Paresh Maniar – Executive Director, Investor Relations Tunç Doluca – President and Chief Executive Officer Bruce E. Kiddoo – Senior Vice President and Chief Financial Officer

Romit Shah – Nomura Securities Uche Orji – UBS (US) James Schiro – Goldman Sachs & Co. Craig Ellis – Caris & Co. Mark Lipacis – Morgan Stanley Tore Svanberg – Thomas Weisel Craig Berger – Friedman, Billings Terence Whalen – Citigroup

Good day, ladies and gentlemen and welcome to the Maxim Integrated Products Second Quarter 2012 Earnings Conference Call. (Operator Instructions) As a reminder, this program is being recorded. I would now like to introduce your host for today’s program, Mr. Paresh Maniar. Please go ahead, sir.

Thank you, Jonathan, and welcome everyone to our Fiscal Second Quarter 2012 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 Litigation Reform Act, I’d like to remind you that 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, anticipated tax benefits and any other future 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’s important to note that the company’s actual results could differ materially from those projected in the forward-looking statements. During the quarter, Maxim’s corporate representatives may reiterate the business outlook during private meetings with investors, investment analysts, the media and others. 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 25, 2011. Copies can be obtained from the company or the SEC. Second, in keeping with the SEC’s fair disclosure requirements, we 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: Thanks, Paresh. I will review our second quarter financial results. Revenue for the second quarter was $591 million, down 7% from the first quarter. All end markets were down equally. Our revenue mix by major market in Q2 was approximately 41% for consumer, 26% industrial, 17% communications and 16% computing. Our consumer market declined due to normal year end inventory management. Our industrial, communication and computing markets were down due to overall industry weakness. Gross margin excluding special items was 60.5%, down approximately three points from the prior quarter due to lower utilization and higher inventory reserves. Special items in Q2 gross margin were intangible asset amortization and inventory write up post some acquisitions. Operating expenses excluding special items were $223 million, flat with Q1. Salary expense increased due to the 14th week, but was offset by lower acquisition and mass expenses. Special items in Q2 operating expenses were primarily restructuring charges and intangible asset amortization from acquisitions. Q2 GAAP operating income excluding special items was $135 million or 23% of revenue. The Q2 GAAP tax rate excluding special items was 26% compared to 23% in the prior quarter, which benefited from certain discrete items. GAAP earnings per share excluding special items was $0.34 down from $0.46 in Q1 due to lower revenue and gross margin. Turning to the balance sheet and cash flow, during the quarter cash flow from operations was $249 million or 42% of revenue. Inventory declined to 91 days from 100 days in the prior quarter. Inventory in the channel excluding catalog distributors declined significantly to 56 days from 67 days in the prior quarter. In dollar terms, channel inventory declined by 16%. Net capital expenditures totaled $77 million in Q2 as we invested in long-term manufacturing capacity and new facilities. As a result, free cash flow was $183 million or 31% of revenue. Share repurchases totaled $72 million in Q2 as we bought back2.9 million shares. Finally, in Q2, we paid $64 million in dividends to our shareholders. Overall, total cash, cash equivalents and short-term investments increased by $56 million in the second quarter to $817 million. Moving onto guidance. Our beginning Q3 backlog is $365 million. Based on this beginning backlog and expected turns, we forecast Q3 revenue of $555 million to $585 million or down 1% to 6% from Q2. This is consistent with our current mix of businesses. Q3 gross margin excluding special items is estimated at 57% to 60%, down from our normal range due to lower projected revenue and associated lower utilization. Other variables that may influence Q3 gross margin include product mix and inventory reserves. Based on the increasing bookings and lower inventory levels both internal and in the channel, we expect gross margin to return to its normal range above 60% after utilizations increased. Special items in Q3 gross margin are estimated at $9 million, primarily for amortization of intangible assets. This excludes potential restructuring activities in Q3. Q3 operating expenses excluding special items are expected to be down 3% to 4% sequentially, in line with the revenue decline. The decline in OpEx is due primarily to lower salary as Q2 was a 14 week quarter, and to a lower bonus accrual due to lower profitability. Special items in Q3 operating expenses are estimated at $7 million, primarily for amortization of intangible assets. This excludes potential restructuring and divestiture activity in Q3. Our Q3 tax rate excluding special items is estimated from 26% to 28%. For Q3, GAAP earnings per share excluding special items, we expect a range of $0.25 to $0.29. Capital expenditures in Q3 are expected to be flat to down over Q2, but still reflect investments and manufacturing capacity expansions, and new headquarters in Dallas facilities. Due to these same items, we expect FY ’12 CapEx to be above our business model of 5% to 7% of revenue. We expect FY ’13 CapEx to return to our business model. Finally, our Board of Directors approved payment of a cash dividend of $0.22 per share, approximately a 3.2% yield at yesterday’s closing stock price. I will now hand the call over to Tunç to discuss our business. Tunç Doluca: Thank you, Bruce. Thank you all for joining our call, and good afternoon. Today, we are conducting this conference call from two locations. Paresh and Bruce are in Sunnyvale, California. Every year, I spend two weeks in each continent discussing our company direction with employees and soliciting input. Today, I happen to be in Munich, Germany as part of this global office visit. Let me start by highlighting three key developments. One, earnings per share was at the high-end of guidance range. This resulted from spending controls instituted during the December quarter and the flood OpEx despite a 14th week of salary expense. Two, our highly integrated products continue to gain traction and accounted for a record 37% of revenue. Three, our R&D investment continues to increase across our target markets. We’re actively managing our portfolio by increasing investments in some product lines and reducing or divesting others. A recent example of this was the sale of our Clock Synthesis and synchronization product line, which allows for increased investments in other areas. We are highly committed to the communications market, and have elected to focus our R&D on more promising product line. Let me next turn to our just completed quarter, and give you an overview of lead times and bookings. During the December quarter, lead times remained unchanged from the prior quarter and bookings, which had been soft during the first two months of the quarter, improved noticeably during the month of December. Ongoing strength in January orders enables us to forecast our business to return to expected patterns in the March quarter. I’ll next provide some colors on our major markets. First, I’ll discuss consumer. The March quarter is traditionally weak in consumer, and we do expect this market to be down slightly. Our long term strategy continues to garner customer recognition and market attraction. We introduced our Tiny product portfolio of high integration analog products at the Consumer Electronics Show. Our efforts in integration have progressed beyond smartphones to tablets, TVs and IP cameras. The portfolio currently consist of five product lines, all of which were well received by customers. We will be adding to this portfolio over the next year. During our last earnings call, we had mentioned potential power SoC design win at two top tier smartphone OEMs. One of these wins has now confirmed, and we will start shipping product later this quarter. We still are waiting the revenue outcome at the second handset maker. The third top tier smartphone maker who has also not been a PMIC customer also recently designed our mini-PMIC into one of their upcoming models. Recently, we expanded our reach to several rapidly growing Chinese smartphone companies. A leading handset maker has designed in our PMIC into one of their smartphones. We also have an audio codec designing win in their low end models. Two smaller Chinese smartphone companies also have designed in our PMICs. We’re partnering our success in handsets into the tablet space. We’ve made a breakthrough at a customer, who was a strong contender in tablets. Their current generation product is enjoying recent success in the marketplace. We’ve captured the PMIC socket in their future generation tablet. Additionally, we have an audio codec design win in a tablet at a Chinese customer. We’re continuing to expand the market for our USB charging solution. We have added two major digital imaging companies as our customers. It will use our products in their digital still camera and their digital video camera. Our solution enables the cameras to charge from virtually any USB source. Shipment will start to ramp late this quarter. Second, let me discuss industrial. We project March quarter industrial revenue to be flat. We expect strong growth in the smart grid and automotive segments, but this strength will be offset by some other industrial segments that had not recovered. I indicated we will see growth in the smart grid segment in the March quarter. This is due to a couple of new ramp-ups in smart meter designs using our power meter SoCs, plus increases in shipments of our precisions real-time clocks used in China meters. Looking beyond the March quarter, we have won another major smart meter design this past quarter. Maxim’s fifth generation 32-bit metrology SoC was chosen by a major manufacture in their needed design for the Brazil smart grid rollout. Over 60 million smart meters are expected to be installed in Brazil by 2020. In the automotive segment, we’ll see March quarter strength due to ramp-ups of existing designs as well as initial production shipments of some new design wins in smart keys and infotainment applications. SensorDynamics’ Keyless go product has been shipping into cars made by two leading European automotive companies, and one North American company. It’s very low frequency, low power consumption characteristics along with ability to detect where the key fob is located when it is close to or within the car, make it a very attractive device for this application. We’re optimistic that this product will continue to win new designs at other car manufacturers. ,: Maxim’s newly formed Industrial Group is focusing on a cohesive plan to provide solutions for smart energy, industrial automation, medical and secure applications. It is also committed to addressing the needs of the broader customer base, people that buy their products through distribution. The formation of this group with the key technologies for the industrial market, data conversion and measurement, interface and communications and security in one organization. The streamlined decision-making will enhance Maxim's ability to provide complete system solutions. Third communications; we project revenue to be down due to weakness in base stations partially offset by the two quarter inventory adjustment ending at our fiber optic module customers. We’re well positioned to win in the Gigabit Passive Optical Network or GPON and fiber-to-the-home markets where we anticipate growth as broadband connectivity increases in China and other Asia Pacific countries. During this period of weakness, the PON business has remained a bright stuff. The fiber-to-the-home rollout in China continued at an increasing rate during the last three quarters driven by higher levels of infrastructure investment. Our large module customers in China have increased their managing capacity significantly in support of the end equipment manufacturers increasing their own rights. We expect this growth to continue in the March quarter. Optical transceivers are one of the several focused product lines for our newly formed communications and power solutions group. Other product lines of significant investment include RF, signal integrity, digital power and cable infrastructure. We are excited about the opportunities available to us in these areas. Fourth, in the computing market we expect the sequential decline again, primarily due to the weak notebook segment. At the conclusion of my prepared remarks, I note that certain market segments, such as smartphones and smart meters have shown great growth during the downturn. We believe that our solid positioning in these markets enable us to outperform our similar size analog/mixed-signal peers from peak to trough. Our balanced business model is proving resilient again. I will now turn the call back to Paresh.

That is the end of our prepared comments; we would now welcome your questions. Please limit yourself to one question with one follow-up. Jonathan, please begin polling for question.

(Operator Instructions) Our first question comes from the line of Romit Shah. Your question please. Romit Shah – Nomura Securities: Thanks. And Bruce, could you just clarify your comments around utilization, you said your gross margin would get back above 60% when utilization turned up. Was that – have you seen that, that happens in the June quarter. Maybe some color on utilization, Bruce. Thanks. Bruce E. Kiddoo: Sure. Utilization were clearly down in Q2, they were actually at about 72%, down from 89% in Q1. And as you know, Romit, there is about a one quarter lag with an unfavorable variances rollout over the current quarter and the next quarter. From a utilization point of view, when we look at Q3, Q3 fab utilizations are looking flat right now. They may be up depending on the – if we see some continued strength of bookings. But what we’re seeing here is, for industrial products the utilizations are increasing with the improvement in the business. On the consumer side, for those products, kind of a – there is a shift in demand from our older products, which are primarily build internally to our newer products, which are primarily built a foundries. And so, we’re ramping increased internal production of our newer products starting in Q4. So that should help out as well. So when we get into Q4, we think utilization should be up. On the test side, utilizations are increasing in both Q3 and Q4. So based on that, it’s difficult to call exactly when the margins will get back over 60%, obviously it will be shortly after utilizations increase. However, if the bookings momentum continues as we’re seeing right now, it’s our expectation that Q3 will be the bottom for gross margins. Romit Shah – Nomura Securities: I guess as a follow up, if I go back and look at previous quarters, September, you guys generated close to 30% operating margins on revenue dollars around $630 million. And if you get back to $630 million, it would seem that you’d need incremental operating margins north of 100% in order to get back at 28%, 29% EBIT margin. And just like something is weighing on the P&L that wasn't there back in September. And I don't know if it's a utilization issue or something with OpEx? Bruce E. Kiddoo: Yeah, it's really just the utilizations. I mean, if you look at the – back in September, OpEx was $223 million, based on where we’ve guided Q3, OpEx is about $215 million. So we’ve have done a good job of managing our OpEx from that point of view. So really what happened is, in September the gross margin was at 63.7%, and that's when we had utilizations at 89%. So since those utilizations have come down, gross margin has come down, as utilizations come back up, we're clearly seeing strength in the business from a bookings point of view, we're at low levels of inventory both internally and in the channel. We expect utilizations to come back up. So I think it's a gross margin story, I think it’s just due to the lower utilizations, and I think we're seeing those numbers coming back up. The other point just to highlight from a gross margin story, as we expected or we’re worried about kind of going into the quarter now with inventory reserves, and we did see about a point impact in the second quarter due to higher inventory reserves, which as you know is due to kind of the 12 month forecast looking forward, and that's done in the December quarter. And so, our business unit folks are usually a little conservative during the downturn. So we ended up with a higher inventory reserve in the second quarter. Romit Shah – Nomura Securities: Okay, great. And then just final question for Tunç. Given that your business held up so much better from the peak to the trough. Do you think that has any impact on how quickly you recover off the bottom relative to some of your peers? Tunç Doluca: Well, from a recovery standpoint, we are seeing some similar results in terms of our revenue ticking up. Three points to really make here that are important. First of all, we too have experienced a meaningful bookings upturn since December, pretty much in line with what some of our peers have been saying. Number two, polling of our major customers indicates inventories are pretty much depleted both in the distribution channels and at our customers. Number three, cancellations are at historically normal levels. So all of those are indications that our customers are going to start buying product from us and getting back to the consumption level. So from our viewpoint, we see the demand definitely recovering from December and January to date. However, our product mix is different from many of our peers, so differences in timing are expected, and I’m not surprised by it. For instance, our mobility business is quite significant compared to some of the peer companies that we compete with. And in general, Romit, we are seeing what other people are seeing, and we believe that we’re returning to our normal seasonality. If you look at historically, our Q3 or March quarter has got big swings in it, but it has been typically down in Q3. The average is about 5% down. So a little bit better than that actually in our guidance. And Q4 is usually a stronger quarter for us. So we’ll kind of see how it goes, but we are cautiously optimistic.

Thank you. Our next question comes from the line of Uche Orji. Your question please. Uche Orji – UBS (US): Sure. Thank you very much. Tunç, let me start off asking you about the industrial segments, you just called out smart meters and automotive, but you also talked about areas that were yet to recover. So as you kind of go through that market and look out the future, what are the specific areas where you expect some recovery, and just can you talk to us about your level of confidence in this regard? Tunç Doluca: Sure. So let me just summarize it, so we’re all on the same page in the call here. So what we basically said that we were seeing strength in our utility meter market, we’re seeing strength in automotive market. However, some of the other industrial segments like medical is expected to be slightly down, and other segments are kind of very widespread. So it’s kind of really hard to say exactly which one of those segments is showing some weakness. But my view is that, these other markets that have not quite recovered yet are going to recover just like everybody else. But exactly how, when that’s going to happen, we’re not that sure. But I can surely tell you that the order levels and bookings were pretty much up in most of the markets in industrial. So I think this inventory correction that we’ve seen looks like its hit its bottom, at least hopefully in this quarter. Uche Orji – UBS (US): Let me switch gears, and ask you about the smartphone customers you mentioned for the Chinese customers. Any concept, any comments you can make about it, content that you have in some of these new Chinese customers. And any comments you can make as to what you think the ramp pattern or contribution to revenue will be? Tunç Doluca: Sure. So for the Chinese customers, our initial design wins are really with products that are really not very high in average selling prices. And the revenue ramps should be pretty much in the near future, meaning this year sometime. They’re new in this market and how successful they will be only time can show us. So we’re forecasting revenues for them. But I should say that we’re being cautious in our forecast, because how successful they are will depend on how good those models are. And we don’t quite have full visibility to be able to figure out what kind of features they have, and how accepted they will be by our customers. Uche Orji – UBS (US): I guess, I’m trying to get what is going to be margin diluted for your communications business? Tunç Doluca: No, they will not be. I mean we – as in almost all of our markets we’re really getting into sockets where we really have value to add to our customers, whereas they desire the functionality, space savings, or the power consumption. And when they evaluate, we get the proper pricing and the proper value and margins for our products. Uche Orji – UBS (US): All right, thank you very much. Tunç Doluca: You’re welcome.

Thank you. Our next question comes from the line of James Covello. Your question please. James Schiro – Goldman Sachs & Co.: Good afternoon, it’s Jim Schiro, just getting it for Jim Covello. Just one question on the telecom end market, especially, on the wireless base station side. I think there has been some peer reports kind of suggesting that might be weak for a little bit – a little while, what’s your own view on what your customers are telling you on the base station market, when that might begin to recover? Bruce E. Kiddoo: So base station market, we started seeing weakness in the December quarter, and I think that that’s going to continue for a bit. Exactly how long, we don’t know. But there seems to be a lot of weakness in terms of what we hear from customers, and we’re also hearing and listening to some other reports coming out from those OEMs. So all of those are indicative that there will be some continued weakness in the base station market. James Schiro – Goldman Sachs & Co.: That’s helpful. Thanks. And then as a follow-up, could you give us an idea as to update on the status of your touch control product, and whether you expect a significant pick up in attach rates to either just the discreet product or with your power management this year? Bruce E. Kiddoo: So, okay, let me first answer the second question you asked. From my point view, technologically, it’s a little bit early to integrate that function right now. We need to get some more experience with our discreet single chip designs before we actually put them into a power SoC. So that shouldn’t really be expected in the near future. In terms of our performance in the touch controller market design wins and so on, we’ve really had a quite a few starts and fits in that market. So I really think that, since it’s developing much slower than we anticipated, until we have revenue, we really don't want to discuss any details about customers or design wins. We’ve done this in the past ones and designs, some of those programs got cancelled or delayed significantly. And I think, we’ve sent signals out that we probably should not have. So I feel a bit humbled about this, but we’ll wait for the revenue to pick up before we comment more. James Schiro – Goldman Sachs & Co.: Understand. Thanks so much for the color. Bruce E. Kiddoo: Sure.

Thank you. Our next question comes from the line of Craig Ellis. Your question please. Craig Ellis – Caris & Co.: Thanks guys, I appreciate taking the question. First on the consumer outlook, with that being down a little bit, that sounds like a little bit better than normal seasonality, just given the waiting that the handset business has in that part of you mix. As we think about the handset business, and as you think about the sequential pattern in the business for the March quarter, can you tell us what kind of incremental traction you’re seeing either with new OEMs or with new products in existing OEMs or what you’re seeing as the business, it sounds like it’s diversifying more towards a business that’s got more tablet exposure rather than just tablet or rather than just smartphone? Tunç Doluca: I would still say that the vast majority of our revenues is coming from the smartphone market, and not – maybe some tablet wins, but those are really glowed by what we do in smartphones. In terms of your observation that it's going to be maybe down less than it has been in previous Q3, is that certainly the case? Some of these are, I mean most of these products by the way are mostly existing platforms. Usually, our customers ramp more into production with newer models in the June quarter. So most of the selling that we have is coming from existing designs and existing models. Craig Ellis – Caris & Co.: Thanks for that, Tunç. And as a follow-up, I’m not sure this is more for you, for Bruce, but with the best future comments that were made earlier. How should we think about the way that you’re looking at that. Is that a decision that’s being driven primarily by the margin structure of a particular business, the growth parameters of that maybe whether or not there’s a platform fit with other business. What are you looking at, and how material could those divestitures be as we think about what you might do on a full year basis? Bruce E. Kiddoo: Well, this was the first one that we’ve done, first of all. So we’re kind of getting experienced in this area. I don’t think this is going to be a significant activity in the company. We look at the items that you mentioned, but the most important item for us is to make sure that we have enough resources in the product lines that we want to be in, and it can be a major force in the product lines that we want to be in. And not really be a small player in some of these other product lines, even though they might be quite profitable. So the short answer is, we look at the growth prospects with the amounts of investment that we have in a particular product line. And if we see that we need to invest a lot more, then we decide that it might be better to take those resources and really invest and focus them on the product lines that will show more growth opportunity for us. But I don’t think you should really model this because we’re not really in the business of divesting product lines. We did this because it seems like it was the right thing to do, and it was the right thing to do, both for our customers because they did continue to get support. It was the right thing to do for our employees, as well. Because they would find homes in another company where it’s a major focus product line, rather being a small one in our company. But in no way, I think should you model this is something that we’re going to do vast amounts in the future. We might do one or two here and there, but not really big ones. Craig Ellis – Caris & Co.: Got it. Thanks for the color you talked to us. Bruce E. Kiddoo: It’s all right. Thank you.

Thank you. Our next question comes from the line of (inaudible). Your question please.

Thanks for taking my question. Tunç, the question is specifically on your top tier 1 mobile phone customers. I’m wondering do you expect the content per phone and those customers to be sort of flattish or up or down in 2012. And what specific features that will drive those trends? Tunç Doluca: I see. So, if the major or highest volume customers, we were integration more and more functions especially into our PMICs and into our power SoC products. So they’re getting more massive and more functionality per chip. So in general, the content or average selling prices are going up, and are expected to go up this year.

Any estimate, any rough sense by how much? What was it last year, and roughly how much it can go up this year? Tunç Doluca: I’d rather keep those as proprietary information, and not really reveal that. We don’t want to do it for our own safe, but we also don’t want to do it because our customers don’t like us doing that.

Got it. And then just one quick follow-up if I may, I’m curious how we reconcile the strength that you are seeing in smartphones, but the weakness you are seeing in base stations, do you see any excess inventory of base stations as it’s concentrated in certain regions, and really how long can there be a disconnect between a very strong phone sales but weak base station sales? Tunç Doluca: Well, logic would say that you can’t have a major disconnect for a very long time, otherwise you’re going to run into all kinds of capacity issues with all the data demands that come from these smartphones that are growing at tremendous rates every year. In general what we believe is going to happen in the future is that, what we call macro base stations or a traditional base station that’s known today. It’s going to probably give some way to smaller base stations that really, especially in metro areas elevate the capacity requirements. And these are called micro base stations, there is all kinds of names and/or Femto stations even all the way to the consumer. So we believe that, that’s an area that’s going to grow in the future, and that might be a way to really increase the capacity with our installing a very large amount of macro or large cells. So we expect that to be a trend in the future.

Okay. Thank you. Tunç Doluca: Sure.

Thank you. Our next question comes from the line of (inaudible). Your question please.

Hi, thank you. I wonder if you could revisit some of the comments you made about channel inventory, and talked about the 15% reduction in channel inventory. What does that mean in terms of revenue impact for you, and I guess the nature of the question is trying to get some idea about how far below consumption your current revenue run rates are indicating? Bruce E. Kiddoo: Yeah, so this is Bruce. So as I indicated in my comments, DOI actually declined from 67 days to 56, and the absolute dollars in the channel declined significantly by 16%. And I think that was the right thing to get those, to kind to get the inventory levels in place. Overall, existing revenue for us was actually down inline with the kind of the corporate decline of around 6%, 7%. I think most importantly it is kind of the forward-looking trend in that. Resales were actually up 1% in the quarter from what was a little surprising for us. We thought it was going to be a little weaker, and we saw some good strength at the end of the quarter, at the end of December as resales started to pick up. End market bookings were up 10%, and bookings on Maxim were up 23%. So all of the indicators are that, this is a channel that reduced inventory significantly over the last couple of quarter, and now we are seeing momentum from the end customers from a bookings point of view, from a resales point of view. And so we expect that to start to recover. The 56 days, I mean we like to be at above 65 days, that’s where our customers prefer to run their business at. So I think there is some opportunity there for restocking in the channel.

Okay. Thanks. And as a follow up on that, just for you comments on utilization and what that would mean for gross margins. And is it correct to assume now if utilization does in fact go up in Q4, then we should start to see the gross margin impact on that on Q1 and beyond. I think that’s the pattern that was followed during the 2009 downturn period also? Bruce E. Kiddoo: Yeah. I mean clearly there is about – the benefits of those increases in utilizations are spread over the current quarter and the following quarter. And so, you’re right that we expect to see, as utilizations go up, we’ll see those improvements in gross margin. As we indicated – if the current bookings momentum continues, we actually expect Q3 to be the bottom from a gross margin point of view, and we should be able to see improvement in gross margin in Q4 as well as the first fiscal quarter.

Thank you. Tunç Doluca: Yeah, I think. Let me add something to that. One of the most important things that I think Bruce did say in his prepared comments was that, the way we’re going to improve utilizations is going to be twofold, one is obviously the booking strength continues in industrial. So that will load up some of our fabs that are – I would call our older fabs. But we’re also working on our news technology, which is as Bruce said, mostly sourced by our strategic foundry partners. And we’re working to quickly qualify that process in our internal fabs as well. And by the way, that also is a reason why our capital spending is high right now, so that we can have this flexibility in being able to move these technologies between our internal fabs and our strategic foundry partners. So there’s really two things that needed to happen, and one of them is controlled by us – by us being able to qualify the process, the new process. And the other one is controlled by the demand of our older industrial products. So those things did line up, then what Bruce said is going to happen.

Thank you. Our next question comes from the line of Mark Lipacis. Your question please. Mark Lipacis – Morgan Stanley: Thanks for taking my question. Bruce, just to make sure I understand your explanation of the last question. Are you guys of the view that the strength in bookings that you’re seeing in December and January, that’s driven by end market demand coming back or are we stocking inventories? Bruce E. Kiddoo: I mean, it’s always hard to figure that out exactly, but certainly we’ve seen end market bookings increase. In the December quarter they were up 10%. And we’ve seen that trend continue in January, strengthen the end market booking, so that would be an indicator that it’s end market demand. We’ve also seen as we’ve said, kind of the bookings on Maxim increase substantially as well. So I think it’s going to be a combination of the two, as we get the days back over 60 towards the mid-60s range. But we’re also, I think the reason that – these have started to increase their orders on us, but I think they’re feeling much more confident about the end market demand. Mark Lipacis – Morgan Stanley: Okay, fair enough. That’s helpful. And then on the CapEx comment for the fiscal year being above normal, is that a statement on the last two quarters of fiscal year also or is that just the aggregate fiscal year? Bruce E. Kiddoo: That’s just the aggregate fiscal year. Our normal model is 5% to 7%, we’ve achieved that, I think the last three years. This year with the investment that Tunç mentioned as far as our newest process technology and making sure we have a balance both internally and externally. We’ve been making those investments in the September and the December quarter as well as the new facilities here in Sunnyvale and in Dallas. That’s what’s going to increase above that 5% to 7%, probably in the high single digits it might go into the low double digit. But then when we look out to fiscal ’13, we expect to be back within our long-term model. Mark Lipacis – Morgan Stanley: Okay. Thank you very much.

Thank you. Our next question comes from the line of Tore Svanberg. Your question please. Tore Svanberg – Thomas Weisel: Yeah, thank you. First question and sorry for coming back to gross margin, but could you just give us a relative contribution from the three items that are lowering gross margin in the March quarter, meaning, utilization, mix and the inventory charges? Bruce E. Kiddoo: Yeah, it’s actually easy Tore because it’s pretty much all utilization. From a mixed point of view, we’re not seeing too much of a delta there. From an inventory reserve, we’ll probably get a little bit of a benefit there, but there is some other kind of puts and takes on that. So the primary driver is the utilization. Tore Svanberg – Thomas Weisel: Very good. And also on CapEx, could you also be a little more specific about how much has been spent so far. I’m just trying to understand between the new equipment, the new class of technologies and then also the Dallas headquarter, like how much is being spend now versus how much you still have to go? Tunç Doluca: So I think, these are numbers in front of Bruce, so Bruce can you take that one? Bruce E. Kiddoo: Sure, I think if your question is, when will we complete these projects? We’re expecting the majority of these projects to be completed this fiscal year. In our Dallas facility, they’re actually starting to move in this weekend. In the Sunnyvale facility, I think the date is May, a lot of the CapEx on the new S18 capacity in San Antonio has been spent. And as Tunç says, we’re just in the process right now of qualifying and ramping up production, which is expected in the fourth quarter. So from a CapEx point of view a fair amount that has been spent, there will be some. All right, we’re continuing to look at the investments in our Oregon Fab as well and some of that was spill over a little bit into FY’13, but in general if you sort of look what we’ve spent so far today, we’ve been running probably around 10% or so, 10% of revenue. And depending on the timing, we’ll probably come close to that for the fourth quarter as well. And therefore, that’s were we’ll see, we’ll probably end up right in that kind of high single digits or low double digits for the year. Tore Svanberg – Thomas Weisel: I appreciate it, thank you very much. Tunç Doluca: Yeah, one other item, also the test facility is expected to be completed by the end of this quarter as well, so… Tore Svanberg – Thomas Weisel: Great, thank you Tunç. Thank you, Bruce. Tunç Doluca: Yeah.

Thank you, our next comes from the line of [John Webster]. Your question please.

Hi, thanks. Maybe just a continuing line on the factory network. At the end of 2010, it seemed like you have about maybe $600 million to $630 million of revenue capacity. Can you give us an estimate of what you think that could be over the next year? And then I have a follow-up. Tunç Doluca: Sure. I don’t have the number right in front of me. But it is substantial, I believe it’s around $800 million a quarter right now. So the benefit obviously of our strategic foundry partners is that, these are some large digital fabs which have significant capacity, and they’ve been tremendous as we’ve seen a current example, as we’ve some very strong acceptance or continued acceptance for consumer products in our newest process technologies. And so, our strategic foundry partners have – we acted very quick, and we’ve able to meet those upsides that we’ve seen. And so, I think that the model continues to work as planned.

And Bruce, $800 is what you currently have or what you expect to have by the end of this year or some other time frame? Tunç Doluca: Yeah actually, while Bruce was talking, I found the numbers. They’re – what it looks like is about $900 million actually in terms of equipment capacity. This is total by the way, internal plus our foundry partners.

Okay, great. Thank you. And then in terms of the bookings progression, you said it got stronger in January. Is there a time when you expect your lead times to go out and/or are there certain parts of your business in terms of application areas where lead times are still tight or you’re getting rush orders? Tunç Doluca: In terms of our lead times, the lead times that we are capable of quoting to our customers actually have come down slightly from last quarter. It’s about six – little below six weeks now. Our customers are still ordering, and a longer lead time than that. So we’re not in a rush order situation as of yet. But if the bookings strengthen more, depending on the mix, we might have some. We have sufficient capacity, so it’s really a matter of how much ahead of our manufacturing cycle time we get, heads up on when to start wafers for a particular demand. So right now, there is – at Maxim there is no queues or no excess wait times for any orders.

Okay. Thank you. Tunç Doluca: Sure.

Thank you. Our next question comes from the line of Craig Berger. Your question please. Craig Berger – Friedman, Billings: Hi, guys. Thanks for taking my question. I appreciate it. On the new smartphone customers that you talked about for your smartphone power management chips, can you give us a sense of how big those opportunities might be or what you might expect to see your mix of existing customers versus new customers as we look out over the next few quarters? Tunç Doluca: Well, most of these are new design wins. And frankly, it’s really tough to estimate how many of these new models, each of these customers are going to sell. So forward-looking, it’s very difficult to say how our mix is going to change by customer. You can see how quickly market shares shift in that market if you just watch it for a year, it’s just very rapidly. And not only that, within each company, even they have difficulty predicting which model is going to win. And since we don’t have 100% of the sockets with these new customers in terms of different models, it really is very tough for us, correct to be able to predict how much we’re going to diversify the business. But obviously, one of our goals is to make sure that we’ve got multiple customers for these products and we’ve been working at that. But I am afraid, I won’t be able to tell who – well, how it’s going to distribute between these new customers that we won versus the ones that we already have as mainstream for us. Craig Berger – Friedman, Billings: Given your success, what kind of competitive response have you seen from some of your other larger competitors? And then my follow-up question was, I just wanted to understand how is distribution doing generally apart from the sort of down cycle? How much is it as a percentage of revenue now and how much was it if you look back over the last couple of years? Thanks so much. Tunç Doluca: So in terms of competition in the handset market, obviously, it is a large target for our major competitors. There is significant competition at the block level designs, but that was to be expected. That’s why most of our business continues to shift to more highly integrated parts where we do enjoy the advantage of having fewer competitors in the market. Our main competitors and most of these customers continue to be clearly the base band and where they make it, the application processor companies. And then maybe a couple of other companies that really have shown that – especially, at the low-end they can make some of these products, meaning, less levels of integration. So I guess the summary is, there is some competition, but it’s not that large as of yet. In distribution, we’ve a very good result in the last year. I think in terms of the numbers, I don’t have those in front of me, so I’m going to let Bruce answer those for you. Bruce E. Kiddoo: Sure. So in the quarter, distribution was 28% of revenue. Prior to the downturn of industrial the last couple of quarters, distribution was running over 30% of revenue and that compares to kind of a [pre-adamant] relationship, we were probably running under 25% of revenue. So we’ve seen a significant improvement there. Probably the best data point to show that was our fiscal year ’11 where we grew 24% as a company. That was a very good year. Our distribution business grew 43% year-over-year. So that market – that strategy continues to do well, some of our leading indicators the number of new customers that we’ve got into our design registration program has exceeded over 3,000 new customers at this point in time. We’re starting to see material revenue coming from that design registration program where they go and find new customers for us. So I think most of the, kind of the leading edge metrics for our distribution strategy continue to be positive. Craig Berger – Friedman, Billings: So much.

Thank you. And our next question comes from the line of Terence Whalen. Your question please. Terence Whalen – Citigroup: Hi, good afternoon. Thanks for taking the question. This question is a little of a higher level longer-term question, it seems to me like your top two customers will probably increase as the percentage of your sales from – would then close from 10% to 20% between 2012 and 2011. My question is more broadly as we see higher customer concentration, how do you workout from a tactical management point of view, the additional burden of technological resources after working with your customers on next generation projects? Thank you. Tunç Doluca: Okay. So first of all, I want to make sure that I’m not confirming that you said, I don’t think we’ve ever given out numbers on how larger the sales we have on our top customers. So I think that we’re growing at these customers, so obviously, we have talked about that and you can see it in our relative high growth of our handset business. From a technology standpoint, clearly, for those types of products, we do have to develop newer technologies at a fast pace. And we definitely have programs to be able to do that. Those technologies are also major differentiators for Maxim’s why we keep it in-house. But definitely you are right, it is something that we talk about, discuss and make plans for. And this applies both to process technology for wafers as well as packaging technology because all of those push the edges of the envelope. The good thing is that is a challenge, obviously that we have to be on that treadmill. But it’s also a big benefit because those technologies eventually give us an advantage in other markets as well because they form the basis of similar technologies that, either going to come and be needed by other markets, such as communications and industrial after a while. So it is a more difficult technology challenge to master, but that’s why we are here. I mean we have to master those challenges, so that we can stay ahead of our competitors and grow the business. And as I said there is definitely a benefit to our other product lines and other market segments as well. Terence Whalen – Citigroup: Thank you. Bruce E. Kiddoo: Hi, Terence. Terence this is Bruce, I just want to add. As well with these large customers right, the ability to kind of take a holistic approach, right and really from a design product definition point of view through execution, through supply chain management, quality assurance manufacturing. All of those things that are required to be successful, that large customers clearly that discipline in those processes we put in place, help us with all of our customers. Right, and these are significant improvements we’ve made over the, probably the last three to five years and that’s benefited us across the board. Terence Whalen – Citigroup: Okay, thanks, terrific. It sounds like the experience in the top tier has recently brought us the rest of the customer base. Maybe if I can just follow up with very few administrative questions with regard to that, what percentage of your revenues were from integrated products in the December quarter? And then in addition, can you talk in very general terms about how quickly it takes to spin a new product at your top smartphone customer. What’s that design cycle like, how much are you converting existing IT and then just adding a little bit more just to understand the configurability of that? Thank you. Tunç Doluca: Let Bruce give you the percentages, and I’ll give you the commentary. How is that? Bruce E. Kiddoo: So it about 37% in the December quarter and now it was about, about half of that was in consumer and the other half was kind of equally split between compute, comm and industrial. Tunç Doluca: So on the general commentary on our product development and ramp cycles, these products are, some of the new ones are fairly complex. They are all the way up to 200 IOs for power management IC. And the development times are fairly short for products like that. But you’re still look at a year or over to design these products in Maxim, and then the ramp-up times really are relatively fast. So within – between the time we announce the product and it’s reaching at steady state revenue, it takes anywhere from six months to a year. So you can see that that’s quite rapid compared to our typical market. And they have product life’s that depending on how specific it is to a phone line, they have product life’s of a few years, I’d say maybe a couple of years or so. So it’s pretty rapid pace to get the design and then to win and then eventually you have to replace it with something else. Terence Whalen – Citigroup: Very helpful, thank you.

Jonathan, we will make that the last question. This concludes Maxim’s conference call. We’d like to thank you for your participation and for your interest in Maxim.

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