Paresh Maniar - Executive Director, IR Bruce E. Kiddoo - CFO Tunç Doluca - President, CEO and Director

Uche Orji - UBS John Barton - Cowen & Company Craig Hettenbach - Goldman Sachs John Pitzer - Credit Suisse Ross Seymore - Deutsche Bank Doug Freedman - American Technology Research Steve Smigie - Raymond James ChristopherDanely - JPMorgan Tore Svanberg - Thomas Weisel Partners David Wu - Global Crown Capital Rahman Shah - Barclays Capital Craig Ellis - Citigroup John Dryden - Charter Equity Krishna Shankar - JMP securities Mahesh Sanganaria - RBC Capital Markets

Thank you for standing by. Good day and welcome to Maxim Integrated Products First Quarter 2009 Earnings Release Conference Call. Today's call is being recorded. At this time for opening remarks and introduction, I will turn the call over to Mr. Paresh Maniar, Executive Director of Investor Relations for Maxim Integrated Products. Mr. Maniar, please go ahead. Paresh Maniar - Executive Director, Investor Relations: Thank you operator. And welcome everyone to our fiscal first quarter 2009 earnings conference call. With me on the call today are Chief Executive Officer Tunç Doluca; and Chief Financial Officer Bruce Kiddoo. There are some administrative items that I'd like to take care of before we cover our results. First, we will be making forward-looking statements on this call and in light of the Private Securities Reform Litigation Act. I would like to remind you that the statements we make about the future, including our intentions or expectations or predictions of the future, including, but not limited to possible statements regarding bookings and turns orders, revenues and earnings, inventory and spending levels, manufacturing efficiency or capacity, projected end-market consumption of our products, the estimated time to complete our restatement project and any other financial results are forward-looking statements. If we use words like anticipate, believe, project, forecast, plan, estimate or variations of these words and similar expressions relating to the future, they are intended to identify forward-looking statements. It is important to note that the company's actual results could differ materially from those projected in the forward-looking statements. Additional information about risks and uncertainties associated with the company's business are contained in the company's SEC filing on Form 10-K for the year ended June 28, 2008. Copies can be obtained from the company or the SEC. Second, in keeping with the SEC's fair disclosure requirements, we have made time available for a question-and-answer period at the end of today's call. This will be your opportunity to ask questions of management concerning the quarterly results and expectations for the next quarter. An operator will provide instructions at that time, we again request that participants limit themselves to one question and one follow-up question during the Q&A session. I will now pass the call over to Bruce. Bruce E. Kiddoo - Chief Financial Officer: hanks Paresh. We are very pleased to report full financial results this quarter. Completing the re-statement, re-listing on NASDAQ, and announcing $750 million share repurchase program, are all signs that Maxim is back at full strength. And while current economic environment provides a new set of challenges, we are confident we have the business model strategy and execution to weather the storm and emerge as a premier analog semiconductor company. Moving on to the result of our recently completed September quarter, let us start with the income statement. Revenue for the first quarter was $501.2 million, flat with last quarter and within our guidance range. Our revenue mix by major end-market in Q1 was approximately 28% computing, 28% consumer, 24% industrial, and 20% communications. In the consumer market, our revenue grew in handsets for the third consecutive quarter as power management, multimedia and multi-function design wins continue to ramp. In the communications market, our revenue was flat as the as the bay station market segment continued to grow due to strength in the Asia infrastructure market, offset by lower revenue and other communication market segments. In the industrial market, our revenue increased primarily due to strength in our medical product lines. And finally as expected, in the computing market, revenue declined in the notebook motherboard power management product line. GAAP gross margin declined in Q1 by 250 basis points due to lower factory utilizations as we proactively took steps to manage inventory, and a higher percentage of stock based compensation expense, allocated to cost of goods sold. In addition in Q4, we had a favorable warranty reserve adjustment that did not recur in Q1. Non-GAAP gross margin was 62.8% and has now been favorable for two years. As forecasted, we tightly managed the operating expenses in Q1 with GAAP operating expenses down 11 million due to lower stock based comp expense and lower restatement expenses. We kept non-GAAP operating expenses flat despite one month of the company wide merit increase. Total stock based comp in Q1 was $37.6 million down $2.1 million from Q4. Expenses primarily related to the restatement and the ramp down of wafer fabrication facilities were $30.1 million in Q1, down $5.6 million from Q4. GAAP EPS was $0.21, non-GAAP EPS was $0.35. Turning to the balance sheet; total cash, cash equivalents and short-term investments increased by $38 million during Q1 to $1.26 billion. A $157 million in cash flow from operations was primarily reduced by $64 million for dividends and $38 million in payments for property and equipment. Inventory declined by 3% due to our proactive steps to lower spending in the quarter. Average day sales outstanding was flat at 49 days. Capital expenditures totaled $29 million in Q1 or 6% revenue, down $8 million from Q4 and down 57% from a year ago. This is consistent with our goal to reduce capital expenditures and is the lowest quarterly amount in three years. On October 13th, our Broad of Directors authorized the repurchase of up to $750 million of the company's common stock. Through Tuesday October 28th, we have repurchased approximately 5.5 million shares of common stock at a total amount of approximately $77 million. Our share repurchase program is subject to this market and economic conditions. Regarding bookings and backlog, during Q1 our bookings declined by 6%. Our beginning current quarter backlog of net realizable revenue of Q2, for Q2 is 293.7 million, a decline of 8% from the prior quarter. Bookings in Q2 have weakened further due to the current economic environment. Based on our bookings and beginning backlog, we expect Q2 revenue to be between $410 million and $440 million. Our projected revenue decline in Q2 was broad based across almost all market segments. Our notebook market segment will decline again in Q2 as projected due to the market transition from the Santa Rosa to Montevenia, and in addition we are seeing an overall market softening. Cell phones after growing the last three quarters will decline in Q2 due to tighter inventory management by our customers and lower end demand. Computing and peripherals will decline due to an over inventory of monitors, and industrial will decline due to lower demand through all channels. A few market segments are still showing strength; bay station, due to the continued Asia infrastructure build out; storage, due to ramp up of a large OEM product line; and camera, due to the demand for digital SLR models. Due to the lower revenue, we are taking specific and immediate actions to manage cost, which Tunç will discuss in detail. Certain of these actions will result in one time charges in Q2. We continue to evaluate R&D programs to fund long-term growth drivers while reducing investment and lower ROI programs. This will result in headcount reductions across several product lines. We will consolidate and close several office and warehouse sites, and we will write off approximately $10 million to $15 million in excess manufacturing equipment. Offsetting these reductions is the full quarter impact of our annual merit increase in the recently announced Mobilygen acquisition. Additionally on a GAAP basis, we will have restructuring charges associated with some of the above cost reduction actions and stock based comp will increase due to fine goodwill payment for options that expired in October during our blackout period. Taking into account all of the above items, non-GAAP gross margin in Q2 will decline due to the lower overhead absorption. GAAP gross margin will decline further due to the higher stock-based comp and fixed costs on lower revenue. As previously stated, we continue to actively work on various cost reduction initiatives to maintain stable gross margins. Non-GAAP operating expenses will benefit from the comps reduction and lower variable expenses offset by the merit increase in the Mobilygen acquisition. On a GAAP basis, operating expenses will increase significantly due to the write off of manufacturing equipment, severance cost, site closures and increased stock based comp expenses due to the final payment for expiring options. We call that operating expenses declined by $11 million in Q1 and were flat on a GAAP basis. Overall we expect stock based comp in the range of $50 million to $52 million with the increase over Q1 due to the expenses related to the final payment for expiring options of approximately $14 million. This amount will not repeat in Q3. We expect expenses related primarily to restructuring actions in the range of $35 million to $45 million with the increase over Q1 due to cost reduction initiatives. The Q2 GAAP tax rate will decrease to 5%. This was primarily due to the reinstatement of the Federal R&D tax credit which is retroactive to the beginning of calendar year and is applied to our lower GAAP income in Q2. The full year tax rate is expected to be 31%. We are forecasting the Q2 non-GAAP tax rate at 29% as the R&D tax credit is a fixed dollar amount and has a smaller impact when applied to the higher non-GAAP profit before tax. For earnings per share on a non-GAAP basis the expected range is $0.23 to $0.27 due to the lower revenue. On a GAAP basis the expected range is $0.03 to $0.09 due to the lower revenue and increased restructuring and stock based comp expenses. In Q2 we again expect strong operating cash flow offset by dividend share repurchases, the Mobile-Vision acquisition, payments for capital equipment and final payments for restatement related programs. In FY '09 we expect capital expenditure to be in the range of $150 million to $175 million which as a mid point would be a 23% decline over FY '08. Due to the lower revenue our estimates will likely trend towards the lower end of the range. We will continue to repurchase stock within the current $750 million authorization and continue to evaluate various capital structural alternatives. Our strong cash flow and current cash balance provide us tremendous flexibility in this uncertain environment to repurchase our stock at historically low prices take advantage of any acquisition opportunities or operate our business without disruption if the current economic crises worsens, or continues for an extended time period. I will now hand the call over to Tunç to discuss our business. Tunç Doluca - President, Chief Executive Officer and Director: Thank you Bruce. Thank you all for joining our call and good afternoon. The last 90 days have been significant for Maxim. First our restatement team finally completed it's project and we restated our financials for fiscal years 1997 through 2006. The financial filing was welcome news by employees and shareholders alike. We are all pleased that the restatement is now behind us and we can focus on the future. Second, our financial filing was followed by the re-listing of our stock on net debt October 8, an even highlighted by Maxim ringing the closing bell. Third Maxim reached a tentative settlement of Derivative Litigation and we expect the settlement to be affirmed shortly by the Delaware and California courts. Fourth we completed the acquisition of Mobile-Vision. Mobile-Vision adds leading H.264 video compression technology to Maxim positioning us to participate in the $2 billion video security semiconductor market. The security industry has adopted H.264 as the next generation video compression standard for streaming, recording and archived file storage. We project to serve the available market for H.264 compression in IT cameras and digital video recorders to be in excess of $200 million in 2012. Mobile-Vision is a pioneer and recognized leader in video compression technology with their SOC solution. The overwhelming majority of security cameras installed today are analog whereas recording, storage, analytics and IP streaming are digital. Video compression is therefore a strategic technology for Maxim from the analog to digital video signal path. With this addition we will be offering video core technology to customers at 110th the power consumption and half to cost for current competing DSP solutions. Finally our Board authorized a significant stock repurchase two weeks ago and we are capitalizing low equity valuations to buyback our stock. This affirms our confidence in our long term business model. Moving on to operational issues, we're taking several actions to deal with the current economic environment. First wafer fabs; the Dallas fab shut down is on track. We're making excellent progress in bringing up the process technologies at our San Antonio and Beaverton fabs. We further reduced capacity of the San Jose fab as well. San Jose will continue to be our predominant process technology development center. Second, end of line test operations we transferred additional end of line testing offshore to our Philippines and Thailand factories. Third, we will shut down our production fabs for two weeks during the end of the calendar year to control inventory build up. Fourth, we've already reduced loading at our strategic wafer foundry partner. And fifth, we will have a companywide one week shut down during the last week of the year. Next I will cover OpEx. It is important to note that below the line spending was flat during the September quarter despite the annual salary increase that went into effect at the beginning of September. We will continue to manage our operating expenses prudently, and are continuing our actions to control below the line spending. Specifically, one, we plan we move certain support functions offshore. Two, we will consolidate several small offices to reduce spending. And three, we will restructure and consolidate several product lines and business units to improve operational and selling efficiency. We reviewed relative long-term profit prospects, track records of team members and our probability of success of all our product lines. These reviews will result in us reducing product development efforts in some lines, while increasing investment in others. We will also consolidate lines that are in the harvest mode to reduce spending. These actions will result in some headcount reductions in our business units. I will now turn from OpEx to our end markets to provide some color. First on communications; sequentially from fiscal Q4 to Q1, bookings from the communications major end market increased modestly. Strong orders from the base station segment were offset by weakness in Telecom. Base station orders were strong due to continued built out of infrastructure in Asia, specifically in India. The data communications and networking bookings reflect Q1 over Q4. However in these markets the order rate dropped substantially quarter-to-date in Q2, due to weak global demand. Despite the current macro economic lows, we believe the need for more bandwidth for wired and wireless data will continue to rise in the future. Infrastructure support for high definition video transmission will drive most of this future of demand. Our unique mixed-signal technology positions us well to benefit from this long term growth. Next industrial; during the September quarter bookings in this end-market declined noticeably and the weakness continued in the current quarter. This weakness was largely reflected in distribution orders. The downturn was broad based affecting almost all segments within the industrial major market. Expectedly, the Q1 bookings reductions were in Automatic Test Equipment, automotive and instrumentation and measurement. The military market bookings were essentially flat. Our customers turned very cautious recently and are not willing to hold any inventory. They're only willing to place orders on us once they have confirmation, they can sell their end products. As a result lead times from customers have come down. From a longer term perspective, we continue to make progress with our distribution strategy. Distribution teams are identifying new business opportunities and we see a definite month-over-month increase in identified sockets and design wins with small and medium size customers since fiscal Q4. These new opportunities and design wins will translate to revenue in the coming years. We also expect the increase in distribution business to have a positive effect on our gross margins. Our automotive product lines have also made excellent progress in the last year. Recent design wins include mini sockets and High-brightness LED applications, embedded microcontrollers for parking assist and hybrid electric vehicle battery monitoring applications. Many of these wins are recent and will take several years to add to our revenue. The additional Mobile-Vision product lines who are extensive power, system management, audio and video product portfolio will also fuel growth. We'll have an end-the-end solution in the high growth video security market, also a segment of industrial. Third, I'll discuss computing; as projected we saw sequential bookings weakness in the computing major market, specifically, in Notebook motherboard power management. The weakness exceeded our forecast based on the Santa Rosa and Montevenia transition. This was caused by our ODM customers taking a cautious stand due to global economic conditions worsening. Several San Jose models were terminated more abruptly than forecasted. On the other hand, we see good growth prospects in the next calendar year in our storage business. The program stalled by development delays unrelated to Maxim was finally started. This was our 3 Gig expander products. We also have begun sampling our 6 Gig expander. This product was well received by our Tier 1 customers since it reduces power consumption 30% over computing products. Finally, the consumer end-market. During Q1, Maxim's revenue was up strongly and bookings from this end-market were up modestly from the prior quarter. Digital camera bookings were up and handsets were flat. However, just recently our Tier 1 handset customers signaled that they will reduce their inventory levels and take a wait-and-see attitude before production launching several new models in which we have won sockets. Despite the side level of short term customer cautious stand, we are extremely pleased with our design win results. This clearly validates our strategy to offer products with higher levels of integration in those markets. Higher integration facilitates market share gain and also protects gross margins, since there are limited competitors capable of developing such products. In the handset market, we have several trends as to generate market share gains in the next calendar year. One, continued market share gain and standalone subsystems and Kodak design wins for audio. Two, mini analog baseband products ramping next year, these combine power audio and additional digital functionality in 3G and GSM EDGE platforms that we were not in previously. Three, our Integration analog baseband products will go into production last year. These products will be used along side Marvel and Samsung applications processors. We are also pleased with our inner business unit collaborative work that produced the smallest analog baseband solutions for Intel's mobile internet devices platform. Our team is sampling a chip set that is 45% smaller in solution size than our nearest competitors. Finally, I will turn to the impact of the economy on Maxim. We are all aware of the global economic downturn. I do not believe any of us is able to predict how deep it will be and how long it will last. Rather than attempting to be precise in our forecast with the economy, what we will do is move ahead prudently. First and foremost, we will continue to emphasize innovation and also develop our integration products. Second, we will be mindful of our spending. We will cut back R&D in businesses that are not producing acceptable growth or margins, while increasing emphasis on businesses that are growing and have the potential to produce high levels that absolute margin dollars. Third, we will use our cash wisely, to add strategic technology and product lines to the company through acquisitions. Four, we will invest in activities that accelerate our design wins whether internal or by way of distribution. And fifth, we will support our shareholders and provide returns in the form of continued dividend payments and the strategic repurchase of our stock. As I said, these are difficult times for all of us. However, we have a very resilient company. Our cash flow from operations remained strong even at lower revenue levels and we have a good cash position. I am confident the actions we are taking, will enable Maxim to weather the current macro economic storm, and emerge from it a winner. I will turn the call back to Paresh. Paresh Maniar - Executive Director, Investor Relations: That's the end of our prepared comments. We would now welcome your questions. Please limit yourself to one question with one follow-up. Operator pleases begin polling for questions. Question And Answer

[Operator Instructions].Our first question comes from Uche Orji from UBS. Uche Orji - UBS: Thank you very much. I know since you have gone through us all the factors affecting the current quarter, but between your last announcement and the current guidance, can you point out more specifically what really changed to literally current significant sequential declining guidance? Tunç Doluca - President, Chief Executive Officer and Director: Okay, well, if you look at when we... our timing in terms of when we provided guidance the last time, it was very early in our fiscal quarter of Q2. And we essentially relied on the forecast at the time as well as the bookings we had in Q1, which were down 6% and our opening backlog was down about 8%. So that was the data we had; it was what we had received as forecast from our business units as well as our sales force to provide guidance very early in our quarter. However as the quarter progressed, we noticed that our booking levels dropped sharply and we also did another poll of our customers, both from our business units and from our sales force, and decided that overall there was a decline in the demand from our customers. So that's the reason we essentially had to reduce our forecast further. Also, as we also noticed that many of the small customers actually began to reduce their booking levels before our large customers did. And therefore, the news from the large customers came later because typically they have shorter lead times provided to us and that contributed as well. Uche Orji - UBS: Okay, that's helpful. If I look at what you are doing, can you just help me understand where utilization rates stands today? Where you'll be exiting with utilization rates by the end of the December quarter? And what that will mean for your inventory right now? I know you said you are taking all these actions. But if you can just, let me know. And also while answering that, if you can also tell me where the general inventory is right now as well that would be helpful? So three points in there; one is utilization rates now where you'll be? What it means by inventory and what it means for the channel situation? Thank you. Tunç Doluca - President, Chief Executive Officer and Director: Okay, I'll take part of that and Bruce can answer the rest of it. But in terms of our utilization rates, they remain relatively unchanged from the previous quarter at about 70%, 75% range. In terms of the inventory and the channel, they also from an absolute basis, really have not changed substantially from Q4 to Q1. And let's see what was your third question? Uche Orji - UBS: My third question is if you can tell me what that means for inventory and where channel inventory is now. I know your inventory level came down, but if you can just tell me where channel inventory is now relative to where it was last quarter? Bruce E. Kiddoo - Chief Financial Officer: Yes. So Uche, this is Bruce. So, I think from an inventory point of view, while we are continuing to reduce spending, I think the overall demand is probably going down a little bit faster than we can say close our Dallas fab and take some of these other actions. So we expect inventory to increase in Q2 over Q1. Exactly how much, depends on how fast we can start ramping down the spending. Uche Orji - UBS: Okay. Tunç Doluca - President, Chief Executive Officer and Director: And in terms of channel inventory, we have seen the distributors are really... they began to take some actions in Q1. So we don't really see that as a major issue right now. It's reduction we are seeing is mostly because of end-demand reducing in the world, not because of there is excess inventory at least for our products. Bruce E. Kiddoo - Chief Financial Officer: All right, thank you.

Thank you. Our next question comes for John Barton with Cowen. John Barton - Cowen & Company: Thank you. On the topic of M&A, since you've mentioned obviously you closed the Mobilygen acquisition. You talked about potentially doing some other things going forward; I think the word you used was strategically use cash. Could you give us some insight as to how you quantify the appropriate M&A transactions and potentially how much cash you are willing to use in the coming quarters in order to pursue that? Tunç Doluca - President, Chief Executive Officer and Director: Well, we really... I don't think we've really set a very strict budget on how much we are going to spend on this. What we do is we essentially have our business units look at their product portfolios. What they hear from their as to what they need in technology and the future and we might not have. And if that results in an interesting acquisition for us, then we go ahead and have the talks and pursue those. Having said that in general, we are looking forward for companies that maybe in early stages of revenue generation and those that will provide us with at least become breakeven for us within about a year so. So those are kind of the general and then obviously their products have to fit into the Maxim product line or fit into our overall strategy. So... but other than that, we really have not placed the strict budget on what we are going to spend on acquisitions. Bruce E. Kiddoo - Chief Financial Officer: This is Bruce. I mean if you look at the type of companies we are looking to acquire or to really that technology companies has changed that are sort of either pre-revenue or just ramping, usually evaluations for those are $100 million or less. If you look at those for two acquisitions we've done right now, the Vitesse acquisition, the $75 million and now the Mobilygen at the $33 million. That sort of the range that you could expect. Now certainly it's a good opportunity came up above that. We obviously have the cash and flexibility to execute on that.

Thank you. As follow up if I could, Bruce you highlighted the fact that gross margins on a non-GAAP basis have been flat for quite a period of time. Putting aside inventory correction or wafer loading, et cetera. How do you think those gross margin should trend over the next year or so based upon product mix et cetera? Bruce E. Kiddoo - Chief Financial Officer: Yeah, so that's a big arthritis [ph] you put on that as far as the kind of where demand ends up. I mean fundamentally we still believe on a non-GAAP basis the kind of 63% to 65% is the right target. We continue to work very hard to manage from a cost side, reducing for giving our capacity in line with our demand. And then from a spending point of view, again we try to we are still trying to balance against the four end markets that we are in. Mobilygen is a good example of where we are continuing to invest in a business, which is higher gross margins and in order to kind of keep that balance that we've always tried to reach with the 63% to 65%. So I think that's still the right range. I think obviously on a seasonal quarter-by-quarter, there is always a little mix change, but that's going to be managed within the 63% to 65%. Tunç Doluca - President, Chief Executive Officer and Director: Let me add to that. I mean that is our kind of a long-term objective. And you did start your question with this qualifier, not considering the loading effect. So we will have some loading effects essentially until we completed the shut down of our Dallas facility.

Thank you. Our next question comes from Craig Hettenbach from Goldman Sachs. Craig Hettenbach - Goldman Sachs: Yes, thank you. I'll start with the core power for notebooks; are there any other end markets or applications that you are seeing increasing competition making it more difficult in terms of managing that revenue and margin? Tunç Doluca - President, Chief Executive Officer and Director: The notebook market, all of the... whatever functions you look at, there is competition, because there is large market therefore a target that's set by many competitors. But in those parts the of notebook, where the number of competitors are less and we can make more differentiated products for instance highly integrated products or multi functions on a chip. In those areas, we're really are seeing an increased number of competitors. So in the field, where it's not commoditized or where it's not single function, we have not seen many additional competitors. Bruce E. Kiddoo - Chief Financial Officer: I mean a good example of that is our cellular business and before the kind of the current crisis hit hard in our second quarter, our cellular business was up significantly in Q1, and that was third straight quarter that we saw an increase in that business from a revenue point of view. Again I think a strong indicator of to the extent that you have differentiated product, we're able to gain market share and increase our business. Craig Hettenbach - Goldman Sachs: Okay. And then if I can just follow up, any update on the general purpose products and effort stat to expand that product portfolio? Tunç Doluca - President, Chief Executive Officer and Director: Yes, I can give you some updates. I mean the business units that have more focus on those, which are in our core products division. They've made a lot of progress, they've put a lot of focus in this area and we've launched several products and programs both for development but also really emphasizing how to sell those products more effectively. I talked about our design win and identification progress we've made for example in distribution products. Almost all of those products are what I would call core products for us and those business units that make those products really have made a lot of progress in terms of both selling what they've got but also launching products that are highly differentiated in more general purpose. And we're also making good progress on as you know we started the CTO office about 6 months ago and they've been coming up with some really good ideas for us. Obviously, I can't give specifics because that's highly proprietary, but we're getting some results as to what types of general purpose type products we can make that will really differentiate Maxim from our competitors.

Thank you. Our next question comes from John Pitzer from Credit Suisse. John Pitzer - Credit Suisse: Yeah good afternoon guys. Thanks for taking the question. Tunç, just quickly when you look at the $50 million sort of short fall over the last two weeks in the mid part of the December guidance, can you give us a little bit color around end market. I know you talked about it being broad based. I'm just kind curious if there were a few end markets specifically complying to you. And I guess it's just if you could help me understand how the push out on the handset ramp from the Tier I customer try to come into play as well? Tunç Doluca - President, Chief Executive Officer and Director: Well if we look at most of the reduction we made as from the time we gave our first guidance. We've seen a lot of forecast reductions from our customers, especially in the handset market and we have also seen some from the computing end markets, specifically in Notebook. So those are the main ones where we've had significant number of reduction coming in the last few weeks. That's really resulted in us having to reduce our revenue guidance. John Pitzer - Credit Suisse: And then guys let me just do the follow on to the previous question. Just in general what are you seeing in the pricing environment right now with TI, kind of getting out, part of their handset business, would you expect to see some increased competition if these guys trying to execute towards their plan of accelerating analog growth and what's kind of your expectation in the next couple of quarters, especially if we kind of stay in this delays relative to the macro? Tunç Doluca - President, Chief Executive Officer and Director: Well, if you ... I mean if we look at the competitive landscape out there, in general we are not seeing something that's widely different from what you would expect, which is in products that are more commodity type products and they are single function. There is always pricing pressure, exactly what Texas Instruments can end of doing. We are really are not sure of. That's obviously within their plans. But in terms of the amount of competition we're seeing and as I said it's really coming mostly in the commodity products and it's really not that much different than it used to be. Obviously that could change into the future as companies look for more revenue increases for their markets, but we are pretty certain with our differentiated products, we are able to hold our prices and we certainly don't want to be the price leader in that area and we want to continue to sell product performance? Bruce E. Kiddoo - Chief Financial Officer: This is Bruce, just to get back to your question on the reduction and the guidance from the preliminary to now. Another data point that I think is interesting here, is if you look historically, we usually turn about 35% to 37% of our business. And if you look at kind of the midpoint of our guidance here, that assumes about 30% turn and so what it says is, basically the booking specifically within the quarter are dramatically down from where they would be in any historical time period and that's really kind of just indicative of the slowdown in bookings that we saw. Even month-by-month it's been very significant as we've gone thought the last couple of months. Tunç Doluca - President, Chief Executive Officer and Director: Hello?

Thank you. Our next question comes from Ross Seymore from Deutsche Bank. Ross Seymore - Deutsche Bank: Hi guys. Bruce, on the OpEx side of things excluding the one-timers including that the ESO pop up of $14 million, how should we think about kind the GAAP number for that going forward? Bruce E. Kiddoo - Chief Financial Officer: So I think on the ... I think we are still thinking if you just think of it on a non-GAAP for second Ross, the 20% to 22% and then the 5% to 6%, it's kind of been always our long term business model, right. I think the non-recurring expenses like you say over the long term should go away. Historically, Maxim hasn't had a lot of non-recurring items. I think those are just indicative of the current environment and then on the stock-based comp; again, we were at $37 million total for the company this quarter and clearly, our goal is to drive that number down. But the key thing there is we have to get through over the next couple of months. How we're going to address our annual option grants that we haven't done for three years and how we get through addressing underwater options. Once we have both of those done we'll know exactly where our stock-based comp is and I'll be able to answer your question much more precisely. Tunç Doluca - President, Chief Executive Officer and Director: But our long-term goal is to reduce our stock-based comp from current level. Bruce E. Kiddoo - Chief Financial Officer: Absolutely. Ross Seymore - Deutsche Bank: I guess my follow up and I know the demand picture is incredibly fluid to put it mildly your seasonality has been very, very wild in the calendar first quarter. Historically down 10% earlier this year. Generally speaking how should we think about Maxim seasonality going forward? Tunç Doluca - President, Chief Executive Officer and Director: Let me take that, Bruce and I kind of looked at each other. So we are in a ... the way you paraphrased your question was good because, we are seeing such wild swings right now. It's really difficult for us to be able to tell whether calendar Q1 is going to be closer to what we have seen historically or not. So it's really hard for us to be able to predict, what's going to happen in calendar Q1. Bruce E. Kiddoo - Chief Financial Officer: I mean Ross in one-tenth a lot of the business and at the time went say in cellular, lot of our growth storage, we see those continuing on. The flip side of that, of course is what's going to happen with the economy and just the change we saw from the ... beginning of October to the end of October in our demand picture makes it almost impossible to predict, what's going to happen now in calendar Q1

Thank you our next question comes from Doug Freedman from AmTech Research. Doug Freedman - American Technology Research: Thanks for taking the time guys. Can you give us a little bit more clarity on ... I know that top line started to get a handle on, but you must have some targets for your cost reductions. Can you help us understand what those targets are and may be what your shut down your temporary cost reduction plans are in the next quarter or two. And what the triggers are to make you execute on them? Bruce E. Kiddoo - Chief Financial Officer: Sure. So lets start off with the kind of below the line spending right, what were doing immediate action. So in total since listed a number of items, but those included obviously the business unit restructuring, while reducing headcount in certain kind of lower ROI program. We talked about site closures, we've talked about moving certain functions, support function overseas. And when that's all said and done Doug, it's probably going to be about $3 to $5 million benefit per quarter. Those are all going on right now, so we're not going to achieve all of that this quarter obviously. And so I think that's kind of a target range that we're looking at for the actions that we have right now. Of course, we have been doing this now for a couple of quarters. So we are ... this is a continues process, we have a team that meets regularly as far as cost reduction, so we will identify ... continue to look for future cost reductions as well. I think thinking about that though from a when you think of our Q2, the offset to that of course is the Mobilygen acquisition with on a full quarter basis will be about $4 million in OpEx. So those two items pretty much offset each other, but again we're just going to continue to drive further cost reductions going forward. Doug Freedman - American Technology Research: Can you help me understand where those are coming or those you said R&D, SG&A, just below the line? Bruce E. Kiddoo - Chief Financial Officer: To those are... again, and then when you talk about the manufacturing costs reductions, we have previously talked about the Dallas, when that completes, that will probably be about $10 million savings per quarter. We have talked... Tunç mentioned the reduced capacity of our San Jose fab and that's probably about another say $3 million a quarter benefit. All of these items that are on the manufacturing line though, those are really as we're just trying to get our capacities spending in line with our demand. And so that's really supportive of us achieving the kind of our long-term model of the 63% to 65%.

Thank you. Our next question comes from Steve Smigie from Raymond James. Steve Smigie - Raymond James: Great, thank you. Just wanted to follow up a little bit on the options expense. It seems to be pretty significant shift in terms of cost of goods sold sequentially in R&D SG&A. Can you help me understand what that would look like in this quarter and then in terms of the three year catch up I guess. When would I expect to see that sort of hit the P&L? Tunç Doluca - President, Chief Executive Officer and Director: Sure. Bruce E. Kiddoo - Chief Financial Officer: Yes, normally you would expect to see about 20% of our stock-based comp, the COGS line, this quarter it was higher than that. And the reason for that was is we actually lowered inventory, and so the stock-based comp that was on the balance sheet got amortized out at a faster rate. And so that's really why we saw that sort of one-time profit in that. But I think longer term, I think another 20% is going to COGS is the appropriate way to model that. I am sorry, what was your other question? Steve Smigie - Raymond James: Yes, just when is the three year catch up, when would that happen on a stock comp, and how does that roll through? Bruce E. Kiddoo - Chief Financial Officer: Sure. We are looking at that right now. Obviously we are trying to get done as soon as possible to the extent we can execute on it sooner. That would result in a lower stock-based comp charge for those... for that grant at the current stock price. So that's why we are trying to move very quickly to do that. It would probably be for out years, and so it probably is for say calendar years 1011, and '12. And so from a stock-based comp point of view, it would amortize between the grant bay and calendar year '12. Clearly our goal even with that on annual grant is that a lot of the old options are rapidly falling off. And so again our goal is to take that $37 million number and bring that down as aggressively as we can long-term while obviously continuing to incentivize our employees. We do have a very good benefit right now if there is a still remaining to the current stock price performance as that we can incentivize our employees and get them new grants at a relatively low stock-based comp change.

Thank you. Our next question comes from Christ Danely from J.P. Morgan. ChristopherDanely - JPMorgan: Thanks guys. Can you here me? Tunç Doluca - President, Chief Executive Officer and Director: Yes. Bruce E. Kiddoo - Chief Financial Officer: Yes. ChristopherDanely - JPMorgan: Okay, great. First question is on the balance sheet. It sounds like you prefer M&A activity to cranking up the buyback. I am just curious as to why at this given point in time the stock price? Bruce E. Kiddoo - Chief Financial Officer: Yes, I wouldn't necessarily say that's an accurate assumption. Obviously we are looking at both. We actually did the preannouncement in order to get on to the market and buy our stock at the lower prices because we felt that it was a very compelling value. So, within the last couple of weeks, we bought 5.5 million shares for $77 million. So I think we're out there, part of that is you are just limited based on your four week trailing volume from a 10B-18 point of view. Having said all that in this uncertain environment suddenly having the flexibility of whether we look for a strategic acquisition, whether we continue to repurchase shares or whether we just make sure, we have plenty of reserve in case if recession terms significantly deeper or appears to be significantly longer. So, we have no visibility too. Tunç Doluca - President, Chief Executive Officer and Director: Yes, and also let me add to that perspective. So that is also one of the reasons, we did not do an accelerated share repurchase. We believe that in this environment the company needs all the flexibility it can have. So we didn't want to go ahead and essentially complete a quick share repurchase. So that we would have the flexibility to do whatever we needed to do whether it's doing acquisitions or a buyback. And I think that that... we really believe that that's a good strategy for the company going forward until we got more certainty in the market. ChristopherDanely - JPMorgan: Sure. And then as my follow up question on gross margins; if we take a look at the effects of the lower utilization and accelerated depreciation, should we assume that margins drop again in your fiscal third quarter? Bruce E. Kiddoo - Chief Financial Officer: Third quarter or second quarter? ChristopherDanely - JPMorgan: Fiscal third quarter, should we assume the gross margins drop again? Bruce E. Kiddoo - Chief Financial Officer: I think they will continue to ... obviously, we are not giving guidance for that quarter. But I think just because of the utilization, there will continue to be pressure. Tunç Doluca - President, Chief Executive Officer and Director: It really will depend on what the revenue is, and I think it's too early for us to give that guidance.

Thank you. Our next question comes from Tore Svanberg from Thomas Weisel Partners. Tore Svanberg - Thomas Weisel Partners: Yes thank you. It just feels like you are a little bit more aggressive this time around with your cost reductions, is this purely just to respond to the shortening bookings or any other event that may trigger that? Bruce E. Kiddoo - Chief Financial Officer: So Tore this is Bruce. We've been absolutely, we were working on this ahead of time. We new that we had to try to manage OpEx, I mean our goal has been to try to keep it flat. We knew that we had the merit increase coming up here, and that we wanted to be able to deal with that. And we knew we had the ability to do acquisitions and still manage the OpEx. So a lot of its work, we had already started and was ongoing. I would say that maybe the sudden drop-off in bookings gave it a little bit more urgency, but lot of the work and planning was already started. Tunç Doluca - President, Chief Executive Officer and Director: Yes, so I ... Bruce answered the part of that that's mainly driven our OpEx, but also in terms of manufacturing, these have been under works for over a year now. The Dallas fab for instance, we announced that in Q3 fiscal Q3 and there are many other programs like reducing our, the overall cost by transferring those offshore. Those started last year, so it's not ... this was not a reaction to what happened in the last month, but it's been going on for while. Tore Svanberg - Thomas Weisel Partners: Sounds good and then once you are done with consolidation plans, what would be your capacity from a breaking order [ph] perspective. I am not asking your utilization rate, I am just trying to understand with what you will have left how much revenue could you potentially produce? Tunç Doluca - President, Chief Executive Officer and Director: We can produce a lot of revenue, mainly because we do, as you recall we did the strategic foundry partnership with Epson so that gives us a lot of flexibility in terms of being able to start wafers. And that capacity is, actually it's larger than what we had doubt [ph] so it easily offsets what we are we setting down, and we've also significant capacity in our San Antonio facility as well when we want add slow. But we have planning of room to grow in terms of wafer Fabs and as you know the Irving facility, it's not, there is no equipment there right now, but that's available for us in case we do need it.

Thank you. Our next question comes from David Wu from Global Crown Capital. David Wu - Global Crown Capital: Yes. I just want to get some clarification. Since we don't really know how deep and how long this downturn is going to last. At what point, I ... here already one of the programs that you have to reduce cost, but I was wondering, particularly in the seasonally soft for the third quarter of this coming year. If we have a lot of these self through and the OEMs come back and say we didn't do good job in reducing our inventory and have another big dip. At what point do you want to show on a GAAP black ink in Q1? I mean, in third quarter and what other additional things you might be able to do lower your breakeven point more? Should that sort of thing happen? Bruce E. Kiddoo - Chief Financial Officer: Yes, David as I said, I mean we have an ongoing profit improvement team. They're working all the time and we have announced the items that we're implementing today. If that scenario happens with us, weather that scenario happens or not. We're going to continue to aggressively work to manage our OpEx and weed out inefficiencies, I mean we're doing that on a regular basis, just so that we can make sure we're investing in future growth drivers. If the scenario, you layout comes true, we may be a little bit more prudent in those future growth investment and just focus on the cost reduction and lowering that. Tunç Doluca - President, Chief Executive Officer and Director: So David, this is Tunç. So I mean we've got several things in mind which I actually would not like to specify right now. But we will have depending on how our customers forecast g, we will probably have to take more actions if necessary in our fiscal Q3. Yes, as you said that there is continued dropping of demand overall world wide and continuing drop in our revenues. So, we have some options in terms of making sure that we can get through a period where there is further drop in our revenues. David Wu - Global Crown Capital: Okay, and a quick one. In terms of your tax rate on a GAAP basis for fiscal 2010, should I use 11% and that's about as close as you are likely to get? Well I think we ought to get, you don't have that, do you? Bruce E. Kiddoo - Chief Financial Officer: No. Tunç Doluca - President, Chief Executive Officer and Director: For 11? Bruce E. Kiddoo - Chief Financial Officer: We will get back to you on that.

Thank you. Our next question comes from Rahman Shah from Barclays Capital Rahman Shah - Barclays Capital: Hey guys. Sounds like you are undertaking a pretty large restructuring. Bruce, could you give us the non-GAAP gross margin guidance and non-GAAP operating expense guidance for fiscal Q2? Bruce E. Kiddoo - Chief Financial Officer: Yeah. I think on the non-GAAP gross margin, we were at 62.8% this quarter and when we look at the next quarter again... Tunç Doluca - President, Chief Executive Officer and Director: You mean60.8% in Q1. Bruce E. Kiddoo - Chief Financial Officer: In Q1,in the actual quarter, correct. And when we look at the current quarter, fiscal Q2 the issue there is really going to be from the overhead absorption. And has we continue to, proactively try to manage inventory and not build too much, we're going to be lowering ... we've been lowering our moves. And so if you think about how overhead absorption works, at sort of, the unfavorable variances drove out over several quarters. And so, we had some impact, due to the lower overhead absorption in Q1, that will continue, that rolls into Q2, plus we have the new in Q2. So, I think a way to think about that is we had about an 80 basis point hit in Q1 due to the lower overhead absorption. You could see that number about doubling, and so we are probably going to be at about a 150 to 200 basis points lower on a non-GAAP basis on the gross margin side. When we look at the OpEx, a key part of that's really going to be how the timing of the execution on some of these items. So, I think that much harder to predict at this time. Clearly, if you look at the last couple of quarters in Q1, we were flat. The prior two quarters were around 1%. And so our goal is to manage that as close as possible, to keeping them flat and, again the kind of the ... the puts and takes this quarter are all cost reduction activities is going to offset by the fourth quarter merit increase and the Mobile-Vision acquisition. Tunç Doluca - President, Chief Executive Officer and Director: Yeah. One point that I'd like to make is that the Q2 gross margin estimate, the wild card there is what we are going to have to do for inventory reserves. So, that always has been one of the changes a lot quarter-to-quarter. And with the future forecast, next 12 month forecast changing so rapidly that's something that could change it one way or the other. Rahman Shah - Barclays Capital: Well, okay. So, you are guiding non-GAAPs. I realize there is a ... may be a higher deviator here. But you are guiding non-GAAP gross margins down a 150 to 200 basis points sequentially. Operating expenses you said would be flat in the quarter? Non-GAAP? Bruce E. Kiddoo - Chief Financial Officer: We basically said there is that we can't, very difficult to tell, right? Because of all of these cost reduction activities until we execute on those and understand exactly what the benefit is going to be. So, all of those are in progress as we speak. And so its very difficult to assess the exact savings we are going to get. My comment to you was that if you look at our past, right, in Q1 we were flat, in the prior two quarters we were up a very small amount. So, clearly that's our goal going forward, exactly where it comes out of Q2 right now depends on how fast we can execute on these initiatives. Rahman Shah - Barclays Capital: I would think if your revenues are down 15%, your operating expenses would be down, may be not the same, just the same amount, but certainly down on a sequential basis? Bruce E. Kiddoo - Chief Financial Officer: And certainly we were pushing on in that direction. I think we had the opportunity to do the Mobil-Vision acquisition. And I think when those kind of ... those strategic opportunities come along, and we thought that was the right think to go do. And so that's probably what's offsetting and otherwise without that we would be down.

Thank you. Our next question comes from Mahesh Sanganeria from RBC. Tunç Doluca - President, Chief Executive Officer and Director: Hello?

Hello? Tunç Doluca - President, Chief Executive Officer and Director: Yes.

You have your phone on mute possibly. Not receiving your response. Tunç Doluca - President, Chief Executive Officer and Director: Okay. Why don't we go on to the next caller?

All right. Our next question comes from Craig Ellis from Citi. Craig Ellis - Citigroup: Thanks for getting me in. Bruce, in the press release on the pre-announcement the company identified that it might use another $750 million to buyback stock. I think the implication there was that it might be debt denominated. Under what conditions would the company think about going out and augmenting or altering its capital structure to take out another big slug of stock? Tunç Doluca - President, Chief Executive Officer and Director: This is Tunç actually answering that question. It really is going to depend a lot on several things. It's going to depend on what the state of the economy and the demand is for our product. And how long the downturn is going to last. It also depends on what acquisitions are presented to us as possibilities. So we are really looking at all the time. It's something that we are considering. But we've really not set a set a condition that's going to trigger debt based buyback right now. Craig Ellis - Citigroup: Are you saying that, Tunç, that at least when you look at something like that, you'd feel more comfortable moving in that direction once you develop the global economy and somewhat stabilized? Tunç Doluca - President, Chief Executive Officer and Director: That would be one of the parameters that absolutely has an affect on whether we want to take on debt or not. Bruce E. Kiddoo - Chief Financial Officer: And Craig, as you know the markets effectively aren't hoping at this point in time anyway so.

Your next question comes from John Dryden from Charter Equity. John Dryden - Charter Equity: Hi, thanks for taking my questions. Tunç, for calendar '09 wireless handsets, are you seeing any slowdowns in your existing customers bringing your 3G design solutions to market? And then the second question for Bruce, could you just provide the clarification for last two fiscal quarters of '09 for the tax rate? I thought you said 31%, but I am not sure. Tunç Doluca - President, Chief Executive Officer and Director: Okay, so I'll take the first part of that question. So, in terms of our cellular customers, they absolutely have put on the breaks for this quarter. But for calendar '09, they're being cautious right now. But, I know that we do have a lot of design wins in these 3G and new GSM, EDGE handsets. So, I believe that they are going continue to make handsets. So, because of our market share gain, I think that should be a good area for growth for us. However, most of them really are currently so focused on what's happening today that they're not really providing any solid forecast for what's going to happen calendar year '09. But most of our growth is going to be filled by the fact that we have increased our market share in that space. Bruce E. Kiddoo - Chief Financial Officer: And then the full year tax rates, we're forecasting 31%. John Dryden - Charter Equity: Thanks for taking my questions.

Thank our next question comes from Krishna Shankar from JMP securities. Krishna Shankar - JMP securities: Yes, in the computing segment, can you give us some sense for when you would expect to retake market share or any designing activities in notebook refresh cycles at spring or in perhaps AMDB's platforms? Tunç Doluca - President, Chief Executive Officer and Director: This is Tunç. I assume you are asking about motherboard power supply products? Krishna Shankar - JMP securities: Right, both motherboards and notebooks power management. Tunç Doluca - President, Chief Executive Officer and Director: Yes, what I meant was notebook motherboard power supply. Maxim really is not much in desktop at all. Krishna Shankar - JMP securities: Right. Tunç Doluca - President, Chief Executive Officer and Director: So, not an area we've put any investments into. So in terms of the notebook, motherboard power management, there are really a lot of the products there have been very commoditized. So we've really have not invested very heavily into that area. So and we're not counting really on being able to increase our market share in any substantial manner. We really want to do so in other areas of the notebook PC and that's our current strategy. Krishna Shankar - JMP securities: So, what are some of the other areas in notebooks you've focused on? Tunç Doluca - President, Chief Executive Officer and Director: So in the notebooks there is, we are focused on are any place that we can have a differentiated product on the motherboard, which is not that many right now. We have many products, many developments and R&D investments going in the display area or display piece of a notebook. We also have products in very... actually very high performance products with very few competitors and the battery, fuel gauging and management area. So, we also have products for... interface products for example for, you say, the drivers. So there is other products that we do make that are interesting to us, and we can differentiate ourselves on the notebook market.

Thank you. Mahesh Sanganeria from RBC come back in the queue. Do you want to see if they have resolved their issue? Tunç Doluca - President, Chief Executive Officer and Director: Can you repeat that please.

Mahesh Sanganeria from RBC, the person that queued up earlier that we couldn't hear. Tunç Doluca - President, Chief Executive Officer and Director: Okay, all right. Mahesh Sanganaria - RBC Capital Markets: Hi guys, can you folks hear me? Tunç Doluca - President, Chief Executive Officer and Director: Yes we can. Bruce E. Kiddoo - Chief Financial Officer: Yes. Mahesh Sanganaria - RBC Capital Markets: Good, okay. I had just one quick question, because most of my question have been answered. When you folks look into next year, calendar '09, at a high level... what do you guys see as a key growth drivers both in terms of end-markets and products, and how would you compare your growth prospects in '09 compared to your peers? Tunç Doluca - President, Chief Executive Officer and Director: Well, okay. So, three difficult for us to be able say, very specific peers now we are going do. But we do have market segments such as the one I mentioned, which is the handset market, where we really had come up with a new line of products last year and have been announcing them in the last few quarters. I believe that that will grow a lot of growth for us for calendar '09. We also have products we are making in the computing market for example for storage. There's new products that we've made that we've acquired actually that are now beginning to ramp because of some projects that just are going into production right now. We've got products we're making for various flat panel displays that we are going to see products, nothing in the future. We also... we will begin to see some times probably towards the end of '09, some of the activities we have in increasing our emphasis of selling our core products, begin to show up, I think for the distribution channel. So, and those changes will be fairly gradual. So, especially the ones through distribution, they take a year or two from the time we get the identification and the design we've done, and that started pretty much last year. So, those should begin to slowly impact us in calendar year '09 towards the end of it. Mahesh Sanganaria - RBC Capital Markets: And if could have a quick follow-up, focusing on the computer segment, when do you folks plan to see a turnaround in your sequential growth? I believe the last quarter your expectation was that you will not see hit around [ph] in notebook second growth until maybe second half of the next year. Is that still true or do you think pretty much see a turnaround earlier? Tunç Doluca - President, Chief Executive Officer and Director: We had said in the last conference call was that during the transition from Santa Rosa to Montevenia, we would see our share of market decline. And we had said that that would last about two quarters or so from the time we've said that. And to answer that there will be some increases because of market share gains in other areas that are non-motherboard. So, I guess two quarters from the time we said it is about fiscal Q3 roughly. Bruce E. Kiddoo - Chief Financial Officer: And I think we are still on track with that obviously the wild card now is obviously the economy and the softening demand. That's going to impact that performance in that business as well. Paresh Maniar - Executive Director, Investor Relations: Operator, I think we'd like to end the call at this time.

Thank you. Paresh Maniar - Executive Director, Investor Relations: Thank you. This concludes Maxim's conference call. We'd like to thank you for continued participation and interest in Maxim. Tunç Doluca - President, Chief Executive Officer and Director: Thank you all.

Thank you. Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Good day. .