Adam Parker, Sanford Bernstein Glen Yeung, Citigroup Cody Acree, Stifel Nicolaus James Covello, Goldman Sachs Michael Masdea, Credit Suisse Ambrish Srivastava, Harris Nesbitt Chris Danely, JP Morgan Tom Thornhill, UBS David Wu, Global Crown Capital John Lau, Jefferies and Company Mark Edelstone, Morgan Stanley Charlie Glavin, Needham & Company Tim Luke, Lehman Brothers Allan Mishan, CIBC World Markets Chris Caso, FBR Michael McConnell, Pacific Crest Securities Tristan Gerra, Robert Baird Jim Schneider, Wedbush Morgan Securities Joseph Osha, Merrill Lynch Sumit Dhanda, Banc of America Securities

Operator's Instructions: Ron Slaymaker, Vice President, Investor Relations: Good afternoon and thank you for joining our first quarter earnings conference call. Kevin March, TI’s Chief Financial Officer is with me today. For any of you who missed the release you can find it on our website at ti.com/ir. This call is being broadcast live over the web and can be accessed through TI's website. A replay will be available through the web. This call will include forward-looking statements that involve risk factors that could cause TI's results to differ materially from management's current expectations. We encourage you to review the safe harbor statement contained in the earnings release published today as well as TI's most recent SEC filings for a complete description. Our mid-quarter update to our outlook is scheduled this quarter for June 8th. We expect to narrow or adjust the revenue and earnings guidance ranges as appropriate with this update. We will observe a quiet period beginning on June 1st until the update. In today's call, I'll review our highlights of revenue performance, and then Kevin will discuss profit performance and the second quarter outlook. We will keep our remarks short, saving time for us to respond to your questions. In this call all of our financial results will be described for continuing operations, including historical comparisons unless otherwise indicated. The Sensors and Controls business is reported as a discontinued operation, and we expect the sale of this business to close in the current quarter. To facilitate your modeling, we had included the historical information for the continuing operations by quarter for the year 2005 and by year through 2003 on our website. The first quarter TI revenue of $3.33 billion was about even with the fourth quarter and grew 23% from a year ago. This was in the upper part of our range of expectations. Semiconductor revenue was about even sequentially and was up 24% from a year ago. This was the third consecutive quarter of accelerated year-on-year growth for semiconductor. Educational and productivity solutions revenue grew 11% sequentially due to higher demand for scientific calculators and declined 10% from a year ago as instructional dealers shipped purchases closer to the second and third quarter on demand. Driving the semiconductor results was strong demand for DSP and analog. DSP revenue grew 4% sequentially due to demand for communications infrastructure products, including high density, Voice over IP and wireless base station products. Communications infrastructure revenue increased almost 50% sequentially and more than doubled from a year ago. Communications infrastructure is an area in which TI has been laying the groundwork for several years in terms of product development and design engagements. We are pleased to see these investments starting to generate significant returns. From a year ago, total DSP revenue increased 32% driven by demand in wireless. Analog revenue was even sequentially and increased 24% from a year ago due to high performance analog. The year-on-year comparison in total analog was negatively impacted by about 5 percentage points due to the divestiture of the commodity LCD driver product line in the first quarter of 2005. This LCD revenue was $39 million in the year ago quarter. High performance analog revenue increased 6% sequentially and increased 43% from a year ago. Turning to wireless, our results in the first quarter only further encourage us regarding this growth opportunity. Revenue from wireless products in the first quarter was even with the fourth quarter. Usually we would expect this revenue to seasonally decline in the first quarter. Revenue from wireless products grew 32% from a year ago. 3G cell phones continue to be a growing part of our wireless story, and our revenue here doubled from the year-ago quarter. This includes strong growth contributions from both OMAP applications processors as well as WCDMA modems. In fact, cumulative revenue from OMAP shipments into 3G handsets exceeds $1 billion. Finally, in DLP products, revenue declined seasonally 17% from the fourth quarter, consistent with our expectation in January. Revenue grew 29% from a year ago, reflecting growth in the markets that we are addressing, TI's market share gains, and the lack of excess inventory pressure this year. At this point I'll ask Kevin to review profitability and our outlook. Kevin March, Senior Vice President, Chief Financial Officer: Thanks, Ron, and good afternoon everyone. As Ron indicated, this is our first quarter reporting the Sensors and Controls segment as a discontinued operation. The benefit to the Company's gross margin is immediately evident. We are now a Company with gross margin above 50%, up 180 basis points from what we reported 90 days ago, when Sensors and Controls were still part of TI's continuing operations. TI's first quarter gross profit from continuing operations was $1.67 billion. Continuing operations posted a 30 basis points sequential gross margin increase in the quarter, not insignificant, considering that it was generated on flat revenue and in the face of seasonal pay and benefit increases. Although depreciation declined by $66 million sequentially, since depreciation is an inventoriable cost, only about a-third of the depreciation benefit moved through the income statement in the first quarter. The second quarter will see the full benefit of the lower depreciation level. Operating expenses increased by $57 million sequentially, reflecting a combination of seasonally higher pay and benefits, and increased product development, particularly in wireless and high performance analog as well as higher marketing expenses. TI's operating profit for the quarter was $718 million, or 21.5% of revenue. This includes stock-based compensation expense of $91 million, or 2.7% of revenue. Income from continuing operations was $542 million, or $0.33 per share. It might help if I summarize the first quarter earnings per share transition from the $0.38 from our continuing operations produced in the fourth quarter. EPS was reduced by about $0.02 due to higher operating expense in the quarter and by $1.03 due to a higher tax rate. I'll leave most of the cash flow and balance sheet items for you to review in the release. Let me just make a few comments. Cash flow from operations was $522 million in the quarter, and we ended the quarter with $3.66 billion in total cash. TI used $1.44 billion of cash during the quarter to repurchase 47 million shares of TI common stock. We also used $177 million of cash for our acquisition of Chipcon to help further boost our product portfolio and capabilities in high performance analog. Inventory of $1.25 billion at the end of the first quarter increased $61 million from the less than desired level of the fourth quarter. Days of inventory at the end of the first quarter were 67, up three days sequentially, and four days lower than a year ago. TI's orders in the first quarter were $3.60 billion, an increase of 3% sequentially. We continued to build backlog in the quarter with a semiconductor book-to-bill ratio at 1.05, the same as in the fourth quarter. Turning to our outlook for the second quarter, we currently expect total TI revenue from continuing operations to be in the range of 3.46 billion to 3.75 billion. Semiconductor revenue should be in the range of 3.29 billion to 3.56 billion, and educational and productivity solutions should be in the range of 170 to 190 million as retailers begin to stock calculators for the back-to-school period. Earnings per share from continuing operations are expected to be in the range of $0.38 to $0.43 in the second quarter. This estimate includes about $0.04 of stock-based compensation expense, or about $90 million. In summary, we're off to a good start this year. Demand was strong in the first quarter and we expect it to continue. We saw year-on-year growth in our established areas of strength, such as wireless, cell phone and high performance analog products. In addition, we saw some promising new areas such as communication infrastructure start to produce results. We believe the combination of TI's position in DSP and analog, and the inherent growth in the communications, entertainment electronics markets that these products address is unbeatable. As a result, TI should be able to continue to grow revenue and earnings at levels that will be above that of our semiconductor peer group in the years ahead. With that, let me turn it back to Ron. Ron Slaymaker, Vice President, Investor Relations: Thanks, Kevin. At this time, I'll ask the operator to open the lines up for your questions. In order to provide as many of you as possible an opportunity to ask your questions please limit yourself to a single question. After our response we will provide you an opportunity for an additional follow-up. Operator?

Q - Adam Parker: Can you guys talk at all about lead times and your inventory and distribution and that sort of balance? How much have things changed during the quarter, I know you were going to build some distribution inventory on the mid-quarter update, but maybe how much did you build, do you expect that to continue to build in the second quarter, and where are we with lead times, please? A - Ron Slaymaker: Sure Adam, I will take a stab at it. First of all in lead times, I would describe lead times overall as generally stable with where we were 90 days ago. So, and as we've noted before, that is consistent with our goals. We are trying to move through the cycle with stable lead times and lead times that are short enough so that they remain within our customer's ability to plan. That way their ordering behavior stays well disciplined. In terms of distribution inventory, as we do with our own inventory, we were able to build some inventory in the distribution channels during the first quarter. And you'll recall that back at the end of fourth quarter, we were saying that those levels of inventory had moved to what we would say is historically and undesirably low levels and that in fact, it was our goal to build inventory. So we were able to build some inventory. At the same time I'll also say that distributor resale, or the sell-out of distribution, was strong in the quarter as well. So we had strong distribution environment in general, but at the same time we were able to build some inventory. I would characterize the inventory levels as, if you recall last quarter, or in January, we were describing fourth quarter turns as a little over seven. They moved down to a little below seven in the first quarter level. Q - Adam Parker: And in terms of the delinquencies, are those from the backend last year, are those resolved at this point or are you still trying to catch up to those? A - Kevin March: Adam, I'll go ahead and comment on that. On the delinquencies on the back end, we actually saw, if you take a look at our inventory growth, it was about $61 million on a quarter-over-quarter basis, and about three-quarters of that growth was in finished goods. And that's really the result of the backend clearing up and being able to repopulate our finished goods inventories so we can maintain those lead times that Ron was talking about a moment ago. We still probably have some pockets of areas that we'd like to see further improvement on but if I were to characterize it in general, I'd say we made good progress on clearing up some of the inventory shortage problems that we've been experiencing in the last couple of quarters. Q - Adam Parker: Okay. A- Ron Slaymaker: Thank you Adam. Let's move on to our next caller, please.

Thank you, your next question is from Mr. Glen Yeung with Citigroup. Please go ahead. Q - Glen Yeung: Thanks, good quarter. Just to follow up on the last question, can you give us any sense as to what you think inventories will do in the second quarter? A - Kevin March: Yes, Glen, I think if you take a look at where we've got our inventories at today, and whether we were able to bring distributor inventories to, as Ron mentioned a moment ago. As we look out into the future, we would expect our inventory growth now to begin tracking much more consistently with our anticipated revenue growth. We don't feel the need to increase our overall revenue levels at the same level that we've had the last couple of quarters. So we are just tracking our future revenue expectations. A- Ron Slaymaker: So generally we've moved out of the hole on inventory. And I would say that applies to distribution as well. Generally we would expect going forward that distributor inventory trends should probably start to track more so with resell growth trends than, again, coming out of the hole that we had to come out of from the end of the year. Q - Glen Yeung: If you look at your inventories, and I think I'm characterizing this correctly, they're lower than they were in '04 but your revenues are actually higher than they were in '04 when you strip out the Sensors and Controls business. So when you think about the impact that Sensors and Controls had on managing inventory, how should we think about the future of inventories relative to – are they generally higher or generally lower than the year before? A - Kevin March: I think if you take a look at the nature of Sensors and Controls business, how it worked from a profitability standpoint, it operated at gross profits of around mid-30s, for example, and so consequently you have more dollars in inventory on a relative basis, and so that would make your days look like they might be a little bit higher. I would just point out that the base that we've computed for you are on an apples-to-apples basis. So in other words, we're at 67 days right now in our continuing operations. On an apples-to-apples basis that's up three days from last quarter. That's down four days from a year ago quarter. Q - Glen Yeung: That's actually very helpful. And just one last one, could you remind us what we should expect to see for DLP next quarter and just seasonally as we move throughout the course of the year? A- Ron Slaymaker: Glen, we don't specifically break out our guidance in terms of various product areas so I won't be able to be that specific. I think if you – and I'll be honest, Glen. We don't have enough history with DLP in the various spaces, specifically television market, to fully understand what the seasonal trends would be. I think the television market in general, if you just look at TV sales and what those customers do, they tend to trend down in first quarter, and then second quarter tends also it could be low just due to them clearing out models in expectation of new model introductions in the second half of the year. But at the same time, I'll also tell you, TVs represent 25% of our DLP revenue. The projector market, which is 70% of that revenue is going to have a different seasonal profile, both of which tend to be seasonally weak in first quarter, but as to the remainder quarters of the year I don't have a lot of specific numbers for you, Glen. Q - Glen Yeung: Okay, thanks a lot. A- Ron Slaymaker: Thank you. Let's move to the next caller, please.

Your next question is coming from Cody Acree with Stifel Nicolaus. Please go ahead. Q - Cody Acree: Thanks. Congrats guys on a good quarters. Going back to the inventory just a bit, you talked about the DSP inventories. Ron, do you have any comments on what's going on in the OEM channel? A- Ron Slaymaker: To our knowledge, Cody, OEM inventories are generally clean. We think things are in good shape overall. We're not aware of inventory excesses. Certainly those customers where we have direct visibility, such as big handset OEMs, where we're on just in time or hub-type programs, we know inventory is clean. At the same time, we'll have to say outside of those customers we certainly have less direct visibility into their inventory, but we're not aware of any excesses that are out there. Q - Cody Acree: Any quantification on the first quarter impact of that, whatever that bill that happened in the DSP channel, maybe in some of the OEMs, on revenue? A- Ron Slaymaker: I'm sorry, I don't understand what you're -- Q - Cody Acree: You got a little bit of a benefit from shipping more into the channel than went out. Do you have any idea what the kind of net impact on the first quarter revenue would have been? A- Ron Slaymaker: Yeah, I don't have that quantified. And frankly, if you look at the benefit associated with inventory build in the current quarter, you also have to look at the corresponding impact of inventory correction that was going on in any comparison period, and I'll remind you that in every quarter of 2005, we saw inventory reduction taking place in distribution. Q - Cody Acree: Okay great. And if I may, with the change in the depreciation schedule, greater percentage of foundries, higher analog, higher DLP, maybe Kevin, you can comment on this, what's a structural gross margin target we should be looking at, or at least maybe a fully utilized structural gross margin peak to look at? A - Kevin March: Well Cody, I think we just closed the quarter at about 50.1% gross margin at the Company level. And we still got a bit more headroom in front of us if you take a look at what's happened. Of course, we've sold the Sensors and Controls; we're in the process of selling the Sensors and Controls business. That gives us 150 basis points lift over what you historically saw. The total lift we'll get on depreciation, both from the change and just the natural roll off that we experience anyway from older equipment, should give us about another 250 basis points. And then as I mentioned in my opening remarks, we saw less than a third of that lift occur in the first quarter, so we'll see the rest of that occur in the fourth quarter. Just because depreciation has to go through inventory first before it finally makes its way to the income statement. And then beyond that we continue to have open capacity in various areas. Incremental revenue can fall through at a fairly good rate, so there is some additional lift inside that, now we just caution, there's a little bit of offset on that. In 2005 we began stock option expensing, and they only expensed during the second half of the year. This year expense for the full year and so that will be a little bit of drag on some of that, but overall we should begin to see several points of lift in our operating results as we progress through the year. Q - Cody Acree: Great, thanks guys. A- Ron Slaymaker: Thank you, Cody. Next caller.

Thank you, your next question is coming from Jim Covello with Goldman Sachs. Q - James Covello: Good afternoon. Thanks so much, question on the handset side. Given the better than expected seasonal trends in calendar Q1, how do you expect seasonality to play out in handset, or your handset business for the rest of the year? A- Ron Slaymaker: Jim, I don't know that -- I think it's probably too early to tell whether there's any take-away from -- or message in general that we take from first quarter as it applies to the future quarters. So we're generally approaching the rest of the year as if it would be a relatively normal year in terms of seasonal trends but time will tell on that one. Q - James Covello: Okay, terrific. And then I apologize for going back one more time on the inventory question, but if we're down four days year-over-year, up a couple days quarter over quarter, this time last year we had too much. This time last quarter we had too little. So this is about right, you would expect the days to remain constant from here? Is that kind of the idea? A - Kevin March: I wouldn't use days necessarily as gauge, but again we'll build -- what you will see us doing going forward is building our inventory consistent with outlook for revenue change in the future so that may go up or down depending upon our outlook for the following quarter revenues. I would also add with our gross margins increase, and I believe we're up about 4 points on a year-over-year basis, that also allows us to financially carry less inventory to support similar levels of revenue. A- Ron Slaymaker: I think it's fair to say the inventory level that we finished first quarter is at a level that we're comfortable to support our expected demand from customers in second quarter. And where we take in the second quarter or third quarter will depend upon what we see in the following quarter from there. Q - James Covello: Terrific, thank you so much. A- Ron Slaymaker: Thank you, Jim. Next caller please.

Thank you, your next question is coming from Michael Masdea with Credit Suisse. Q - Michael Masdea: Thanks a lot. I think the biggest surprise to me was your 2Q guidance, and especially when we look at kind of a flattish order environment for semis and you are kind of plus 5% revenue guidance for semis. Help us understand what's going on, gives that you kind of comfort, especially if we have a situation in 1Q where you had potentially, not overshipped but shipped in to build a little inventory into the distribution channel? A- Ron Slaymaker: Jim, I think if you just look at, start by looking at what drove the demand strength in first quarter. I'll just move through a couple of areas. First of all, look at handsets. Both ends of the handset market, starting with 3G, our revenue being up 2X from year-ago levels. Generally we, I think a lot of the analysts that cover that space, Michael, expect that 3G handset units will double this year. And, it's not that we're coming off of the small base, I mean again, we have more than $1 billion worth of 3G revenue last year. Another area that I will mention for strength is the low end of the market. That is driving a lot of subscriber growth in areas like China, India, Brazil, Russia, some of these more emerging markets. The 2.5G chipset that we sell into that space, if you look at year-on-year growth, that was up almost 50%. Communications infrastructure we talked about. Wireless base stations, VoIP type of products where revenue more than doubled. High performance analog with revenue up 43%. This is strength in a lot of different diverse areas that, frankly, we think its carry forward into second quarter. And if you look at our backlog expansion, you see our backlog expanded in first quarter, very consistent with the revenue guidance that we're giving for second quarter. So this isn't hoping for demand to come, these are orders that we have on the books going into the quarter. Q - Michael Masdea: Okay, I guess the other question as we're getting to this green lead-free Euro stuff. Is there any impact that you're seeing on the supply chain or any kind of impact on order mentality? A - Kevin March: Hey Michael, we've been working the whole lead-free conversion now for probably 18 months, and have been making very good progress on it. I believe the cutover date, I think is this July if I recall. We are not seeing any indications just yet, or there's any kind of problem on that conversion with our customers or with our ability to support the conversion. We're carrying a careful mix, we've changed our part number nomenclature so that we can separate out what's going on. We've got it separated in our inventory billings and so on, so it seems to be going quite smoothly from our view. Q - Michael Masdea: Great, thanks a lot. A- Ron Slaymaker: Thank you, Michael. Next caller please.

And your next question is coming from Ambrish Srivastava with Harris Nesbitt. Please go ahead. Q - Ambrish Srivastava: Hi, thanks. Just a question on capacity. I know last couple of quarters you guys have been adding incremental capacity on the back end. Are we done with that? Do you feel that you have enough capacity to support demand? And then I have a follow-up, Ron. A - Kevin March: Yeah, Amrish, on the capacity, we actually spent, I believe it was about $408 million in capital expenditures in the fourth quarter, and that was really, the backend, a large part of that was backend equipment that we ordered in the fourth quarter and spent in the first quarter. Excuse me, I think I said first quarter. So we were able to put a lot of backend capacity in place. This is about we're continuing to invest in our leaving the topographies are 90 and are 65 and 45 nanometer nodes. I would say to you that we're feeling like our ability to clear our backend delinquencies has improved substantially. There are still pockets of areas that we'd like to feel better about, but compared to where we've been the last couple of quarters, I would say that in general, most of that is now behind us, and we'll just to have work these smaller pocket areas going forward. Q - Ambrish Srivastava: Okay. A- Ron Slaymaker: Follow-up, Ambrish? Q - Ambrish Srivastava: Yeah, and thanks for the explanation, because the last couple of quarters, we had a lot of explaining to do both on the stock – on your commentary and the results. Follow-up was on the emerging handset side, you guys seem to have a disproportionately higher share versus your competitors. What's your sense of how big the low-end handsets would be this year versus last year as a percent of your total wireless sales? Thanks. A- Ron Slaymaker: Ambrish, I don't have that forecast for you, but what I would just point out is if you look at our customers in that space, listen to them, customers like Nokia, Motorola tend to talk very bullish about the growth and their growth prospects in that marketplace. And what I would say is, as they continue to succeed in that market, we will tend to do well, as well. So again, I don't have a specific number in terms of percent of revenue mix that we would expect but we expect good things out of that market space. Q - Ambrish Srivastava: Is the single chip shipping in volume now, Ron? A- Ron Slaymaker: It's not shipping in volume, but what I would say is look for handsets to be on the market in the second half of this year, so it's coming very soon. Q - Ambrish Srivastava: Okay, thank you. A- Ron Slaymaker: Thank you, Ambrish. Next caller, please.

Thank you, your next question is coming from Mr. Chris Danely with JP Morgan. Please go ahead. Q - Christopher Danely: Thanks guys. Just two quick clarifications. Kevin, when you add up all the levers on the gross margins, is it safe to say you think they can get to the mid-fifties by the end of the year? A - Kevin March: Chris, I'm not going to be so bold as to spell out particular number. I do think there's couple of points of more headroom inside that. Just as we see the depreciation and sell-through as Ron and I mentioned, and incremental revenue just giving us a bit more headroom too. But not to overlook the fact, again we have to do stock option expensing for the whole year so that will put a little bit of a lid on that. Q - Christopher Danely: Yeah, I guess I was talking about without the options expensing. And then as a follow-up on the lead times, now that you guys have those under control, is it your intent to bring them in or I guess just keep them where they are? A - Kevin March: I think our lead times are where we want them. They're stable, and as I said before, they're well within our customers' window for planning. So I would say we're happy with where the lead times are currently. Q - Christopher Danely: Okay. Thanks guys. A- Ron Slaymaker: Thank you, Chris. Next caller, please.

Thank you, your next question is coming from Tom Thornhill with UBS, please go ahead. Q - Tom Thornhill: Yes, can we follow-up a little bit more on the low-end of the DRP product, how much of the mix do you expect to see that in the second half of the year, and what is the margin impact relative to your wireless margins as they exist today? A - Ron Slaymaker: Tom, I don't, first on the margin part, I don't know that you would see a shift in wireless margins one way or the other as a result of us rolling out that particular product. I think its, it will be a contributor to revenue. It will allow us to further strengthen our position in the low-price market, both in terms of serving those customers as well as potentially new opportunities for customer engagements that come along because of that product. And profitability is good. So I'll just leave it at that. In terms of how quickly the market will transition over to it? I would say, the expectation would be that it will ramp pretty quickly, and customers that are currently on less integrated versions of that product will tend to roll over pretty quickly because, there are just tremendous power consumption advantages, form factor advantages, as well as cost advantages to those customers. So that segment of the market, the handset market, as you're well aware is highly competitive currently, and no customer wants to leave anything on the table in terms of potential profitability that they might be able to extract and our product is a good way for them to achieve their goals. Do you have a follow-on Tom? Q - Tom Thornhill: I do. So you're confirming the DRP product should be operating and gross margin neutral? And one follow-up. A - Ron Slaymaker: Let me just correct that. What I'm saying is I don't think you will see a significant change in our overall wireless profitability. I didn't make any specific comment about that specific product, so I will leave it at that. Go ahead. Q - Tom Thornhill: The DRP technology, when should we expect to see the technology applied to higher end handsets? A - Ron Slaymaker: It certainly our intention to move that technology all up and down the product line. So, for example, and I'm not going to put a time line on it, but you can very well expect that in the case of 3G, WCDMA handsets we will have caught more value-oriented handsets to allow 3G to have further reach into the market over the course of time, using our DRP technology. So step one, as you've seen us already, OMAP box which integrates the application processor with the base band, but we will take that also to a full single chip integration over time using our DRP technology. Q - Tom Thornhill: Thank you. A - Ron Slaymaker: Okay. Thank you, Tom. Next caller, please.

Your next question is coming from David Wu with Global Crown Capital. Please go ahead. Q - David Wu: Yes. Can you talk a little bit about the infrastructure side of the house based on just the base band and voice over IP. As I recall, Ron, those are fairly small product categories. And maybe you could comment about your overall profitability of the old broadband business that's now part of the DSP group? A - Ron Slaymaker: Thank you, David. I'll take the first one, and I'll let Kevin take the second one. You've heard us talk about them, you know, for example, the base station revenue, just the wireless base station, not the VoIP infrastructure, we've said it's run about 5% or so of our wireless business, but that wireless business has grown pretty significantly over the course of time. So, what I would say is that communications infrastructure runs on an annual basis run rate of several hundred million dollars annualized. So it's not such a small business, especially for one that's at least first quarter trend, doubled year on year. So I would say it's a big business that's growing very fast, or an intermediate size business, anyway. Kevin? A - Kevin March: Yeah, David. On the broadband business, as you have painfully remained me, that was not a very attractive financial picture for a few years there, and we did take some action to go ahead and try to improve upon the financial results that operation could deliver to the company, and we refocused it, just a reminder to everybody, on what we characterized as the residential gateway side of the technology application there. That's really where we can marry together our DSL and wireless LAN technologies into a single solution for a customer, or we can marry together our cable and VoIP technologies into a single solution for a customer. We have reorganized. We've gained a lot of traction in that area. I won't characterize the actual profitability results but I will tell you as we have been pleasantly surprised that it's progressed in a positive fashion more rapidly than we expected. A - Ron Slaymaker: Okay David, thank you for your questions. Lets move to the next caller.

Thank you, your next question is coming from John Lau with Jefferies and Company. Please go ahead. Q - John Lau: Hi, Ron. A - Ron Slaymaker: Hi John Lau. Q - John Lau: How are you? I know there were a lot of intense interest and focus on the inventory. But I wanted to get your comments. As we lack at the inventory trends over the past 10 to 15 years the channel is getting leaner with hub and supply chain management The semiconductor companies like TI, the inventory has moved from like maybe the mid 50s to almost 68, 70 days. Is that the new level of responsible inventory longer term that we should be looking at for TI? A - Kevin March: John, I'll go ahead and try answering that, then Ron can add some color if he's got some ideas that I missed on this. I think that generally speaking, the evidence of the last few years would support that thesis that you just put out there, and that is the staging of inventory is moving more into the semiconductor companies, especially diversified companies such as TI where we carry many different kinds of products. I think the other thing that makes TI a little bit different from just a broad statement like, is that we are changing the nature of our product portfolio, as you know, where we're expanding our high performance analog portfolio much more rapidly than we have in the past. And the nature of that market historically and still today has been that generally you have many, many customers who order relatively small quantities. They tend not to inventory the product themselves, and so they expect you to have that inventory on hand. So that's a second factor in the case of TI that you will see kind of driving up our overall inventory levels over time versus what you might have seen 10 or 15 years ago. A - Ron Slaymaker: And I would just add, John, I think we welcome the change because it enables a much more responsive supply chain, that as in demand changes, instead of having lots of buckets for inventory to build up, having more of it concentrated at the source of the manufacturer allows us to, and the entire supply chain to be much more responsive to that customer demand. So we think it's a good trend change. Do you have a follow-up John? Q - John Lau: Yes, I did. There was a previous question with regards to ASP trends and I don't recall your response to that. A - Ron Slaymaker: I don't recall the question so I might have missed it. In general I would say most areas ASP do the normal trend that they always do. Usually that's a question on the pricing applies to commodity. What I would say is our commodity pricing moved up a little bit. First quarter compared to fourth quarter. You know, in general I wouldn't set expectations that you will see a lot of revenue trending because of price changes in that market. You will recall if you go back 2004, we didn't like the financial results that our commodity business was generating. We took action to address pricing in areas especially that were below our profit model for that business. And generally we have it to the point, that business to the point where it's contributing at profit levels that we think are appropriate for that business. So, and specifically averaging up the Company's financials. So, again, revenue growth from here I would say will generally tend to track with the unit volume as opposed to further price adjustments. Thank you, John. Lets move on to the next caller.

Your next question is coming from Mark Edelstone with Morgan Stanley. Please go ahead. Q - Mark Edelstone: Thanks a lot guys. Nice quarter. Kevin, I had a question on gross margins in the semiconductor business, from a high level the gross margin percentage there is fairly flat quarter to quarter despite the decline in depreciation and what I would think would be a relatively higher utilization rate overall given all the issues we've kind of talked about before. So can you talk about the mix or the issues that caused that to be the case and did not actually get slightly better gross margin percentage even on the flat revenues, which I certainly recognize. A - Kevin March: Yeah, Mark. What you've really got going on there is from fourth quarter to first quarter is pay and benefits increases. On an annual basis, we go through all of our pay and benefits reassessment as in the first quarter when we apply the changes to those programs and generally those changes as specifically where it generally increases. And that's what we've experienced since we've come from 4Q into 1Q and of course that is a potential job of offsetting the depreciation movement if you look it and then proceed from there. Also recall the depreciation lift that we got in first quarter was probably on the order of less than a third of the total depreciation decline that we saw quarter-over-quarter. So depreciation was down about $66 million for the company quarter-over-quarter. A little less than a third of actually has made its way to the P&L so far, so the rest of that will come through starting in the second quarter. Q - Mark Edelstone: Right understood. Just two clarifications there. The first one is, the increase in the pay and benefits, is that a couple of points then, that we're looking at the kind of hits Q1 and then sort of normalizes as we go through the rest of the year? A - Kevin March: Mark, it's a little bit more complex now because in the fourth quarter you have two big vacation periods in the form of Thanksgiving and Christmas. And so you have people taking vacations that will reduce your total payroll cost during the quarter, and then you have a little bit of a boomerang effect in the first quarter where you don't have the vacations, plus you have the pay and benefits increases. So it's a little harder to get to an answer that you're trying to get to. I think that the depreciation and pay and benefits increases were pretty close to neutralizing each other coming through this quarter and we'll start seeing the depreciation really giving us the lift going forward. Q - Mark Edelstone: The follow-up there then is if you look at Q2 for the semiconductor business or the company, well I guess actually just specifically on semiconductors and if we exclude the impact from the depreciation benefit that you're going to get, is there an opportunity here to still see gross margins improve either through better fixed cost absorption or through mix, and if so, are we talking about a minor improvement, or is it something that could be fairly substantive over the second quarter? A - Kevin March: I think that we could probably anticipate, again, we don't break out forecasts at that level, but conceptually speaking, I think we'll see the continued kind of step function increases that we've seen for quite a few quarters in a row. And that is at HPA and DLP and so on become a bigger portion of the mix, they tend to average that up, and to the point that you made, Mark, on just absorbing any of the capacity, that falls through fairly nicely. So those sort of things will continue to increment us up. The pace of increment I won't comment on that now I think -- A - Ron Slaymaker: Hey Mark, one thing I want to circle back on, you made -- in your opening comment, you made a comment about higher utilization being an assumption. Our utilization increased what I would just characterize as just very slightly, first quarter compared to fourth quarter, and even though inventory built, and you'll notice amongst the inventory mix, a lot of what happened was, what was with in the fourth quarter as we removed assembly test bottlenecks moved in to finished goods in the first quarter, but just in terms of utilization, wafer starts, etc., there wasn't a significant change from the fourth quarter level. Okay, Mark. Thank you. And let's move to the next caller.

Thank you, your next question is coming from Charlie Glavin with Needham & Company. Please go ahead. Q - Charlie Glavin: Thanks. Kevin, just an observation. I think from the time you guys bought the analog business, the amount of inventory held by the OEM is in two channels come down from I think it's 87% down to 62. So given the fact that your days are below 70 seems to be a pretty big positive. But two questions on that. One is a point of clarification. Will you be holding more width going forward as a percentage of the total, and second of all, just in terms of the clarification, as far as the amount of depreciation as far as the pass-through as it goes through the P&L, at one point I thought you said it would all hit in Q2. I think you just said it would start to hit in Q2. If we're going to still hold to the 1.03 depreciation, then the stuff on your website doesn't really go back far enough to do a full depreciation scale, taking up the sensors business, so could you give a little more clarification also in terms of how the pace or the pattern of depreciation will be for the remainder of the year. A - Kevin March: Okay Charlie, I am going to try to remember those two questions and I hope I will get a answer to you. I believe your first part was, do you expect whip levels to change in the future or be consistent with what we're seeing right now. And unfortunately I'm going to give you probably -- somewhat unsatisfying answer, and that is those levels will be consist -- there will be a function really of what we expect a following period or following quarter's revenues might be. In periods when we expect wireless to perhaps or other leading edge products to be ramping up in revenue, because of the manufacturing cycle time there, you can expect with those as a percentage of our total will probably increase a bit, in periods where you expect that to come down, we might see a bit of compression on that, so there's going to be a little seasonality based upon our revenue outlook, on what those as a percent of our total will wind up being over time. On the depreciation pattern, sorry if I confused you on my earlier remarks, let me try to be a little clearer. Of the 66 million that we saw in depreciation decline from the fourth quarter to first, all that depreciation has to pass through inventory first, then as we sell the inventory, it passes on to the income statement. So because we're carrying about 67 days of inventory, you can figure from that that’s probably somewhere around 30% or so of our inventory that absorbed depreciation reduction in the first quarter actually made it on to the income statement. The remainder, that Delta of the 67 will be a benefit in the second quarter. That's would I was trying to clarify there. And then as we look out through the balance of the year, what the pattern of our depreciation will look like, in order to hit that $1.03 billion depreciation number that we have identified as what we think our annual depreciation will be, you can expect that our quarterly depreciation will decline fairly slowly over each of the quarters of 2006, and a reason goes back again to the capital expenditures we made in 2000, especially in 2001. Recall that was a big capital expenditure year for us. We spent about 1.8 billion that year. And the equipment depreciates over a five-year period, so that equipment that was spent back then will continue to roll off on depreciation as we go through this year, so you'll see depreciation tail down relatively gently through the year, so that we expect about a 1.03 billion depreciation for the year. Q - Charlie Glavin: Kevin, just, if I could, if you could add on to the website a little more detail as far as going back, so those of us who have a full depreciation scale are going back in time, there's not quite enough difference to make up the delta, it's just enough to kind of give a bit of a swing, by 10, 20 million. So if you could add a little more detail on that website that would be great. The question I wanted to ask in terms of the whip is, the more that you guys have gone into the analog and including some of your wireless chips, a little bit more frangibility in terms of a whip unit going into anywhere from two to six different peer skews. The real question was, are you seeing that more going forward, or have you kind of reached a bit of a limit? A - Kevin March: Okay, I think I understand your point, Charlie. You're exactly right. The same – there are several different product packages, and so that’s why we bank inventory today than what we ever did historically and we will continue to probably see that phenomenon increase in the future rather than decrease as we produce more package alternatives for given that configuration. Q - Charlie Glavin: Okay. Thanks guys. A - Ron Slaymaker: Thank you Charlie, meet you in the next call.

And your next question is coming from Tim Luke with Lehman Brothers, please go ahead. Q - Tim Luke: Thanks. Congratulations on the quarter. Ron, I was wondering, as a percentage of your wireless mix, how is OMAP like it just develop as you move through the year? Should it remain fairly similar, or should it move to a greater percentage of the mix going forward? Thanks. A - Ron Slaymaker: Tim, I don't know that I have a specific forecast there. You're going to see probably more diversity in terms of the 3G handset market. And what I mean by that is, you know, if you look over the last couple of years, 3G has been at the very high end, and therefore a very high percentage of those handsets used a discrete or application processor, fortunately for us most of those being OMAP. As to 3G market grows, you will have it move into -- even though 3G by definition is a higher end segment of the market you will have more value oriented handsets that likely will not have a standalone application processor. And so because of the -- I think you'll see from our OMAP revenue trend will be growth, but as a percentage of the total, I'm not sure I want to try to forecast that specifically. Did you have follow-on, Tim? Q - Tim Luke: Actually, I was just wondering if you could provide any incremental color on the time lines associated with the ramp of 65 and generally of 45 as well, any updates that would be helpful. A - Ron Slaymaker: 65, we are continuing to ramp it. Let me back up if I can, first of all to 90 nanometer. Q - Tim Luke: Yeah. A - Ron Slaymaker: I think we said at the end of the year that we had shipped something like 150 million units in 90 nanometer. That number is now in excess of 230 million units at the end of first quarter. So that will give you a feel for what that ramp looks like in that one quarter. We increased our team volume by 50%. So we're in the very steep part of the ramp on 90 nanometer. 65 nanometer you recall we said in fourth quarter that we had qualified that process and were ramping into it production. That, in fact, is the case. But I would describe that in 2006, 90 nanometer is probably our workhorse but at the same time you will see 65 continue to ramp. 45 nanometer, as we noted in the release, that was significant part of our CapEx is going even today for 45 nanometer process equipment. I would characterize that as process development. R&D type work, et cetera, as opposed to any full production line that we're putting in place at 45 at this point. Q - Tim Luke: Just to follow-up on an earlier question did you give -- you talked about lead times being where you want them. Did you quantify that at all? A - Ron Slaymaker: No, because it will really vary based upon products. And some of the areas like high performance analog where we had dye banks in place, so we're willing to put in place more inventory there in order to keep lead times short. On custom products, you know, we'll tend to run lead times a little bit longer because -- for a specific customer sought, it will vary based upon product as well as process technology. Thank you Tim, Next caller, please.

Thank you and your next question is coming from Allan Mishan with CIBC World Markets. Please go ahead. Q - Allan Mishan: Hey guys. Sort of left field question. Can you tell us what your Bluetooth shipments did this quarter and what you think your market share is at this point? A - Ron Slaymaker: Allan, I don't have Bluetooth unit numbers, and I'm trying to recall the Bluetooth revenue. I think our – in general, if you look at our -- what we call connectivity, which is probably dominated by Bluetooth but it also includes Wi-Fi, I would describe that revenue as, oh, sequentially even with fourth quarter level, but up over more than double from a year ago. So you probably had some season effect fourth to first, but again we're on the kind of growth trend that we expect for that product line. Q - Allan Mishan: Okay. And if I could look also into the com infrastructure trends that you talked about, within Voice over IP was that, gate ways, or was it more sort of the big infrastructure boxes, and then, you know, over on the wireless infrastructure side any sort of geographic comments you could make would be helpful. A - Ron Slaymaker: Allan, I know its infrastructure. I don't know whether it's the Gateway box versus what you describe as kind of heavy metal infrastructure, but it wasn't -- it wasn't planned, but I guess that's the way I would plug an IP phone but I don't know the difference in terms of the mix between the other. Q - Allan Mishan: Okay, thanks very much. A - Ron Slaymaker: Thank you Allan. Let's move to our next caller.

The next question is coming from Chris Caso with FBR, please go ahead. Q - Chris Caso: Hi thanks, I just going to follow on, on your comment on communication infrastructure business. And you talked about some very strong sequential growth, and it sound like it was led by base station and Voice over IP. Was the growth there pretty even between those segments and if you could maybe just give some color as to what was the catalyst to have the revenue up so much in this particular quarter. A - Ron Slaymaker: Actually it was pretty even. Both of those I would say were comparable size, not exactly, but generally about the same size, and both had about the same sequential growth rate. So it really wasn't dominated by one or the other. In the case of base stations, we've been talking for some period of time that we have a very high market share in 3G base stations, and frankly it was much higher than what we traditionally had in the 2G era of wireless equipment. Now, since then we have gone back and backfilled but our position in terms of DSPs in 3G base stations is very, very strong. And what you're seeing are new deployments that are taking off in the case of WCDMA and kind of a range of 3G products that we're a beneficiary of. In the case of VoIP, that's a space where TI has held very strong market share on the order of 70% plus, and, what I can say is, it's really not because of additional share gains. It's because of our customers in that space are in the process of deploying product and shipping their own product. So we're benefiting not from anything that we did over the last six months. This is literally years worth of groundwork that we've laid that is finally coming to fruition. Did you have a follow-up, Chris? Q - Chris Caso: Yes, sure. I wonder if you could just give some geographic commentary on what you've seen, and I know, seasonally, you see different performance out of some of the geographies. Anything you've seen in the quarter geographically that was different than what you'd see seasonally? A - Ron Slaymaker: I know, for example, from an order standpoint, all four of our regions exceeded their forecast for the first quarter level. So I wouldn't point to any particular geographic region as driving the strength that we're seeing. I would say it's pretty well balanced across the world. Q - Chris Caso: Okay. Great. Thank you. A - Ron Slaymaker: Thank you, Chris. Next caller, please.

Thank you and your next question is coming from Michael McConnell with Pacific Crest Securities. Please go ahead. Q - Michael McConnell: Thanks. Hey, Ron. Wanted to talk a little bit about high performance analog. You've stated in the past that that's going to be one of the major, or if not the main organic driver this year for your gross margin expansion, so on that note, could you talk a little bit about Q1 what your resale and or sale-through grew quarter-over-quarter, then maybe touch on where we are today with the utilizations in the analog factories? A - Ron Slaymaker: Oh, boy. Michael, I don't have the HBA specific resales like -- the only thing I could probably add incremental to what I said before was that, in fact, if you just look at sequential trends to resale, distributor resales to sell out, outpaced our overall semiconductor trends, which were flat. So there was what I would characterize as strong trends going on in terms of distributors in demand. You heard us say that our high performance analog revenue was up 6% sequentially, 43% year on year. Probably on the order of 70% of our high performance analog revenue moved through distribution, as you might imagine, for a catalog product like that. So I suspect you're not going to see a significant difference between the overall resale trends and what we saw – what we would have seen for high performance analog specifically. Q - Michael McConnell: Okay. But then taking that to the gross margin line, may be it sounds like for now at least we can expect with S and C, divestiture there, then looking at obviously the lower depreciation, that's 400 bips, that should add incremental. If we continue to see the high performance analog share gains continue and then we start to see the factory utilizations increase, again, along the lines of a very strong wireless demand in Q2, potentially for the rest of the year from the emerging market, we can get even an excess potentially of that 400 basis points. Would that be a fair statement? A - Kevin March: Michael, in theory, yes, but again, I would just alert you not to overlook the fact that we do have stock option expensing for the full year in 2006. We only had it for half a year in 2005, so that will put a little bit of a lid on that but your theory is exactly correct, and that's exactly how we're trying to grow. That's why your earlier remark about, Ron has made the comment where HPA becomes a real financial engine for the Company as time passes, directly because of that reason, and that is, as it becomes a bigger chunk of our overall revenues it does deliver a much higher gross profit margin overall. A - Ron Slaymaker: And that's not a new trend. Right, I mean we've said for some period of time that high performance analog carries gross margin levels that are above the corporate average, if you look at its growth last year, it grew at about twice the pace of TI overall. If you look at what did it first quarter, that trend is continuing. So as high performance analog becomes a bigger part of our mix, it is definitely beneficial from a gross margin standpoint, and who knows how far that can go. Did you have follow-on, Michael? Q - Michael McConnell: No, that was it. A - Ron Slaymaker: Okay, thank you. Let's move to the next caller.

And your next question is coming from Mr. Tristan Gerra with Robert Baird. Please go ahead. Q - Tristan Gerra: Hi. Can you talk about the trends in digital TVs and whether the decline in your DLP business in the quarter was unit or pricing driven, and also your sense of inventories in the channel for digital TVs post February? A - Ron Slaymaker: Tristan, the DLP trends were -- you know, DLP is like any other high volume product. You tend to have, for any particular product, pricing goes down over time. You try to offset that decline by introducing new technologies. A good example would be 10 ADP, which 10 ADP sells for a premium price versus the 720P product so you will see those type of trends going on. So I would say, though, overall, as we've said, it was seasonally down, and by first compared to fourth. And by seasonal, we mean we shipped fewer units in first quarter than we did in the fourth quarter. So, Tristan, help me with the second question. And could you repeat it? Q - Tristan Gerra: First I wanted to get a sense of inventory levels in the channel for traditional TVs. And you've said that you've worked on really improving the checks versus to avoid the situation of the first half of last year. And then just wanted to get a sense of how those inventory levels were tracking versus same time last year. A - Ron Slaymaker: Okay, thank you. Compared to last year it's an easy compare, because last year we had excess inventory, and our channel partners there, customers and their channels were in inventory reduction mode. I would describe this year as inventories in the television channels are, if anything, lean, based upon what I would characterize as some ordering intensity from our DLP customers on the TV side. So let me say inventories are in good shape, if anything, a little lean in the DLP TV channel. Thank you, Tristan. Now turn to the next caller please.

Thank you, your next question is coming from Jim Schneider with Wedbush Morgan Securities. Please go ahead. Q - Craig Berger: Actually this is Craig Berger. Thanks for taking my question. In light of the better than expected strength in wireless, what gives you confidence that there are sort of end customer inventory buildups out there, perhaps to ask it differently, how much of the growth is contributed by 3G growth, of the up 32% year on year? Thanks. A - Ron Slaymaker: I don't have it broken out to say what part of the growth is, we said the 3G revenue doubled from a year ago, but at the same time, we saw good growth in other areas, especially the low end. But I don't have it broken out specifically. Did you have a quick follow-up? Q - Craig Berger: Are your customers indicating that their inventory levels are healthy, are you seeing--? A - Ron Slaymaker: Everything we're seeing from our customers in terms of their ordering trends, as well as just general commentary and dialogue with the customers leads us to believe that they believe their inventories are where they want them. Q - Craig Berger: Can I ask a quick follow-up on the Wire Link 5.0? How's that product being received by customers and what sort of cost savings versus a discrete solution for those three radios? A - Ron Slaymaker: It's a good question but I don't know the answer, so that one I'll have to put off to a separate discussion, but I don't know the answer on that one. Q - Craig Berger: Thank you. A - Ron Slaymaker: Okay, thank you. Next caller, please.

And your next question is coming from Mr. Joseph Osha with Merrill Lynch. Please go ahead. Q - Joseph Osha: Hi, guys. Two quickies. First, Kevin, can you give me a sense as to what you think the -- sort of the sustainable or perhaps required level of capital spending for this business on an ongoing basis is going to be? I'm trying to think about where this depreciation number settles out. And then, Ron, I'll just throw you my question. On 3G, should we -- relative to total wireless in the first quarter, how should we think about how much of that came from 3G? Thanks. A - Kevin March: Joe, as we look at the CapEx over time, I think what we're trying to find on a sustained basis over time, of course, it will fluctuate any one period as you well know, but it would probably average maybe something in the 10% of revenue kind of range over time. Q - Joseph Osha: All right. So you're kind of at that level now really, I mean given what you're talking about for this year? A - Kevin March: Based upon whatever your expectation for this year's revenues would be, that would be an accurate statement, yes. Q - Joseph Osha: Okay. A - Ron Slaymaker: And, Joe, in terms of, you know, kind of how much of the wireless revenue came from 3G, let me -- instead of answering it specific to first quarter, last year about, in total, about 25% of our wireless revenue going into handsets came from 3G. It would be higher than base station side, but on the handset side, about 25% of the revenue came from 3G, so based upon what we're describing in first quarter, it would have moved above that level, but I don't have a specific number for the first quarter level to share. Q - Joseph Osha: May I ask a follow-on, Ron? A - Ron Slaymaker: Quickly. Q - Joseph Osha: Just back to Kevin, then, doesn't that mean that 2007 depreciation is going to track up from 2006 then? A - Kevin March: Joe, we haven't made a forecast up that far, so I really can't give you a full comment on that. I just think that it's really going to be a function of what our revenue expectation is and the timing of our CapEx that will dictate what that depreciation is. I will just offer to you what I said before, and that was over an extended period of time, we would expect capital expenditures to be around 10% of our revenues, and so therefore depreciation would average that same sort of level over time. Q - Joseph Osha: That's my understanding. All right, thank you so much. A - Ron Slaymaker: Okay, thank you, Joe. And we'll have time for one additional caller.

And your last question is coming from Sumit Dhanda with Banc of America Securities. Please go ahead. Q - Sumit Dhanda: Looks like I just squeaked in. Just a couple of questions here. In terms of the royalty came down slightly in the quarter, could you talk about how we should model that going forward? Should we just flat-line it at a slightly lower level than what it was exiting Q4 of '05? A - Kevin March: I think what we would tell you on the royalty, it went down a little bit on the quarter, and it was down on a year-over-year basis, but it was right in line with what we expected. Just to remind anybody else who may be listening, some of our licenses have begun to expire. Some of them have been renewed during the quarter. Some are in negotiations. But due to the negotiations and those uncertain outcomes, we feel it's pretty premature for us to make any comment on royalty levels or set expectation for those. And so what we're doing, as we give our guidance, we're building into our guidance what we think royalty will be, and if the turns out that the royalties differ materially from our expectations, first of all let you know. But for now we're just going to take royalties basically a quarter at a time. I would just remind you they've become a small enough percentage of our overall revenues it's really not moving the needle nearly as much as did it in years past anyway, and that's another reason why we don't specifically speak to it. A - Ron Slaymaker: And just, to the extent history has any bearing on the future, typically when there's a gap period between when a license expires and when that license is renewed, typically we would see catch-up payments from the licensee to cover that gap period. So, again, if there's any significant upside associated with those catch-up payments, then we would make those known to you as well. Did you have a follow-up Sumit? Q - Sumit Dhanda: Yes, I did actually. The application-specific business are called the non-HDA business down this quarter, how should we really think about that? I understand that they're trying to deemphasize the commodity analog business, but does that benefit from a - let's say reasonably strong cycle through the course of the year, or should we just think about focusing on the growth within the high-performance analog business and the rest of the business continues to grow at a much more moderate pace than the overall pace? A - Ron Slaymaker: No, I would not dismiss that that application specific business at all. First of all to your point on commodity, of our analog revenue, commodity only represents about 5%, so it really is a very small piece. That mixed signal business reflects some very strong positions in for TI in product areas or in equipment areas like printers, storage or hard disk drive products, automotive, industrial type of applications, so it's a much different type of business model than high performance analog. Generally it would carry lower growth margins than high performance analog but frankly carries very attractive operating margins just because the below the line expenses tend to be lower as a percentage of revenue. So it's an area where we continue to invest in, we continue to add engineering design talent and I think what you will see from TI is certainly growth as we've discussed in high performance analog. And maybe faster growth there but the application-specific area is important to us as well. And with that, we'll start to wrap up. Before we end the call, let me make a plug for our upcoming Analyst Meeting on May 9th and 10th in Dallas. If you're an institutional investor or an analyst you're invited to attend our meeting. If you did not receive an invitation and registration material last week via e-mail, please contact us so that we can get it to you right away. For those of you that are unable to attend the meeting in person, much of it will be webcast for your convenience. And with that we'll wrap up this call. Let me remind you that the replay is available on our website. Thank you and good evening.

Thank you. This does conclude today's Texas Instruments conference call. You may now disconnect your lines at this time and have a wonderful evening.