Guido Pickert - Director of IR Paul Hyland - President & CEO Wolfgang Breme - EVP & CFO

Uwe Schupp - Deutsche Bank Andrew Huang - Sterne Agee David Mulholland - UBS Christian Rath - HSBC Bill Ong - Merriman Capital Andrew Abrams - Avian Securities Olga Levinzon - Barclays Capital Sandeep Deshpande - JPMorgan Janardan Menon - Liberum Capital Peter Knox - Societe Generale Adrian Hopkinson - WestLB Tim Arcuri - Citigroup Alla Gorelova - Steubing AG Josh Baribeau - Canaccord Adams Maxime Mallet - Natixis Securities Guenther Hollfelder - UniCredit

Good afternoon, ladies and gentlemen, and welcome to AIXTRON first quarter 2011 results conference call. Today’s call is being recorded and I would now like to hand you over to Mr. Guido Pickert, Director of Investor Relations at AIXTRON, for opening remarks and introductions.

Good afternoon and good morning everyone, and thank you for attending today’s call. With us today are Paul Hyland, President and Chief Executive Officer of AIXTRON, and Wolfgang Breme, Executive Vice President and Chief Financial Officer of AIXTRON. As the operator indicated, this call is being recorded by AIXTRON and is considered copyright material. As such, it cannot be recorded or rebroadcast without express permission. Your participation in this call implies your consent to this recording. As with previous results conference calls, I trust that all participants have our results presentation slides, page two of which contains the usual Safe Harbor statement. I will therefore not read it out, but would like to point out to you that it applies throughout this conference call. You may also wish to have a look at our latest IR presentation, which includes additional information on markets and technologies. This call is not being immediately presented via webcast or any other medium; however, we will place an audio file of the recording or a transcript on our website at some point after the call. Let me now hand you over to Paul Hyland, AIXTRON’s President and CEO, to start the actual conference presentation. Paul?

Thank you, Guido. Ladies and gentlemen, good afternoon to those of you calling in from Europe, good morning to those joining us from the U.S., and good evening to investors calling in from Asia. I would like to welcome you, on behalf of AIXTRON’s Executive Board, to the presentation of our first quarter 2011 results. I’m going to kick off the presentation by giving you an overview of the financial highlights of the first quarter 2011 and then I’ll give you a little color on how the market, and in particular, our new products, have developed during this last quarter. When I’ve finished, I’ll hand you over to Wolfgang Breme, our CFO, who will then take you through some important aspects of our financial and business performance, before I close the presentation by discussing our prospects and going through the detail behind our 2011 guidance model. Let’s now look at some financial highlights for the first quarter 2011 on slide three of our presentation. This slide compares the first quarter of this year to the first quarter of 2010. Driven by a continuing high level of demand for LED deposition equipment, our first quarter 2011 revenues increased by 33% year-on-year to EUR 205.4 million. On a year-on-year basis, we benefitted from a small currency effect as the USD/EUR average exchange rate we used for Q1 2011 was $1.36 to the Euro, or about 3% stronger than during the same period in 2010 when it stood at $1.40 to the Euro. In line with the positive revenue development, our gross profit increased by 34% year-on-year to EUR 104.2 million in Q1, resulting in a gross margin of 51%, one percentage point higher than at the same time last year. Our EBIT came in at EUR 74.9 million, which is EUR 28.5 million or 61% higher compared to the same period of the previous year. This equates to an EBIT margin for the first quarter of 2011 of 36%, 6 percentage points higher than Q1/2010. Accordingly, our net result rose by 64% to EUR 52.3 million and our EPS rose by a similar percentage year-on-year, to EUR 0.52 in Q1 2011 in comparison to EUR 0.32 in the first quarter 2010. Q1 2011 equipment order intake is also up by 25% against last year’s Q1, to EUR 210.3 million. This is the third quarter in a row we’ve seen order intake at this level and the eighth sequential quarter in which we have posted an increase in order intake. For the record, the U.S. Dollar denominated part of our 2011 order intake is, as a matter of company policy, converted into Euros at the budget exchange rate for 2011, namely; $1.35 to the Euro. Given the continued economic and market volatility, compounded by recent natural disasters and political uncertainties, we are very pleased indeed with the continuing high level of demand. The steady inflow of orders in recent quarters is reflected in our very solid order backlog, which increased by 40% on last year’s end of Q1 figure, to EUR 321.1 million as at March 31, 2011. Free cash flow was down 83% year-on-year, from EUR 67.8 million in Q1 2010 to EUR 11.7 million in Q1 2011.·Some of this decline is due to the positive trend we have spoken of before, namely the arrival into this market space of bigger corporate customers who however are only willing to pay significantly smaller deposits than we have seen in the past. Some of the decrease also reflects the growing proportion of customers who can present stronger evidence of their financial durability and consequently are also able to negotiate and pay acceptably smaller deposits. I’m going to leave it to Wolfgang to talk through more of the details behind this movement, but needless to say, we remain confident that we have sufficient cash to support the business needs going forward. Reflecting that strength; cash including cash deposits increased to EUR 394.8 million as of March 31, 2011 compared to EUR 384.7 million as of December 31, 2010, and this is after us having already paid in advance the majority of the investment into our new R&D center, namely EUR 39.5 million in 2010. Let’s now move on to slide 4 and have a look at the sequential developments between Q4 2010 and Q1 2011. I’m not going to go through all of the numbers on this slide, but let me touch on some that I believe you will be focusing on for different reasons. First of all, the revenue figure and the free cash flow, and then a third; the order intake, which I think, just as a number doesn’t tell the whole story. After seven sequential increases in revenue, the EUR 205.4 million of revenue we recorded in Q1 represents a decrease of 9% on the prior quarter. In the context of the average shipment volumes increasing and the volatility in the market, this is not a big drop, but it is nevertheless a drop. 9% is 9%. I would like to remind you, however, that we did prompt you that you shouldn’t, in our opinion, either get excited or scared if you see fluctuation in either demand in our numbers during 2011, because we expect that in 2011, there was, with bigger order quantities and new players on steep learning curves, a greater likelihood to the quarterly fluctuation. As you will hear later, we didn’t see anything in this last quarter to dissuade us from our belief that 2011 will be another very good revenue year for AIXTRON. The story specifically behind the negative free cash flow figure of Q4 2010 can be quite easily explained. In Q4 2010, we’ve spent more than EUR 30 million mainly on advance payments for our R&D center, as I have already mentioned. We made a large scheduled tax payment of EUR 35 million and we consumed previously received customer deposits in the range of EUR 49 million. Those cash outflows were not offset by the cash inflow from net income. As I said earlier, Wolfgang will explain in more detail later on in his part of the presentation. One final comment I want to make about this sequential comparison is on the 3% increase in order intake. If the 9% sequential decline in revenue isn’t significant, then I should say that the 3% sequential increase in order intake isn’t significant either. But what is pleasing however, is the composition of those orders. You will recall me drawing a parallel with the launch of our G4 and CRIUS products back in 2005 and how, as a benchmark, the 12 months after the launch, 60% of the orders we were receiving were for these new generation products. Gartner has just published their 2010 MOCVD market share report showing AIXTRON as having 56.3% market share, which is in line with our expectations for 2010. One of the main factors behind the decline in market share we experienced in 2010 was the order delay effect that follows the introduction of any new generation product. This is due to the time that customers need to evaluate and test the product and then migrate their processes. We launched the G5 in February 2010 and the CRIUS II slightly later in the year. In our experience, with the introduction of new generation systems, which the G5 and CRIUS II are, rather than just iterations of previous generations, customers typically take up to 12 months to assess, qualify and execute on a migration plan. That is the way it has been this time as well. So let me now give you an update on the progress we are making in the adoption by customers of these latest generation products. In Q1 2011, the new generation systems revenue percentage has risen to 54% and the order intake percentage has risen to 65%. This is actually a faster customer adoption rate than we saw with the previous generation. The other market share factor that also made life a little more difficult for us, was that it was in this sensitive product transition period when Chinese subsidies kicked off a substantial and immediate investment cycle. However, we are now through that transition period and China will unquestionably be the biggest revenue region for us in 2011, and where, as you might expect, we will continue to increase our investments. It is also interesting to note that although the Chinese market has in the past been predominantly a vertical deposition technology market. As Chinese customers begin to move towards more technically challenging material structures, we are beginning to see an increase in Chinese customer interest in the G4 or G5 planetary technology in single and clustered configurations, encouraged by the increase in inward migration of Taiwanese experience and expertise through the Chinese subsidy programs. We are now back in the position we want to be in and where we have the leading edge products and the technology to deliver market share leadership in all our chosen end-markets. Let me now pass you over to Wolfgang, who will talk to you in more detail about the Q1 2011 numbers. Wolfgang?

Thank you Paul and hello to everyone. As Paul already went through the key figures, I would like to focus on a few numbers on slide 5 which I think are worth looking at more thoroughly. First, operating costs, which decreased by 7% against the first quarter last year, as well as sequentially against Q4 2010. Relative to Q1 revenues, they remained at 14% sequentially, but decreased by 6 percentage points against the first quarter last year. This was due principally to a significant reduction in selling expenses by 10% to EUR 10.6 million during Q1/2011, from EUR 11.8 million a year earlier, mainly against the backdrop of lower sales commissions, higher portion of final acceptance sales, and lower increases in discretionary expenses. Comparing sequential quarters, compared to Q4 2010 or EUR 9 million, selling expenses increased in Q1 2011, partially due to an adjustment to the warranty provision required in Q4 2010 and regional product mix. Selling expenses relative to revenues decreased year-on-year by 3 percentage points to 5% compared to 8% in Q1 2010 and increased sequentially by 1 percentage point to 4% in Q4 2010. Second, R&D costs, which were stable sequentially but increased by 15% year-on-year to EUR 12.4 million. Given our declared strategy to intensify our development activities further, as well as the progress being made with the opening of our new R&D center a few months ago, this cannot surprise anyone. It does highlight our commitment to this critical component of our strategy yet again, though we added further personnel in this area and now have 252 engineers and support staff employed. However, importantly, R&D costs relative to revenues have been stable sequentially, and actually decreased by 1 percentage point to 6% of revenues against the first quarter last year. Third and final, our net result increased year-on-year by 64% to EUR 52.3 million. Our effective tax rate on the result before tax remained stable at 31%. Let me now move to a few selected figures on our balance sheet on slide 6. Looking at PPE first, this line item more than doubled from Q1 2010 to take account of our new R&D center. Since the end of 2010, it grew by about EUR 4 million, principally due to further investments into R&D. Moving on to Goodwill, there were no additions or impairments in the first quarter, so the reduction of this figure is purely due to translation adjustments. Inventories and trade receivables decreased compared with the end of last year, in line with a slightly lower business volume in Q1 2011. As Paul already mentioned, cash and cash equivalents including deposits with a maturity of more than three months rose once again, this time by about EUR 10 million since the end of last year. This item splits into EUR 200.7 million in cash and EUR 194.1 million in deposits. Needless to say that this puts us in a very comfortable position to finance our ongoing business requirements, plus respond to any outside opportunities should they arise. Our shareholders equity increased to EUR 651.2 million as of March 31, 2011 compared to EUR 600.3 million at the end of last year, mainly due to higher earnings. This takes our equity ratio to a very comfortable 79%, up from 73%. Paul also already mentioned briefly why advance payments went down. From my perspective, we anticipated changing payment patterns already when we raised additional capital in late 2009. More and more bigger players enter the LED space, customers with strong balance sheets and solid financial track records. In this changing environment it was and is foreseeable that the advance payments ratio in percentage of backlog which was above 40% in 2009 and 2010 will inevitably go down. This is a simply a fact and not concerning at all as it is also a sign of more mature market environments. Finally, we continue to be debt-free, with no bank borrowings. Let us now move to the cash flow during Q1, shown on slide 7. As you would expect, most of the cash inflow from operating activities of EUR 18.6 million comes from our substantially increased net result. The difference between net profits and operating cash flow is largely explained as in previous quarters by increased working capital requirements resulting, as mentioned from decreasing advance payments. Our investing cash outflow into tangible and intangible assets of EUR 6.9 million was more than offset by a reduction of investments in money market deposits. Our cash inflow from financing activities of EUR 2.1 million in Q1 was caused by exercising of stock options by AIXTRON employees. In Q2, this line will include a dividend payment of more than EUR 60 million if the Annual General Meeting in May follows our proposal to pay a dividend of EUR 0.60 per share. Let’s move to slide 8, our business development slide. Both equipment order intake as well as equipment order backlog increased for the eighth time in succession. The recorded Q1 equipment order intake remained at the very high level of the previous two strong quarters. Our equipment order backlog rose accordingly and now stands at EUR 321.1 million. We continue to see a very solid order flow and backlog, which is exactly what we have been guiding you towards for quite some time, and which is very encouraging in our view. While total revenues are down slightly on a sequential comparison, they are up against the same quarter last year. As most of you know, our revenues can fluctuate in line with customer delivery plans. This sometimes may make the interpretation of quarterly developments more difficult. Let us now continue with the next slide, 9, and our revenue analysis. Overall, there are only small changes to the composition of our revenues compared with previous quarters. 93% of revenues came from systems, 7% from spares and services. This is almost identical to Q4 of 2010 and Q1 last year. As before, the majority of our systems, approximately 89%, are used to manufacture LEDs. The bulk of these LEDs are still primarily used for backlighting purposes, but increasingly also for general lighting applications. Regionally, 89% of revenues were generated by sales to Asia, a decrease of 5 percentage points compared with Q1 2010, but an increase of two percentage points against the last quarter. The remaining 11% was split almost equally between Europe and the United States. This underlines that the recent events in Japan had no immediate impact on our revenues in Q1 and we have not seen any change in this quarter. Paul will share his thoughts on this with you in a few moments. Ladies and gentlemen, thank you for your attention for now. Let me hand you back to Paul for his concluding remarks before we will open the floor for your questions. Paul?

Thank you, Wolfgang. I would like to turn to slide 10 of our presentation now, which is where we set out our strategic future in the form of our technology and market roadmap. But today, I would like to focus more on the short and mid-term opportunities and specifically on the LED prospects, because although we have many of the strategic crops you can see here already in the ground, it is the LED harvest opportunities that I want to discuss today. First of all, I would like to talk about our prospects in China once more, and the impact of the latest, in fact the 12th five-year plan recently endorsed by the Chinese People’s Congress. Since mid 2009, the Chinese central government has had in place a substantial investment program, as indeed additionally have many local government authorities in China, focused on accelerating the development of a sustainable LED industry. Apart from their global commercial aspirations, they are also greatly motivated by the high potential internal benefits that will arise from having access to energy efficient lighting and consequently, LEDs are a very prominent target technology in China’s latest five-year plan. China’s general economy will unquestionably continue to grow strongly as will its desire for lifestyle improvements and the Chinese people’s appetite for consumer products. Its government will, out of necessity, be very focused on maintaining a balance between consumptive growth and reduced domestic energy consumption, and they are very clear in their ambitions to become a global player in the provision and application of LED technology. We have a long and successful history in China, with well established customer relationships and infrastructure in place and an established and valuable reputation for technology innovation and quality. It is our intention to build on this foundation during 2011 and to match the growth of China as a market with our strong support and commitment to our Chinese customers. We are confident in AIXTRON’s ability to retain China as one of its strongest regional markets. Let me also make a comment on Japan and the potential impact on AIXTRON of the dreadful natural, nuclear and humanitarian disaster they are currently dealing with. I must add my admiration for the manner in which the Japanese people are conducting themselves at this extremely difficult time. Today, I would like to split my assessment of the consequent effects into three parts: first, the primary and evident impact; then, the potential secondary indirect impact on the end markets; and finally, the possible long-term consequences. At this point, I can say that we expect little primary, immediate impact on AIXTRON’s business. Our supply chain risks have been channel checked and are secure, and although some customers have requested and are receiving recovery support from us, there have been no customer requests to discuss cancellations, although understandably there have been some requests for delivery delays as you might expect. In fact, direct customers in Japan only represented 2% of our revenues in 2010, so are not a substantial risk to us today. But that said, it is nevertheless encouraging to see us receiving system orders again, here in Q2, from Japan. Just as with the potential global macroeconomic effects, the secondary impact from Japan’s problems on equipment demand, i.e., the possible wider indirect effect on our customers and their customers business is still not clear enough for us to assess at this stage. We are confident, however, that our long-term prospects, beyond those temporary potential influences are very promising, and will remain so. If anything, the radiation leaks at Fukushima are demonstrating very clearly, in the public and government minds, the risks involved in nuclear technology, a fact that has already triggered political debate beyond Japan’s borders regarding alternative energy sources and the options to reduce energy consumption. Indeed, here in Germany, the political debate about nuclear technology has stepped up a gear, resulting in much stronger consensus within the federal government, which has already taken tangible steps of putting in place a temporary shutdown of some nuclear plants and are reviewing the future of Germany’s domestic nuclear power plants in general. All this can only help the advancement of energy-saving LED lighting technology and as one of the major global providers of the systems enable this technology, AIXTRON is in a good position to contribute to this development. Multiple markets for LED applications are emerging, and we believe our LED production equipment will remain the most prominent element of AIXTRON’s current and future revenues. Let me now turn to slide 11 and finish this presentation by reiterating our guidance given a few weeks ago at our full-year results presentation. The light blue segment at the top right of the 2011 guidance pie chart shows you our Q1 2011 revenues, namely EUR 205 million. In addition, we have more than EUR 320 million of system orders in our order backlog, as you can see in the red segment on the bottom right hand side of the pie chart, and as pointed out many times, AIXTRON recognizes orders only as firm, when all of our strict internal criteria are met. Even signed contracts with paid deposits remain as firm prospects until we have received confirmed delivery dates for each system ordered. We do not plan to change this long-term policy of prudent risk management, which has protected us from having to report push-outs or cancellation in recent years. With this prudent approach, EUR 321.1 million represents a very reliable and solid foundation for the rest of 2011. You can see in the lower green segment of the pie chart, we are expecting about EUR 30 million to come from spares revenue during the remaining three quarters of 2011. Finally, in the dark blue segment on the left hand side of the pie chart, you can see that we expect to receive about EUR 244 million to EUR 344 million of shippable orders this year to achieve our revenue guidance for 2011 of EUR 800 million to EUR 900 million. This expected total revenue should enable us to generate an EBIT margin of around 35%. To sum up, we are on track to achieve that 2011 guidance. We are very well positioned in China to be able to significantly support the development of a sustainable LED industry in that region. The momentum we have reported before in lighting applications continues to grow and we are in an excellent position to supply the industry with the current and future production technologies it needs to develop what will inevitably become the third and biggest LED investment cycle. And last but not least; we continue to invest substantially in R&D, not only to work on new MOCVD technology, but also to work on opportunities beyond LEDs. Ladies and gentlemen, this concludes our formal Q1 2011 results presentation. Thank you for your attention. Wolfgang and I are now available to answer your questions. Guido?

Thank you, Paul. Let me make one more remark before we hand the call over to the operator for the following Q&A session. Since we could have a long list of people wanting to ask questions, I would ask that you please limit yourselves to a maximum of two questions per caller. This will hopefully allow everyone to ask their questions. You are of course welcome to join the queue again if you wish. Your cooperation on this is much appreciated. I will now pass you back to the operator. Operator?

[Operator Instructions]. The first question comes from Uwe Schupp from Deutsche Bank. Uwe Schupp - Deutsche Bank: In your speech you commented briefly obviously on the lower deposits and explained basically by the fact that you are doing more business with bigger corporates, with bigger balance sheet, et cetera. And I reckon you said this already for the first time during the capital increase in October 2009, but how do you successfully balance this going forward you think in terms of the prepayments? Could prepayments drop to zero actually now that your bigger Korean and Taiwanese customers seem to be coming back in H2? And then secondly, the backlog conversion remains at a very high level, especially compared to your major competitor. You keep shipping orders after roughly four months, and any idea whether this momentum can be maintained, also will you look for a change here going forward? Thank you.

Coming to the advanced payments, of course we see a customer shift as we have indicated earlier in 2009 and we must be aware of the fact that in the future we will see lower down payments of course from, as I said in my part of the presentation, from my perspective not really concerning because, of course we will try to secure the payments, but the down payments have always two sides of one coin: one is of course, financing, which we already coped with in 2009, so our financing situation enables us to cope us lower advance payments; second, it has of course a security issue, meaning to make sure that we get money before maybe an uncertain customer gets system and is at the end not able to pay them and we then have a struggling to get all payments in-house. The second reason, of course we are still going for maximum security which means the system shipments, the deliveries are backed up by letters of credit or other guarantees, and also if we go into the booming Chinese market, we must say that even those customers in China have very highly rated bank facilities in place which give us a high security that we will get the money. My experience is that, the bigger the customers will get, we will see a decrease in advanced payments. I would not suggest that it goes down to zero because of course we still work on it and we still try to get money up front if possible. And know that if you compare the end of last year which was about 40% currently, we are about 20% in down payments and I recognize that this is going down. It may go up going forward. It’s depending on the customer mix, you mentioned Taiwan and Korea. I cannot name specific customers, but even those areas we always had big corporate clients who never did significant down payments, down payments in the range of 10% to 20% only. I would not expect that if those areas are getting stronger again, in the future those areas will offset this development. So in general, this summary yes, as said one and a half years ago we were expecting reduced volume of advanced payments. Some of the comments which are published earlier today indicate that this is any indication and change of our internal policy, because we have not changed our reporting policy. We are only of course coping with the change on our market.

May be I can just add something to that as well. I mean I used those two things that I think are being, Wolfgang has mentioned, one is, as we predicted bigger corporates, we expect it would pay less, and encouragingly, I think we are now getting less customers on whom we might insist on very deposits just because of lack of evidence of, should we say financial durability. The encouraging sign is we get less of that now. Will it go to zero? I don’t think so, certainly not in the short term. That’s not what we see happening in the short term. And I think your other question was in terms of the backlog conversion, it’s about four months. It’s probably four to six months on average, and most of our orders are going out in that sort of time cycle. I think one of the reasons we are able to maintain that sort of quick turnaround was down again to the work we did several years ago which was creating this sort of modularity within the product. So, we are able to actually buy by basis of having sort of a common platform structure, we are able to actually turn orders around fairly quickly. And we would expect to continue to do that. I mean that is our objective that we should fail to deliver within that sort of four to six months. We can do better than that but 99% of customers don’t want it less than that. I hope that’s covered your questions. Uwe Schupp - Deutsche Bank: Thank you very much.

The next question comes from Mr. Andrew Huang from Sterne Agee. Andrew Huang - Sterne Agee: So just two questions. It seems that right now utilizations in Korea are relatively low, while utilizations in Taiwan are quite a bit higher. So, I was just curious between now and the year end, could you give us your thoughts on potential orders from those two regions?

Certainly, I think we talked about this in the last quarter. Last year Taiwan was still our biggest market, followed by China, followed by Korea, and although we did say I think in the last quarter we were beginning to see increased activities out of Korea and we have received a few orders there, but you’re quite right. I think as we stand today, the utilization is probably lower in Korea than Taiwan. Taiwan, it is very high at the moment. But what happens later on in the years, certainly the second half of the year, I’m not sure. I still think there is certainly potential scope there for Korea to start to pick up again in terms of investment, perhaps later on in the year. And we remember that really it was the Koreans that lead us into this first investment cycle back in 2009, followed by Taiwan and followed by China, and we’ve now got this extended investment cycle continuing in China. I would expect we might see something coming from Korea later on in the year, but the utilizations as you point out are lower in Korea today. Andrew Huang - Sterne Agee: Okay. And then I guess the follow-up would be, could you give us a sense of how average order size has trends at over the past 12 months?

I won’t give you precise numbers but we are definitely seeing bigger order quantities, on the basis of the bigger corporates, and certainly some of the new arrivals have increased the average. The system orders, we won’t give you a quantity, but certainly I’d say over the last six months have increased quite substantially. Andrew Huang - Sterne Agee: Okay. Thank you very much.

The next question comes from Mr. David Mulholland from UBS. David Mulholland - UBS: Just two quickly on the outlook. Firstly, with the full year results you’ve given guidance but you still saw positive trends into 2012. And is it possible if you’ve just given up to it on your view going through the end of this year and into next, and then just secondly what FX rate your full year guidance is based off that you’ve maintained today, and also how should we think of your $1.40 impacting that?

The second one is relatively easy, but the budget rate for 2011 is $1.35. As to what we were looking in 2012. That feels like a very long way at the moment, but we are continuing to see a growth in lighting applications. I think we will see in 2011 certainly at retail level and probably still at equipment level, still continuing demand for backlighting, but again we’ve talked about this in previous calls and in the market. So probably, we’ve got a maximum of couple of years before we start to see that growth in backlighting reduced. I’d say now order backlog probably, we can’t be precise because not everyone will tell us, but probably 35% plus of the orders in the backlog probably are destined for lighting applications. So what happens in 2012 depends to some large degree I think on what the adoption rate or the growth development rate is for lighting applications. Maybe Wolfgang, you’d like to pass a comment on the impact of the dollar beyond the budget rate?

Dave, if you remember back when we first came out a few weeks ago with our first annual guidance, they really asked us why is your EBIT margin dropping, we are coming from 38% by the end of last year now to a guidance of 35% and this includes of course caution for an expected U.S. Dollar weakening. On the other side before I came to the conference call I just looked into Bloomberg. I mean, if you take the expectation and performance on the dollar there is also an opinion out there which says the dollar may strengthen again in the second half of the year. It’s really difficult to say, but we feel comfortable that we can achieve our margin even in a weakening dollar environment. David Mulholland - UBS: So just to be clear, even if it stays at about $1.40, you would still see 35% margin as achievable?

Yes. I mean, we must be honest, it’s not only the dollar, it’s also product mix and other factors with those sorts of levels we could achieve that. David Mulholland - UBS: That’s great. Thanks very much.

And the next question comes from Christian Rath from HSBC. Christian Rath - HSBC: You’ve highlighted the increased interest in the G5 from China. Could you please quantify just a little bit more, and is your 250 total program or production program on track? Could you also give us some update on that? Thanks.

The level of interest in China on both G4 and G5 is being, certainly it’s increasing. It has typically been more of a vertical deposition technology market. But I’d say some of the influences coming from the inward expertise that’s coming in, in some of the Taiwanese joint ventures. We are seeing both more orders and certainly more enquiries for planetary technology, and I think it is definitely being helped. So, as some of the advanced Chinese move away from some of the simpler material structures, we are getting increased levels of interest in the capabilities of the planetary to be able to address more complex structures. And the second part of your question was remind me. Christian Rath - HSBC: It was capacity.

Sorry, capacity, yes. Well, we currently have the ability to make already 150 systems. We know that we can make 200, and so the team is now looking as to what the obstacles would be on 250. It’s pretty certain there is no restriction internally on our ability to be able to make those sort of number of systems. The question will be out there somewhere within the supply chain, which is what the team are looking at now. So, we already know that if we needed to we could make 200, 250 is currently what they are looking at. I personally don’t think in any one quarter that the market will be in a position to take the sort of numbers that if we make that figure and competition to do something similar, honestly I don’t think there’s enough engineers to be able to cope in the short term with that number of systems, but it’s important to know that we could do it, should there be any short term demand for it. Christian Rath - HSBC: Okay. Thank you.

The next question comes from Bill Ong from Merriman Capital. Bill Ong - Merriman Capital: With our 4Q bookings at EUR 204 million with a 1.5 exchange rate, and 55% of the mix with a higher expense (inaudible) G5 tools, if you compare that with the EUR 210 million you reported with the lower FX, does that mean that the number of MOCVD tools declined sequentially by about 5% to 10%?

Generally, yes. If you just do the math, yes, but I wouldn’t link it to tools, I would just link it to volume in total, because as the tools have different pricing. But in general if you do a comparison with the currencies, yes. Bill Ong - Merriman Capital: And then my last question is capital spending outlook. Just to clarify, what do you think is the capital spending outlook for the country of Korea, as well as Taiwan?

I don’t know the answer to that question. Bill Ong - Merriman Capital: Okay. Thank you very much gentlemen.

The next question comes from Mr. Andrew Abram from Avian Securities. Andrew Abrams - Avian Securities: Two quick questions on China. Have you seen any substantial amount of bottlenecks on deliveries coming from fabs that haven’t been completed on time, meaning some of the newer guys who are building from scratch, just can’t take the deliveries when they originally scheduled them? How much of that have you seen?

I think there’s a couple of factors here. You may have heard us comment on this a couple of times before. I’d say over the last six months we’ve had some orders from Chinese customers who if they had made the fabs in the time they were predicting, would have set new world records. So, we’ve been a little bit perhaps cautious on recognizing all of those delivery schedules, but I would say that certainly the speed at which they are now picking up is impressive, whereas that was quite clearly struggling to get through the learning curve and get fabs up and functional. If you were to visit now and compare it to a visit a year ago it’s quite remarkable the difference. However, there have also been I wouldn’t necessarily call it direct delays but certainly the growth of demand for both wafers and materials has also had some impact, but again to be fair to those component industries they are just about keeping abreast of the demand I’d say. But it has had an impact but not major. Andrew Abrams - Avian Securities: Got it. And how do you handle the very large orders that kind of get talked about in China? I mean we’ve seen sort of semi-announcements or hints that somebody is going to do a 400 unit project or a 200 unit project. What’s your perspective on how you handle those kind of units and how do you long term plan against those kind of things?

Well, the numbers we’ve heard of course have been even bigger than that. And I think again breaking it into two halves, when we first head rumors like that a year or so ago, I think probably we are already fairly skeptical, but what is clear is there are some fairly substantial Chinese players out there that are capable of raising the sort of money that could support that sort of investment program. But there’s no one in the world that is going to take 400 or 500 systems in one go, there aren’t enough engineers to run them. So all of those big number orders are almost certainly multi-year projects, and I would say almost certainly multi-generational products. In many cases some of the new teams, new people on board will be recruiting people who are familiar on existing generations and then will plan to migrate to later generations. So, first of all that’s one side of it. They are real, but they are probably almost certainly multi-year, multi-generation and not single sourced, multi-sourced. As to how we plan for them, well, I think we’ve sort of already helped ourselves to some degree by the sort of common platform technology, it enables us to be able to plan volumes of generic products that we can then customize to specific customer needs, but capacity planning is vital if we suddenly did get a search of demands, we need to know that our suppliers can cope with that very substantial increase and that’s what we are constantly doing. You’re constantly looking to see what would be the next internal or external boundary or fence to be knocked over, and I think that’s a never ending task. And the factors have changed again if we bring out new generation products which can produce more of greater efficiency then that’s also highly relevant. Try to stay close to the markets to operate closely to these guys, understand what their plans are and I think you’ve got a chance at being able to meet their needs. Andrew Abrams - Avian Securities: Just as a quick follow-up on that, in your experience thus far in all of the cycles, what’s the maximum that a particular customer has taken in a particular quarter in terms of unit volumes? Not an exact number, but just a number that we can use to gauge what that actually can be if the customer is able to handle it?

I’d probably give you a very different answer in six months time because we are seeing certainly the industry tooling up to be able to take more, but probably in the past anything between 30 or 40 systems would be quite challenging for most people. But we are now seeing customers who are tooling up to be able to do more than that, they hope. So I mean we have to watch and see how they develop. It’s a big learning curve for a lot of these new arrivals. Andrew Abrams - Avian Securities: Thanks very much.

The next question comes from Olga Levinzon from Barclays Capital. Olga Levinzon - Barclays Capital: You talked about the Gartner’s share exiting the year at around 56% and the increasing uptake you are seeing in both the G5 and the CRIUS II. Based on your overall guidance for the year, can you talk about what that implies and your assumptions for market share?

No, I wouldn’t do that. We would leave that to the parties to calculate that. But I mean it is true, and I am sure it’s true for all the players in this market. If you are delivering a new product there is a migration pattern. It does take a period of time if you are offering a brand new generation of product. So where we are at the moment from the figures I think I gave in the presentation look as though we are pretty much exactly where we were with the G4. So I think there is in our IR presentation, a historical chart which you can look at, which will show you what the previous speed of adoption for the last two or three generations, and that probably, on the evidence of what we’ve seen in the last 12 months, I suppose that’s a regional guide to what we think would happen going forward. But of course the market decides market share and it’s measured by revenue, so we have to wait till the end of the year. Olga Levinzon - Barclays Capital: Got it. And then, in terms of your outlook for 2011, in terms of the mix between the different geographies, you talked about China being the biggest proportion. But if you had provided this level of outlook in January, has the geographic mix changed at all in terms of how you look at 2011?

I think it’s going at pretty much exactly as we expected. We said last year that I think we had about 93% of our revenues into Asia, and of that 93%, 90% you could classify into the major three. Well, the biggest was Taiwan, the second biggest was China and I think you’d say third biggest was probably Taiwan going into China, remembering that last year was a quiet year for Korea. We did say that if you added up China and Taiwanese going into China, they were marginally just lower than Taiwan. And I’ve also said in the past I expect 2011 to be substantially more Chinese business and then it’s a question of how much goes to Taiwan and how much goes to Korea, but China will undoubtedly be the biggest market in 2011, and maybe 2012. I think it very much depends on where and at what pace these lighting applications develop. Olga Levinzon - Barclays Capital: Got it. Thank you.

The next question goes to Sandeep Deshpande from JPMorgan. Sandeep Deshpande - JPMorgan: Just a quick question. I don’t know whether it was asked earlier, but clearly your new product; your market share by orders is going up in MOCVD. Is this essentially an impact of the new product that you had talked about when you released the G5? And I have one follow-up.

Yes, I mean G5, we should talk about G5 and CRIUS II. We launched G5 in February of 2010, and probably unfortunately for us because it coincided when suddenly there were substantial subsidies available in China. Our CRIUS II product, if you like the sister product was running behind and we launched the CRIUS II later in the year. But certainly when we talk about the new generations it is the G5 and the CRIUS II that we are talking about, but we don’t split them in terms of mix. But China is now, certainly we are seeing an increase in planetary systems going into China, so we are getting both vertical and planetary technology being taken by Chinese customers, which is very encouraging for us. Sandeep Deshpande - JPMorgan: So you think you are taking share in China as we speak?

I am only talking about what we are selling Sandeep. I’m not going to talk about market share. We answered that in the last question. We’ll let the market analysts decided that because it’s on revenues, and let’s watch where it goes then. I have to say we are feeling increasingly comfortable that we are through the worst part of the transition period. I mean there is always a transition period with new products and the evidence suggests that we are certainly through the worst of that inevitable cycle. Sandeep Deshpande - JPMorgan: Thanks for that. And then, I’ll ask a question on your other product for your other end markets. You used to make products for deposition in semiconductors. Is that business over now or are you investing in some new products on the semiconductor?

We are investing there. I mean to go back to what that was, I mean principally that was CBD revenue, and that was being for DRAM and FLASH memory market products, well CBD is all but finished now, really in that segment. We have put a lot of time, a lot of effort and are having some success, I will say, in terms of high throughput ALD for sub 32 nanometer memory, sub 22 nanometer logic. A lot of that work is going on both internally here and in several cases within customers labs, but we are not banging the drum on immediate revenues, but I’d say that we are pleased with the revenues that we are getting from those areas, from the initial contact we are getting in those semi-conductor. On the organic side of the business, again beginning to get a little bit of traction in terms of customers now increased activity levels both for OLED displays and continuing to get some interest in OLED lighting. But again we are not making a big song and dance about that right now. This is clearly all about harvesting the LED applications certainly for the rest of this year. Sandeep Deshpande - JPMorgan: Thank you.

The next question comes from Janardan Menon from Liberum Capital. Janardan Menon - Liberum Capital: Just going back to your comment that China will unquestionably be your largest market this year and perhaps next year, in Q1, I just want to confirm whether China was your largest market by revenue, as well as by orders; and two, there have been quite a lot of announcements in the last three, four months by Chinese companies putting up fairly projects. Without giving us numbers, can you give us some kind of a qualitative feel on the kind of incoming interest you’re seeing, how those negotiations are going, and when you think from a timing perspective you could see some of them placing firm orders on you? The other question is just a clarification. Can you also give us some guidance on SG&A spending for the rest of the year and the remaining three quarters? Thanks.

Just first of all on revenue. Revenue, I think I just answered the previous caller on this and I said that China was about 50%, it was very nearly close to 50% of the Asian revenue. That hasn’t changed substantially yet, but it’s around about that sort of figure now. But there has been an increase in the percentage of orders for China, which is much what we would predict. So we are seeing a slight increase in revenue percentage but a fairly big increase in order percentage. Janardan Menon - Liberum Capital: So would China be a significant majority of your Q1 orders?

Not a significant majority but certainly more than 50%. In terms of the announcements, well of course there are plenty of announcements, there’s one a week or most of new companies, but there are some fairly serious players out there now who are beginning to put in meaningful plans to participate in this market. You had a second question, which I think Wolfgang would want to pick up. SG&A.

The SG&A absolute number in Q1 was EUR 29 million and in total we expected that this number may go up by 10% per quarter. This is mainly driven as we said quite often by the increasing spending for research and development. So I would say it’s in the range of EUR 30 million to EUR 32 million, EUR 33 million depending on the timing. This does not include any currency expense or income because that’s hard to forecast for the quarter and it’s also included in operating expenses. So, we are not forecasting any edging or currency income expense but in total it’s EUR 30 million to EUR 32 million per quarter.

Actually if you download from the web, we have an IR presentation, the full IR presentation, which has been updated for this quarter. Slide 54 on there actually gives you the progressive development of SG&A as a percentage of revenue also over the last five years, so you can get some detail there. Janardan Menon - Liberum Capital: Okay. Thank you very much.

The next question comes from Peter Knox from Societe Generale. Peter Knox - Societe Generale: Thanks for taking the question. Just briefly on the spares and on equipment revenues, they are relatively small parts of the business. But after the installed base grows, should we not expect that business to be growing as well? I was wondering what was implied in your apparent caution in the 2011 guidance for that line.

In the past what we’ve experienced with spares is that typically not long after the equipment lands on the customer’s dock, the customer will be looking for, should we say, commodity spares components to be luckily sourced if they can. So, you’re quite right, we have a fairly cautious view and we had about EUR 40 million at the beginning of the year with our forecast in the quarter. But if you look at the numbers you will see that quarter one was higher than that run rate, and we continue to have EUR 10 million a quarter in there. Some of it we think is initial inventory build-up with customers first taking the product, and longer term, yes. I think there is scope there for development. But there’s also equally scope for in the longer term service revenues. Indeed we are building up our whole infrastructure out there, but we have to get over the concerns that customers may have about allowing us to service their equipment on which they have their own specific process IP. But in due course I would expect that we would start to see a growth in service revenues going forward. Peter Knox - Societe Generale: And in terms of margin on that service business?

I don’t know. Well, we don’t have a huge amount of service business today. I don’t know what the current percentage is on it, well gain’s not high. It’s relatively more of a supported revenue at the moment. I mean when it becomes a meaningful portion, then we should start to develop sort of more appropriate margins. Peter Knox - Societe Generale: Okay, thank you.

The next question comes from Adrian Hopkinson from WestLB. Adrian Hopkinson - WestLB: Just to come back to China again, could we possibly discuss whether there has been any regional differentiation? I think on page 31 of your presentation you suggest that the Yangtze River delta is the area which is showing the most positive activity. I was wondering whether that remains the case at present. And also whether there’s any change in the financing pattern on per machine basis to possibly more a project based financing pattern for the new investors.

Now that’s true. There are certainly some areas, certainly more geared up. As you know there are only certain areas of China where the government is encouraging focus into LED technologies and some regions are certainly better equipment of it, there’s more infrastructure, there’s more expertise there. It also can be affected by not only the sort of central government funded projects, by that I mean sort of the top down projects, the utility projects of the government is funding as well as central government component funding, but it also can be quite heavily influenced by to what degree local government is funding. I think now one or two people have made a mistake of thinking its just top down government funding of systems. There is also fairly extensive local funding, because of course everyone is interested in trying to draw into their region companies that will eventually become tax payers. We already know that the subsidies have variable lives, some that talk about finishing mid this year, some next year, some talking about they’ll continue them for two or three years and in some cases the tools, the instruments of subsidies are also changing, rather than just pure cash and some of it is tax concessions, all of this sort of vehicles, instruments you would expect to be used because of course just pure cash subsidies is not sustainable long term. So we are seeing more sophistication as to the subsidy instruments they are using in China. Adrian Hopkinson - WestLB: But otherwise from region to region the growth trend is fairly constant? There isn’t any change between north and south, for example.

No, I mean there is a bearing, if you look at I think the chart you were talking about reflects that some are considered to be stronger than others. Adrian Hopkinson - WestLB: Okay. Thank you.

The next question comes from Tim Arcuri from Citigroup. Tim Arcuri - Citigroup: I have a follow-up on the deposit issue. You were saying that it sort of is an industry trend that the customers are getting bigger. If I look at Veeco though, Veeco’s deposits as a percentage of their backlog have been going up the last six quarters. And if I look at the language in your filing, the language in terms of how you’re recognizing orders changed a bit. And I’m not sure if I’m reading much into that because the language in the filing is that when a purchase agreement is sufficiently likely in the assessment of management, and it usually requires the receipt of a firm purchase order, which is different from the language in the last filing. So I’m wondering, am I reading too much into that or what? Thanks.

You are reading a little bit too much into that, because actually the wording we have now reflects what we’ve been saying publicly. If we were to go back probably 12 months or ago, we would have sent you well we are looking for a confirmed order, we are looking for what we call shipment limiting documentation, we are looking for the agreed deposit for the order and we are looking for firm delivery dates, but we have over the last six months being adding to that, but in some cases we may take a management decision as to whether or not, even if all of those criteria have met, whether or not we shouldn’t still consider it as a very firm prospect rather than the firm order. The example, the pure theoretical example we’ve given, if a brand new customer comes in and orders 120 systems at 10 systems a month and fulfills all that criteria and hasn’t built its fab yet, we may choose to take a management view on whether all that 120 could be counted as absolutely firm orders. So I think probably the wording that you’ll quote in there just reflects what in practice we’ve been saying publicly. I mean I can’t comment on obviously what Veeco’s deposit relationship is with customers, but certainly what we can’t escape is the fact that the market is dramatically changing and most of the new entrants coming into the market not only are substantially bigger and more financially durable, they come with a track record of not expecting to pay the 50%, 60% deposits which we might have insisted from relatively new and more fragile players in the past. So, I can’t comment on what others experiences are, but certainly ours is exactly in line with the whole reason why we raised capital in 2009. It’s working out pretty much exactly as we anticipated. Tim Arcuri - Citigroup: I see. So what is the percentage today? What’s the generic percentage of an order that you require as a deposit? Thanks.

The statistical number Tim is 22% at the moment, but it’s just overall a backlog and perhaps just a simple method of the balance sheet, the advanced payments was divided by backlog. We started off positive, we started discussions with a much higher percentage but also if you had considered China, if you go to some areas, the previous question was the other regional differences in China, yes, there are also differences in terms of when our customers get their funding. So it’s pretty natural if you get 30% funding up front and then 30% on delivery. It’s very hard to work against higher down payment if the customer doesn’t get more from the government in terms of funding, but also it may have very solid letters of credit in place. Also this China development of costs contributes to this development.

I think what’s important to say is our whole company policy on this has remained constant throughout, probably the only area where you might say we are slightly different is that even if anyone has given us all of the signals we require, we might still apply managements opinion to be a little bit more prudent than the orders so the definitions would take, but beyond that there’s no change. It’s the market that’s changing. It’s the nature of the market, it’s the nature and size of the customers, as I say pretty much exactly in line with what we thought would happen back in 2009. Tim Arcuri - Citigroup: Okay. Thanks a lot.

The next question comes from Alla Gorelova from Steubing AG. Alla Gorelova - Steubing AG: The question I have is more about the current market trends in terms of LED used in general lighting. You mentioned already 35% affordable order backlog about coming from those customers, could you name who those customers are, if no names then generally are they established manufacturers or some new company specializing on LED lighting. The second question that’s probably related to that one, do you see any change in orders or machines doing this larger wafer sizes or is it pretty much the same?

Well, let me answer the second question, certainly we are seeing a trend towards larger wafer sizes. We continue to ship systems in six-inch configuration, albeit, the six-inch wafer size prices are coming down, they are coming down. I think probably the average in Taiwan is now probably around $400, but it’s still far too much to be considered to be a supportable commercial price, but I think people are taking six-inch systems to qualified processes in anticipation, the downward trend on the bigger wafer sizes will continue, and bigger wafer sizes facilitate more efficiency and less (inaudible) for customers. So yes I expect that to continue. So there will be more investment in six-inch wafer capacity on shore and more pressure on the wafer manufacturers to bring the price down to anywhere between $175 to $200 certainly would probably do it. On lighting, well, I mean all of the best known lighting companies as I am sure you are aware have very active programs on producing any LED lighting devices and the tier one players, people like Phillips, Osram, these guys are very well developed in terms of having products available now. But it’s not just those tier one players who are putting a lot of money into this area. Clearly in China and in Taiwan and Korea, there’s a lot of activity looking at how they can develop, not only lighting applications and lighting devices, but the necessary cost metrics to be able to support it. And as I said, I think we have certainly in excess of 35% plus of our order backlog we believe is going to customers who have aspirations for life, and I can only see that continuing. We’ve put in our IR presentation a couple of trackers we have on the 60 watt bulb which we always think is the high volume commodity, particularly for commercial applications. And what is notable is the price hasn’t dropped substantially below the sort of average $35 in the U.S. and may be $25 in Japan. Although if you start to apply some of the subsidies, then sort of things like (inaudible) now you can get down in the States to probably below $18. And in Japan probably down to about $18. And we’ve always thought, it’s an arbitrary number but somewhere between $20 on the price cut somewhere between $20 and $15 is the tipping point when we should see an acceleration in adoption for that type of 60 watt commodity products. So, momentum is continuing to be made, but still a lot more work to be done against the very high volumes that we are all hoping for. Alla Gorelova - Steubing AG: Thank you so much.

The next question comes from Jed Dorsheimer from Canaccord. Josh Baribeau - Canaccord Adams: Hi, this is Josh Baribeau for Jed. You’ve talked a lot about how customer size is changing. And then if you look at the change in the deposit category, we’ve seen that has gone down by roughly EUR 90 million over the past two quarters. Can you help us think about how many large orders or rather how many customers are benefiting from that change in deposit requirement?

I’m not sure I can. Wolfgang, have you got anything you can add to that

I would take the comparison also with our major competitor, if you do the math you will see that the 22% I mentioned before are more or less exactly the same percentage which our major competitor reported as if I remember correctly, so what you see is that there is of course a shift in the market in general from a financial perspective if it comes to down payment. And if this change of course is moving to China, that’s the major change we have and if you follow-up without, we cannot name the customers or our sizes but of course there are a lot of messages and rumors out there, how big the orders are some of the Chinese potential players, we’ll be placing in the next quarter. And you can see that the order pattern is completely changing as Paul said in one of his last comments. It’s changing from smaller lot sizes to bigger lot sizes, if it comes to certain orders. That’s the clear trend but still of course we are still serving the same number of customers, but talking about China, we are also talking about bigger customers placing bigger orders in general.

I think as a general comment on this if we draw some comparison with a semiconductor industry, this is very general but I mean we can assume that the big guys will get bigger, there’ll be the natural consolidation process as the industry grows, the small guys will hope there will be sufficient niches left to support them. And I think in this industry there is also the question of at what speed does the foundry industry develop to be able to support the device manufacturers perhaps feeding off a foundry model. And probably the best example of a foundry as it currently stands is companies like Epistar. So how that develops over the next two or three years probably will have a direct impact on the environment for the equipment. So I don’t think there should be any surprises. There is a good benchmark to draw simply by looking at how the semiconductor industry developed maybe 10, 15 years ago. Josh Baribeau - Canaccord Adams: And just lastly, is there anything that would require you to actually disclose a customer, a large customer as an order in terms of maybe it’s a percentage of the backlog, or a percentage of it would be a 10% or 20% customer? Or is that all really just dictated by if the customer wants to be announced publicly for competitive reasons?

Well, there are also two sides to that. Clearly, we would never make an announcement if a customer doesn’t require it. However, there are formal requirements on not only us but all companies, but if there was a material order, the constituted material order or revenue potential, then the company is required to announce it. I mean this hops back the sort of the rumors we’ve heard about these huge orders that are currently being talked about in the industry, and it goes back to my comment that actually that isn’t how those orders happened. There is no one going to place a single order for 500 orders in one go. It’s likely to be a number of smaller orders perhaps totaling 500, but over a period of time. But if an order is substantial and material, then both BATEN and the SEC would expect us to report it within the very formal rules that exist and that applies to everyone else in the industry. Josh Baribeau - Canaccord Adams: Great. Thank you.

The next question comes from Maxime Mallet from Natixis. Maxime Mallet - Natixis Securities: Actually, I just wanted to know if you could give us some color regarding the evolution of order you expect for the coming quarters.

Of orders? Maxime Mallet - Natixis Securities: Yes, orders. Yes.

No, I am afraid I can’t, and in fact I wouldn’t. We don’t as a matter of course give quarterly outlook, but we always make a point of giving you an annual prediction. Well, I can say is that we are still confident achieving our guidance and if we are to achieve our guidance, we need to receive EUR 244 million to EUR 344 million of shippable orders and the emphasis on shippable would suggest that we would need those orders in Q2 and Q3. So, you can join the (inaudible). Maxime Mallet - Natixis Securities: Okay, thanks.

The next question comes from Guenther Hollfelder from UniCredit. Guenther Hollfelder - UniCredit: First, a follow-up concerning Korea. I mean you mentioned that capacity utilization rates are likely below the Taiwanese ones right now. But on the other hand, do you have any indications from your Korean customers that they will be more active with orders than later this year, despite the current situation? And as a second question, there were some news recently about a milestone here in LED manufacturing with free off pinning wafers and with like constant yields over the wafer. And so I was wondering whether this is something that was achieved or is likely to be achieved with the planetary system here from you guys?

I mean there’s a whole jigsaw in there in your question. I mean there’s variety of things going on. Clearly we are seeing substantial yield improvement certainly with the latest generation products. But also there’s a lot of activity within the market. I think customers are being clever in terms of how they are not only improving their yields but how they are using the products and mixing and matching specification products. I think also we have to remember with Korea, there was certainly some sign of activities. Korea is after all one of the biggest consumer product producers in the world, and you can imagine there must be nervousness as to what consumer products might be in the short term. In the longer term I think it still remains very positive, but we have to wait to see at what point the consumer produces, arrival to bounce that off against what is the economic environment. I think wasn’t there a report today from the Japanese banks talking about downgrading their growth predictions, which I guess you’d have to say is very understandable in the environment, but that of course will have this sort of indirect and what I called in my presentation, secondary impact. We have to wait to see what the medium term effects are and consumer spending. It’s been a very, very difficult period. Though I can’t give you precise answer but certainly we are seen many of the things that you’ve described in your questions Guenther Hollfelder - UniCredit: And concerning this, we saw recovery or strong recovery here from Korean customers is not included in your guidance, then you don’t need that to achieve your guidance.

I think if we, I believe if we see a substantial increase it’s likely to be back-end rather than front-end. Guenther Hollfelder - UniCredit: Okay, thank you, Paul.

It’s probably going to be mid to third quarter I would say before we see a substantial pick up in those markets, but I’ve been wrong before. Guenther Hollfelder - UniCredit: Thanks Paul.

The next question comes from David Mulholland from UBS again. David Mulholland - UBS: Hi. I wasn’t sure I’d get through. Just a couple of follow-ups. Could you possibly just give some more color on what you’ve seen from (inaudible), and just also is it possible to infer from -- given the quicker ramp you’ve seen in the G5 and CRIUS II, it’s important to come to market quicker with new generations since they’re being accepted by the market itself quicker as well?

Yes, I mean first of all, (inaudible) to my knowledge are still active in this area still trying to develop technology. It’s a very capable organization. We do know it’s a very transparent industry that they continue to try to qualify their systems, and I’m sure eventually we should expect that this won’t just be a market of three. I am sure other people would come and join us. But we haven’t yet seen substantial orders but that isn’t to say we won’t. And that’s I think an honest view of it. In terms of new products and the speed of new products again, sorry to hop back to 2009, but we had two reasons why we raised the capital back in 2009. One was because as we’ve talked about higher inventories and lower deposits which has to come bear, but also we said at the time we expected the product cycles would be shorter, and that we expected that whatever is required for the next generation for real solid-state lighting economics would need to be available within sort of the three years rather than five years, and that was the basis on which we raise money and on which we are currently close to completing sort of $60 million investment in our new R&D center because we do believe that both of those things are true. Shorter product cycles and the need for a substantial breakthrough in technology for the large volume lighting market in due course. David Mulholland - UBS: Is it possible to get an update on when you expect next products to come from you or sometime still in 2012?

No, I am afraid not, but I don’t blame you for asking me. You can see photographs of progress of our R&D center and probably with the R&D center it’s probably useful to recognize that by the time we finished it, our R&D and engineering headcount will have risen by about 50%. So, of course you don’t get an automatic return. Most products take several years to develop a new generation. Developing a variation on an existing technology is a lot shorter but next generation is a different concept altogether, very, very important part of that current business commitment. David Mulholland - UBS: Thanks very much.

As we see, we don’t have any more questions in the queue. We would like to say thank you to everyone for listening and participating, and as always happy to take questions that have not been answered on a personal relationship, and then thank you to all of you.

Thank you. Bye-bye.