Lori Owen – IR Moshe Gavrielov – President & CEO Jon Olson – Sr. VP Finance & CFO

Tim Luke – Unspecified Company Uche Orji - UBS James Schneider - Goldman Sachs Glen Yeung - Citigroup Christopher Danely – JP Morgan Ruben Roy - Pacific Crest Securities Randy Abrams - Credit Suisse Srini Pajjuri - Merrill Lynch John Dryden - Charter Equity David Wong - Wachovia David Wu - Global Crown Capital Gary Mobley - Piper Jaffray Sumit Dhanda - Banc of America Securities Analyst

Good afternoon and welcome everyone to the Xilinx second quarter fiscal year 2009 earnings release conference call. (Operator Instructions) I would now like to turn the call over to Lori Owen.

Good afternoon everyone. With me are Moshe Gavrielov, CEO and Jon Olson, CFO. We will provide a financial and business review of the September quarter then we will open the call for questions. Let me remind everyone that during our conference call today, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. We wish to caution you that such statements are predictions based on information that is currently available and that actual results may differ materially. We refer you to the documents that the company files with the SEC including our 10-Ks, 10-Qs and 8-Ks. These documents contain and identify important factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements. Now let me turn the call over to Jon Olson.

Thank you Lori, during today’s commentary I will review our business results for the September quarter, I will conclude my remarks by providing guidance for the December quarter. Revenues in the September quarter of $483.5 million were down 1% sequentially from the prior quarter and up 9% from the same quarter of the prior year. The quarter played out pretty much as expected. The month of July was strong from a bookings perspective, August weak, and September was good. Gross margin of 63.3% was in line with our guidance of 63% to 64% but slightly then gross margin last quarter due primarily to higher then anticipated growth from Virtex-5 which had slightly lower then corporate gross margins as well as customer mix which was weighted more heavily towards high volume customers. Operating margins of 25.8% was the highest we have reported in nearly three years. Operating income of $124.6 million included $2.5 million in restructuring charges which was slightly more then we had anticipated. September quarter operating income was up 16% sequentially and up 32% year-over-year. Combined R&D and SG&A expense was down 3% sequentially and represented 36.7% of sales, down from 37.6% of sales in the prior quarter. We continue to make progress in controlling expenses. In the same period a year ago combined R&D and SG&A expense accounted for 40.1% of sales. We will continue to work towards meeting our corporate targets. Other income in the September quarter was $8.5 million, more then $5 million forecasted due to realized gains from our investment portfolio. On the other hand we also recorded a $29 million pre-tax impairment charge on investments during the quarter primarily related to losses on certain cash portfolio investments in the financial sector. The resulting cash loss impact from these impairments is not known at this time but could likely be less then the accounting charge. We continue to maintain very conservative investment guidelines designed to mitigate credit risk by limited investments in the debt securities of a single issuer and diversifying risks across geographies and type of issuer. Additionally we have continued to reduce our exposure to financial institutions and have moved more defensively to government and agency securities. September quarter net income was $81.8 million or $0.29 per diluted share including the previously discussed restructuring and impairment charges. Collectively these charges represented approximately $0.09 per diluted share reduction after tax. Operating cash flow for the September quarter was $95 million before $12 million in CapEx. The decrease from last quarter was primarily due to severance and related payments, convertible bond debt interest payment, and a backend loaded shipment profile. In the first six months of our fiscal year we generated $253 million in operating cash flow. We repurchased 4.9 million shares for $125 million during the quarter and paid $39 million in dividends. Lastly the tax rate for the September quarter was 21.4%. Let me now comment on the balance sheet, cash and investments decreased $73 million during the quarter to $1.8 billion. Factoring in the $1 billion convertible, our net cash position is approximately $800 million. Day sales outstanding increased six days in the September quarter to 44 days. Inventory dollars at Xilinx increased by $1 million sequentially in the September quarter representing 73 days. This is up slightly from 72 days in the prior quarter and up from 69 days in the same quarter a year ago. Worldwide distributors held 20 days in the September quarter which was down from 21 days in the prior quarter and down from 23 days held in the same quarter a year ago. Combined inventory days in the September quarter were 93 days which was flat with the prior quarter and well within our target of 90 to 100 days. New product sales increased 5% sequentially driven by strong Virtex-5, Spartan-3E and 3A sales but offset by Virtex-4 sales which declined as expected after a strong June quarter. Mainstream and base products experienced sequential declines of 6% and 1% respectively. North America sales were down 6% sequentially, more then anticipated due to declines in networking and defense. European sales were up 2% sequentially, stronger then expected due primarily to increases in both wire line and wireless communications. Asia Pacific sales were up 1% sequentially driven by strong sales to wireless customers, but offset by declines in nearly every other end market segment. Japan was our strongest region during the quarter with sales increasing 5% sequentially due primarily from strength from customer, consumer and industrial and other applications. From an end market perspective communication sales increased 2% sequentially in the September quarter, representing 43% of total sales up from 42% in the prior quarter. Sales to customers in the wireless space were particularly strong during the quarter driven primarily by next generation wireless activity in China. Wireless sales strength more then offset wire line sales which were weak in all geographies but Europe. Industrial and other sales were down 6% sequentially representing 32% of total sales down from 33% in the prior quarter. The sales decline in this sector was primary attributable to lower sales to customers to defense and industrial, scientific, and medical sectors. The consumer and automotive sector was our strongest end market in the quarter increasing 6% sequentially and representing 17% of total sales up from 16% in the prior quarter. Sales growth was driven by customers in the audio video broadcast and pure consumer sectors. The data processing sector declined 8% sequentially representing 8% of sales, down from 9% in the prior quarter. The decline in this category was driven by weakness in both the storage and computing and data processing categories. Let me now turn to guidance for the December quarter of fiscal 2009, we enter the quarter with increased backlog and sales have been relatively good in the first couple of weeks. Over the past five years sequential sales growth in the December quarter has averaged about 4%. We remain concerned over the macroeconomic situation, however we are expecting Virtex-5 to have another strong quarter and we are also expecting to see strength from wireless and defense end markets. As a result we are forecasting sales to be up 2% sequentially to down 2% sequentially, slightly lower then seasonal. The mid point of this guidance requires a turns percentage of approximately 56%, down from 59% in the September quarter. Based on backlog analysis and customer feedback we are anticipating sales from Asia Pacific to be up sequentially and sales from Europe, US and Japan to be flat to down sequentially in the December quarter. From an end markets perspective we expect communications to be flat as wireless gains are offset by wire line decline. We expect industrial and other to be flattish as sales to defense customers are offset by declines in test and measurement and medical. And consumer and automotive to be up driven by audio video broadcast. We expect sales from data processing to be down sequentially. Gross margin is expected to be approximately 63% to 64%. Combined operating expenses including $1.4 million of amortization are expected to be approximately $180 million down slightly from the September quarter. Other income including the impact of interest expense is expected to be approximately $3 million. The share count is expected to be approximately 276 million shares. Our tax rate for the remainder of fiscal 2009 is expected to be 21% inclusive of the R&D tax credit. The December quarter tax rate will be approximately 18% which includes a catch-up benefit of approximately $3 million. Let me now turn the call over to Moshe.

Thank you Jon and good afternoon to you all. In a difficult macroeconomic environment we are gratified with this quarter’s significant accomplishments. Sales for the September quarter were up 9% versus the same quarter last year. In addition sales for the first half of fiscal 2009 were similarly up 9% compared to the first half of fiscal 2008. I am particularly pleased with our operating margin which continued to show significant improvement reaching nearly 26% for the September quarter; the highest we have reported in nearly three years. Jon and I remain very much committed to continuing to improve operating margin through a combination of increased focus and tight spending controls. Moving along to a discussion of our products, the most important highlight of the quarter was the Virtex-5 sales growth which increased over 40% sequentially surpassing 10% of total sales. Virtex-5 strength during the quarter was broad based with wireless activity in China particularly strong. Based on our current design win activity and the comprehensive breadth of this product offering in the market we currently expect the Virtex-5 product to grow to be the largest Virtex family in our history in terms of sales. During the September quarter Xilinx began shipping two new Virtex-5 devices; the SX240T, the FX200T, and announced the new Virtex-5 TXT FPGA platform. This platform consists of two 65-nm devices that are targeted for use in next generation Ethernet bridging and switching solutions as well as applications in high performance computing video broadcast. These devices delivered the highest number of 6.5Gpbs serial transceivers available on any FPGA and are fully supported with application specific IP, development tools and reference designs for implementing high bandwidth protocol bridging. Virtex-5 backlog is up significantly heading into the December quarter and we are again expecting similar strong sequential sales growth. We believe our 65-nm solution is still very early in its life and we expect it to continue to be a substantial driver of sales growth for some time. The other bright spot in our new products category was the growth of the Spartan-3A and 3E families which collectively increased 18% sequentially and nearly doubled when compared to the same quarter a year ago. These products are gaining considerable traction in high volume markets such as set top boxes, servers, DVRs and telematics. For the September quarter Virtex sales represented 57% of our total sales, Spartan sales were 26%, CPLD sales were 8%. There is a lot of concern over the current macroeconomic environment and Jon elaborated on some of this in this remarks. Ultimately there is no such thing as a recession proof semiconductor company. Xilinx is no exception to this rule. However I am convinced that PLDs are increasingly well positioned to capitalize on increased volatility and uncertainty in today’s marketplace. In a recent EE Times article, you may have seen reference to the occurrence of the long anticipated tipping point. The tipping point referred to in this article pertains to the accelerated displacement of [gate or] ASIC to be shortly followed by structured ASIC and standard cell solutions by FPGAs. This accelerating trend is fully supported by the widespread feedback perceived from several [turns] of customer visits I made this last quarter. I absolutely am convinced that we are at the forefront of this trend. Further evidence of this is in the expanding number of end markets that we service. Starting with wireless communications in the September quarter driven by strong activity in China our wireless sales increased from 11% to 15% of revenue. In the December quarter we expect wireless sales to increase again. Based on our current design win traction we expect to gain PLD and total market share both in the wireless segment as well as in the Asia Pacific geographic region. Another market that has some positive momentum is audio video broadcast. While AVB activity in US and Western Europe has slowed, we are experiencing pockets of demand in emerging markets like China, India, Eastern Europe, Latin America and The Middle East. Activity in this market segment is driven by a number of factors including government mandates to shut off analog spectrum, high penetration of HD TVs and competitive pressures amongst satellite and cable broadcasters as well as among the actual news affiliates. All of this is speeding up the timetables for HD upgrades which work in favor of PLDs. Last but clearly not least is the defense market where the migration to PLD based solutions is most abundantly evident. This is the result of a number of factors including greater PLD cost competitiveness, the ongoing evolution of standards and the demands of new defense transformation programs that have reprogrammability as the key figure of merit for design wins. As Jon mentioned we’re expecting our defense sales to be up in the December quarter driven by a variety of applications such as secure solutions, space communications, and avionics. I have highlighted before this inexorable trend that we call the programmable imperative. The expanding ubiquity of programmable devices is best reflected in the rapidly expanding breadth of applications we serve and our increased end market diversity. Today 50% of our sales are from the consumer, industrial and other categories, up from 30% five years ago and a clear indication that our products are reaching a broader base of customers. In summary I am pleased with Xilinx results during a turbulent time in the financial markets. We are becoming a more focused and operationally efficient organization. This is reflected not only in our improved profitability but also in the market acceptance of the Virtex-5 family and the Spartan-3E and 3A families. Additionally early engagement customer feedback we are receiving on our next generation product development efforts has been highly encouraging. We remain on track to share more about these products by the end of our fiscal year. Finally we expect our competitive position in A-Pac to continue to improve markedly with Japan following suit based on key design wins recently won for next generation communications and scientific and medical application. We are now ready for the Q&A session.

(Operator Instructions) Your first question comes from the line of Tim Luke – Unspecified Company Tim Luke – Unspecified Company: I was wondering if you could provide a little color in terms of the broad environment. It sounds like you were saying that the first few weeks of the quarter had got off to a fairly steady start. Is that correct? Perhaps you could just clarify what you believe your backlog did directionally, whether it was up or down in the quarter and with respect to the wireless business in particular it sounds like it was strong last quarter and it’s guided up again in the coming quarter. Is that just Chinese TD [inaudible] that is providing the incremental list and how do you see that flowing as you look into the beginning of 2009?

We entered the quarter with a stronger backlog then we entered the previous quarter so that’s point one and we’ve had a couple of pretty solid weeks of turns in the first couple of weeks of the quarter as well. If you just looked, and you would normally expect our December quarter to be a little more frontend loaded just because of the holiday slowdown that typically happens in terms of the shipment pattern. So if you just use those data points solely, you’d say wow things are clicking on all cylinders and things are going really well. However in trying to reach out over the last two weeks to understand more current information from our customers, there’s a lot of confusion out there of what’s really happening. We have had some customers in the communication space that have signaled to us that they’re going to cut their builds. We’ve had others who have said absolutely no, I’m set. I think I’m going to take all those products this quarter so there’s a lot of mixed signals going on and certainly erring more on the fact that people are saying things are okay then the ones that say they’re concerned. So we’ve seen pockets of communications that have backed off and pockets in test and measurement that have backed off from us in terms of saying we’re uncertain about the future. So as a result of that, that’s why we took the position we did in terms of our guidance is going below seasonal and reducing our backlog, our turns required to hit our number is a fallout of that to take the posture that we are, its not clear what’s going to happen on the macro environment as we unfold through the quarter. Then you asked a question around wireless and what we see in wireless and yes we had a very strong quarter this last quarter driven largely by Asia Pacific and we do expect a good quarter. We have orders on the books so its not one of those things that we’re looking at and saying there’s promises coming, we’re starting out strong in the wireless space. It is again primarily Asia Pacific and China specifically but it’s also India. So the rollouts that are happening or the builds that are happening are really four rollouts that in the Asia Pacific region regardless of which geography happens to be building their customers is headquartered at that we’re addressing with those products. So we feel pretty good about the wireless space.

Your next question comes from the line of Uche Orji - UBS Uche Orji - UBS: Regarding Virtex-5 what are the products that are driving growth and right now and where do you see more growth coming from that product? If you can also give us an update as to what your next timing for 40 or 45-nm is going to be.

So V-5, the strength has been different as we’ve evolved over the last 18 months. Usually the first uses of V-5 go to a lot of validation or evaluation kinds of, excuse me emulation opportunities so then as the design wins have flowed through then we start seeing more classic designs where we’re the center of people’s designs in communication space and aerospace and defense. So if I had to pick two of our end markets, and I’ll say three, wireless plus wired, very strong V-5 adoption, aerospace and defense very strong V-5 adoption. Uche Orji - UBS: And the 40-nm?

This is a very broad product offering. It actually addresses a whole set of applications and the newest versions we just announced just indicate that and they basically are again targeted at some specific communications opportunities that we believe are going to have very significant revenue using these products and they are leadership products, very well differentiated on a no-risk part which can be used now and be very successful. We are in parallel developing our next generation of products and we feel very comfortable with our rollout plans. What we’ve said publically is we will share these plans by the end of the year which basically means the first calendar quarter of 2009. It’s going to be a very broad release of products which will continue to give us leadership very much akin to and even more then what we have on the 65-nm node.

Your next question comes from the line of James Schneider - Goldman Sachs James Schneider - Goldman Sachs: Could you talk first about, when you talk to your telecom and enterprise networking customers directionally about what they expect in 2009, what are they saying to you in terms of whether they expect an up year or a down year next year? If the top line is weaker in 2009 are there any opportunities for you to reduce OpEx further and can you comment directionally on your OpEx for 2009?

Generally speaking and I spent this last quarter travelling around all over the world and meeting I think it was over 50 customers and quite a few of those were in the communication space and to repeat what Jon said, you do get an interesting set of responses. For some they’re very cautious and for others they just believe that based on their wins that they’re going to have a very good year. Its difficult to find a common thread at this point in time which is pointing in any specific direction just because of the diversity of that plus the obvious caution that people are exhibiting at this point in time. What we are seeing is a broadening of the set of applications we address to go well beyond communications and this is medical, automotive, high end consumer, military, etc. and to some extent as you go and see all of these customers you get a very strong positive feeling that as they’re transitioning away from ASIC and to some extent away from standard products, to FPGAs there is some comfort in that broadening of the market and which enables us to service more and more applications, which to be honest just don’t have any alternatives.

Regarding if the top line gets weaker to we have opportunities in OpEx, that’s a highly hypothetical question because you could say well how much weaker and I could give you a different answer depending on different points if I thought about it. There’s a lot of uncertainty out there. We certainly considered the situation, what happens if things get weaker at the top line but quite frankly we’re very committed to these goals that we set out about 30% operating margin, etc. Those are our medium and long-term goals and I want to be really careful about how we attack what could or might or might not be a short-term [inaudible] in the top line. So I think first you have to access whether the top line impact is going to be a long-term or a short-term impact before we go in and start doing major surgery on anything we’re doing in OpEx. Its really important to us to keep our portfolio and engineering direction in tact under as many circumstances as is possible because there’s a real opportunity for us out there in these kinds of environment with customers that are choosing ASICs in particular to convert them over to FPGAs in these not very good economic times as they are trying to find ways to cut spending. It probably wouldn’t be in the best long-term interest of our shareholders to just go whacking away on our engineering spending quite frankly. But having said that if the top line gets weaker we are definitely going to look at every opportunity in OpEx and we would probably constrain certain kinds of non-critical items outside of engineering as a result again depending on the severity of the weakness and our estimate of the longevity of the weakness. It’s not a straight forward answer, but it’s also a very difficult question to assess unless you go through and pick a bunch of different kinds of alternatives along the way. James Schneider - Goldman Sachs: Do you think you could keep OpEx flat at current levels?

Again, it’s really situational. If the top line weakens and we think its going to be sustained I would take some actions to reduce the OpEx numbers.

Your next question comes from the line of Glen Yeung - Citigroup Glen Yeung - Citigroup: Can you comment on the [ST] behavior in the quarter and what you’re seeing to start this quarter, any impact you expect to see on inventories in the fourth quarter. I think last quarter you mentioned that some smaller US [inaudible] we kind of weak and then just on your 45-nm ramp and what your schedule is there and maybe talk a bit about what your partner is going to be in that market and whether you’re going to stick with UMC or maybe look outside?

We continue to see weakness in North America in terms of distribution and so I think what was started for us in June is running about the same level. It’s not really horrible but it is relatively softer then the rest of our overall business would indicate. So and that has shown up in the North America primarily. Other geographies really not so much and we’ve been able to at least match any of those declines with sales from our larger customers which are more direct in nature. We’ve seen I would say pretty consistent level, I don’t think it’s gotten weaker as we went through the September quarter. I think it started in June and stayed at a somewhat, somewhat declined from the run rate that we had been experiencing in the previous several quarters.

About the manufacturing opportunities we’ve demonstrated through the help of our manufacturing partners that we can and have delivered leadership and at every node we reassess that to make sure that we can continue to provide the leadership that is expected and required by our customers and so we’re doing that at every new node and we just make the right decisions. Obviously the partners that we have have enabled us to deliver on that and it is our expectation that we will continue to deliver regardless of whatever partners we end up using. Obviously the incumbents have a major opportunity to continue to win our business. Typically we have had more then one fab and that strategy, or one then one manufacturing partner and that strategy has worked really well for us and we intend to continue it in the future.

Your next question comes from the line of Christopher Danely – JP Morgan Christopher Danely – JP Morgan: Within the com exposure can you just breakout sort of Asia versus North America, Europe and wireless wire line and then what’s your vision of the 65-nm ramp in products next year and when do you think it will begin to contribute meaningfully to revenue?

The 65-nm ramp I think we feel pretty good about for next year. Virtex-5 which is our product, which we said was 10% of our total revenue so we do expect continued strong growth from Virtex-5 and all its derivative families. The design win level has been quite high and that’s why we made the statement that we believe this is going to be the highest revenue in its lifecycle, the highest revenue producing product family ever in the industry and we feel really, really good about that. So we would view that to continue to grow at a pretty significant ramp next year as many designs start to come into the space where we’ll start to be delivering product in a reasonable volume there. Relative to our communications breakdown wire to wireless A-Pac versus North America I don’t know how granular we’re really going to be able to get for you here but essentially in Asia Pacific wireless was very strong for us and wired was down but the wireless more then offset that for the most part. North America was down and I would say that’s driven more by our wired position then it is our wireless position in North America.

Your next question comes from the line of Ruben Roy - Pacific Crest Securities Ruben Roy - Pacific Crest Securities: The 15% of revenues you said come from wireless, but you say the majority of that comes from Asia Pac at this point?

I don’t have the numbers at that degree of granularity right in front of me right now.

Your next question comes from the line of Randy Abrams - Credit Suisse Randy Abrams - Credit Suisse: Could you talk about the decline in defense in the third quarter, what drove that and then computing has come up through second half, are there any new programs that could drive a rebound or do you think slow macro that remains at lower levels?

On defense, there’s not anything really specific on defense. It was just a buying pattern of a couple of handfuls of customers that had bought more in the previous quarter and bought less this quarter so that was really the only thing. It was not any one specific program or sector so there’s really not anything that’s very remarkable there because they’re still up and down depending on programs and how they rollout with the government even though typically when new money happens starting in the December quarter starting in October, is when we get our pop. On the computer and data processing segment storage, we had a couple of customers that had a significant relative to our size of storage, which isn’t very large anymore, increased last quarter and those essentially didn’t reoccur and so that really contributed. We were up last quarter and then back down because of these two customers that bought a reasonable amount from us. The computing part of the data processing segment was down a little bit but the biggest percentage increase was really from storage.

Your next question comes from the line of Srini Pajjuri - Merrill Lynch Srini Pajjuri - Merrill Lynch: On the margins, you said V-5 growth is impacting the margins negatively, I’m wondering at what point will V-5 be accretive to margins and also talking about the 45-nm, what kind of incremental R&D spend do you expect as you rollout the 45-nm?

V-5 margin profile, we’re just a little bit under the corporate margin range right now, not a great deal but a little bit and a few points, and I think within a couple of quarters it probably is going to be above the margin. It depends on mix a little bit too and whether the products, how new it is in its generation and because we’ve rolled out a lot of different families and different devices I mean, so those tend to have slightly different profiles so it does depend on mix a little bit. But we’re doing really well there and I don’t, in terms of talking about next year’s numbers and a strong V-5 profile I don’t anticipate it being a drag in any way on our margins. We continue to do well there and we have more headroom to improve margins. On 45-nm spending we really haven’t, our fiscal year is at the end of March and we really haven’t gone through a full year budgeting process so its difficult for us to give you full impacts. Clearly as we introduce our product families, we’re going to have some increased mass spending but we haven’t worked out how we might offset that or how much we can or cannot offset that throughout the year with other kinds of benefits anywhere from gross margin to SG&A or elsewhere in R&D. But I think we are going to have to have quite a few tape outs and quite a few events there so we’ll keep you posted as soon as we work through all the timing on that and we go through our budgeting process in the next quarter.

Your next question comes from the line of John Dryden - Charter Equity John Dryden - Charter Equity: Within military can you discuss if growth is more of a replacement of existing FPGA designs or primarily share gain over ASIC and ASSPs and if possible can you breakout the growth rates of those two areas?

I don’t have the details but I can tell you that its not displacement of FPGAs, it’s a massive transition across the board from ASIC which just totally losing their viability and to some extent ASSPs which are becoming more and more targeted at only ultra high volume applications and military does not in any way, shape or form fall into that category. So we’re seeing transitions which are happening en mass. Amazingly another transition which is happening is even on old programs, customers are coming to us and they’re implementing devices which used to be standard products and/o ASIC and they just don’t have a viable solution because they’re getting end-of-life, they can’t handle the long military lifespan and they’re implementing those devices in FPGAs. And so this is, it’s not a displacement of old FPGAs and hence a cannibalization of existing business, it’s a totally new realm and its growing very rapidly. It’s actually the fastest growing business we have now. I don’t see in that world things changing. I think ASIC and standard product by and large are not viable anymore and with these customers, we are definitely in the center of their systems. There’s no doubt about that.

Your next question comes from the line of David Wong - Wachovia David Wong – Wachovia: You were talking in your prepared remarks about the new Spartan products, 3A and 3E, can you give us an idea of the price range at the bulk of these products and is the gross margin of these products typically above or below corporate gross margin?

There’s a variety of sizes of 3E architecture so you can buy one for $1.00 and you can buy them for $10.00 so there’s a pretty wide range and it also then depends on the package so then you can buy them for even more money depending on the price point is even higher depending on the package. So there’s a lot of range and variability in that particular area. The margins are probably more dependent on the end market that they serve then anything else. Because of the cost profile required for consumer applications and they’re ability to use maybe less expensive packaging and more simple products, etc. and the price sensitivity around those relative to alternatives that customers have, the margins tend to be lower on the pure consumer side. On the other hand margins that are in the communications business and carry some higher functionality within those product families would be much closer to corporate margins. Generally Spartan margins on average are a little bit below the corporate margins.

Your next question comes from the line of David Wu - Global Crown Capital David Wu - Global Crown Capital: Can I get some clarification from you on two things, first the investment tax credit has been implemented and I was thinking about on an ongoing basis in your fiscal 2010, what kind of a tax rate should I assume?

The R&D tax credit was signed into law in early October and our current view of our tax rate for the rest of this year inclusive of that is 21% for a full year basis even though we’re getting this catch-up that I talked about in the December quarter. So we haven’t really set a tax rate for next year yet. For now I guess 21% is a safe number to use.

Your next question comes from the line of Gary Mobley - Piper Jaffray Gary Mobley - Piper Jaffray: If I’m not mistaken you’re about 400 basis points away from hitting your targeted 30% operating margin target in light of a challenging macro environment are you now in a position where you’re accepting that it might take longer to get to that target or are you going to be as committed to getting to that target as you have been in the past with respect to the timeframe and thus might be a little more aggressive in cutting costs?

Its pretty situational and as I mentioned, if we look at these targets in both our revenue growth, CAGR and our other commitments as I’ll say mid term to longer term goals and at the Analysts presentation we talked about three year CAGR on revenue growth and kind of talked about we should be able to get to our 30% within three years and we’re going to try to get there faster, clearly a challenging macro environment situation puts pressure on us. One would hope that we won’t be in this kind of a situation for an extended period like as much as three years but if for some reason this turns out to be a deep recession we’re going to have to take some action. So we are very committed to the 30% number, we’re also very committed to make sure that we don’t make mistakes on our long-term investment profile such that we retain the value of the company and have an opportunity to grow it.

Your next question comes from the line of Sumit Dhanda - Banc of America Securities Sumit Dhanda - Banc of America Securities: If I run the rough math on your wireless business in terms of your exposure to that market last quarter and then the just reported quarter it seems like the growth was about 35% sequentially and then you’re targeting growth again in the December quarter, can you give us a sense of how much of this growth is really related to new design or market share gain versus organic growth in the wireless infrastructure market?

It’s pretty safe to say most of the increase is due to new designs and new capabilities. In particular we are well positioned in the TDS CDMA market in China with those manufacturers and specifically that was one particular technology that helped drive the increase. We continue to see replacement or additions to existing networks out there as part of the base of our wireless but the growth rate was really driven by new technologies, new design wins, and rollouts in various places around the world. Sumit Dhanda - Banc of America Securities: The TDS CDMA growth that you’re seeing, what sort of a time horizon that your customers are telling you or indicating to you in terms of how long this tail of growth can last? Relative to their deployment schedule how far along are you in terms of shipping your product?

I think it’s very much in the beginning of it but it’s really dependent on how many subscribers are collected by the telecom or the provider and exactly who is going to win the lion share of the extension or the add-ons as it gets more proliferated across the country. They’re also looking for selling that technology outside of China and there’s some opportunity there I suppose for them. It’s really hard to say. We get information that suggest that there’s a very strong push by the Chinese government in order to get more subscribers using this technology and therefore some of this start-up has happened. If they are successful in attracting the subscribers through however subsidy or however they may be doing it downstream, then we’re going to have a pretty nice run and long tail from where we are today. If it’s like more typical in other geographies, there’s bumps and it’s up and down depending on how successful they are in getting more subscribers. Obviously the customers we have in China are very aggressive and they think this is going to go on for awhile but we aren’t necessarily baking all of that aggressiveness into our long range forecast.

Your next question comes from the line of Analyst

On the new products for early next year, those are indeed 45-nm and if so who would the foundry be if you can disclose that?

We’ve finished rolling out all of our 65-nm product and we have a very comprehensive offering so the next very comprehensive set of solutions will indeed be at the next obvious process node and we are working with our incumbent foundries and we’re also looking at other opportunities. We make sure that we have a dual foundry strategy which enables us to deliver leadership in the same way we have in the past and we will continue to do that. We haven’t announced any names at this point in time.

In terms of wafer pricing with the dual strategy that you have, what do you expect pricing to be next year and could there be an advantage to having the dual source in terms of market conditions that we see today.

Obviously the pricing is not something we publically announce but one of the benefits of having dual source is having alternatives and having competition for our business so that does help us quite a bit and we are very pleased with what that has provided us with and obviously it is one of the considerations as we move forward to enable us to derive the same benefits in the next generation of products too.

Your next question is a follow-up from the line of Ruben Roy - Pacific Crest Securities Ruben Roy - Pacific Crest Securities: On the foundry if you were indeed going to source a foundry that you haven’t worked with in the past, can you talk about what your sense is on the cycle time of having production ready product out of that new foundry versus just moving to a new process node in an existing foundry?

We make sure that with our manufacturing partners we have smooth introductions of new products and if you look back to a few generations actually the transitions were bumpy. We know how to make those transitions. We’ve done them several times now with more than one foundry and we feel very comfortable in our ability to make those transitions. With each new technology node there are new challenges. To some extent having a absolute fantastic market position on 65-nm puts us in a great position to move to the next node which is not that different to be totally honest and that, we feel very comfortable in our ability to do that and the Virtex-5 is an example of how we made those transitions very successfully and introduced those product offerings very smoothly and just rolled them out and that learning plus some of the challenges that occurred are being applied to the new generation of product be it with existing foundries or potential of new foundries.

Your next question is a follow-up from the line of John Dryden - Charter Equity John Dryden - Charter Equity: Can you walk us through the components of the drop in long term investments, if this is different from your initial commentary concerning the credit market exposure and similarly can you walk us through the $30 million bump in long-term liabilities?

The long-term investment decline is really related to closing out some longer term investments and what we talked about the gains, that we had some gains in the other income and basically capturing some gains that were classified in treasury investments that were classified as long term. So those have been rolled over to shorter term government backed kinds of investments in order to stay as liquid as possible. The long-term liability, I’m not sure I can answer that right now.

Your next question is a follow-up from the line of Tim Luke – Unspecified Company Tim Luke – Unspecified Company: If you could provide what the headcount did and how you see that going forward and some of the players who have made a quarter update, [inaudible] removed them and then [inaudible] given the uncertain macro, do you have any color on how you’re approaching that?

Headcount was really flat quarter on quarter, it wasn’t a big change. The headcount was down because of our reduction in force adjusted for those actions, the headcount numbers were relatively flat quarter on quarter. Our posture going forward is obviously be quite cautious here. We have a number of projects that are in the hopper. We do have a fair number of skill set issues that we’re off recruiting for so our recruiting hasn’t gone to zero but I would not expect us to grow dramatically for the next couple of quarters if probably, we’ll drift up maybe a little bit but not, I wouldn’t say its going to be a significant number.

Your final question is a follow-up from the line of David Wu - Global Crown Capital David Wu - Global Crown Capital: In the article you mentioned EE Times, I was surprised to see that the least satisfaction from the people who fill out that survey were about software and I was wondering historically at least the last several years, Xilinx has been leading in the routing and placement software in terms of quality and speed and all that good stuff, what is still lacking in those software that the customers are still not satisfied with that? And Jon if we have calendar 2009 let’s say the revenues for the full year looks like its going to be down double-digit year to year, what would you do to your operating expenses?

We have a very big investment in the software world and we actually are continuing to invest heavily. It is true that as the devices are getting a lot more complicated and we typically have the lion share of the largest complexity devices just due to our market position and technology superiority that that’s where the software runs into the most challenges in terms of capacity and routing and turn around time and ease of use and the whole host of abilities, from my perspective its an opportunity. Coming from the EDA world where I spent 10 years prior to joining Xilinx there’s a whole host of issues that need to be addressed as you move from implementing systems in ASIC and standard products to FPGAs and what we intend to do as a strategy is to provide a set of a very comprehensive capabilities. However it is my very strong belief that there’s great opportunity for the EDA companies to continue to provide solutions primarily at the front end on the design creation side and what we are doing as a strategy is making sure that we have an approach that enables our customers to do the best implementation using the internal tools and to the extent that they can benefit from these external tools from third parties and the major EDA companies they will use those. I think coming from the EDA world this transition and the rapid reduction in the number of ASIC and the number of standard product that is being designed is forcing those EDA companies to move more and more of their development dollars to products which are front end oriented which will be relevant for the programmable world and if you look at Synopsis for example, the recent acquisition that they made of Simplicity is a good example of that. We work with them as partners and in addition to the tools we provide we enable these tools from these third parties and that will continue to be our strategy going forward.

I suppose if I knew it was going to be double-digit going into the year I might have a slightly different approach to it but you typically don’t know those things all the time but there’s no doubt that we would do things to pare back spending if things started to slip away in that particular way. We would however though; we would try to protect our current development portfolio of getting our next generation products out. That’s very important for us to do that. We may or may not decide to slip the calendarization of certain of those devices in order to try to make the P&L improve without significantly impacting our customers. So there’s a lot of factors that would go into it. We are committed to delivering operating margins and we would do what we think was prudent to pare back what we could pare back in order to have an acceptable level of operating margins.

There are no additional questions at this time; I would like to turn it back over to management for any additional or closing comments.

Thank you for joining us today. Our next earnings release date for the third quarter of FY09 will be Wednesday, January 14, 2009 after market close. This quarter we will be attending the Credit Suisse Annual Technology Conference on December 3.