the P&L in old leases that we already have accrued and things like that that are still a cash drain that don’t show up in the P&L. So those are probably offsetting the difference between depreciation and CapEx. Q - Don Rode: Okay. And so that is, if you look for that number, let’s say it is 3 million or so is your best, well, it’s your guidance or whatever that, I won’t ask about that anymore. But then you go to the June timeframe you’re talking about typical seasonality is plus 10% or 20%, so of course that is significant change in that cash generation ability as well, so that gets back up more towards the level we generated this past quarter, so you go 233 you’re getting close to 250 million or so by end of fiscal year, is that somewhere even close to correct? A - David French: Probably conservative. When you look at September, it is even better. It is likely we’ll want to expand inventories a little bit during June, too. Q - Don Rode: Okay. A - David French: And June is a little bit back-end loaded almost always and it gives you a really a strong quarter. So receivables are likely to go up meaningfully in June. Q - Don Rode: But then, generally more in September? A - David French: Even more in September. And then December is usually very good and we did 15% year-over-year last quarter. We are guiding middle this range between 15% and 20% year-over-year this quarter; start extrapolating that and you start looking at some pretty big cash numbers. Q - Don Rode: Yeah, okay. Alright thanks. A - David French: Okay, thanks Don.

Thank you. And Mr. French there are no further questions at this time. You may continue. David D. French, President and Chief Executive Officer: Thank you operator and again thank you all for your time today and your questions, and there is lot earnings calls going on out there today. We will said so we can see many of you at number of upcoming conferences just to name a few, Thomas Weisel Partners Technological Conference, February 8th in San Francisco, we will be there, Deutsche Bank Small Cap Growth Conference February 16th in Miami I think it is, Roth Capital Growth Conference February 21, down there San Diego, Piper Jaffrey Internet and Technology China Conference as we are spending lot of time in China these days, February 28th in Beijing, the Prudential Tech March 2 in Chicago, and another one CIBC World Market Third Annual Semiconductor Submit, March 15 in Vail Colorado. Look forward to see you there and, elsewhere. Thank you very much for time with us today, and have a good day. Bye.

Thank you. Ladies and gentleman this concludes the Cirrus Logics Third Quarter Fiscal Year 2006 Financial Results Conference Call. You may now disconnect and have a good night.