Rick Muscha Jon A. Olson - Chief Financial Officer, Principal Accounting Officer and Senior Vice President of Finance Moshe N. Gavrielov - Chief Executive Officer, President and Director

Sameer Kalucha - JP Morgan Chase & Co, Research Division Ambrish Srivastava - BMO Capital Markets U.S. Ryan Carver - Crédit Suisse AG, Research Division Brendan Oliver Furlong - Miller Tabak + Co., LLC, Research Division Ian Ing - Lazard Capital Markets LLC, Research Division Ryan Goodman - Credit Agricole Securities (USA) Inc., Research Division Sidney Ho - Nomura Securities Co. Ltd., Research Division Steven Eliscu - UBS Investment Bank, Research Division James Schneider - Goldman Sachs Group Inc., Research Division William Stein - SunTrust Robinson Humphrey, Inc., Research Division Anil K. Doradla - William Blair & Company L.L.C., Research Division Delos Elder Deepon Nag - Macquarie Research Ruben Roy - Mizuho Securities USA Inc., Research Division Brian Peterson Nicholas A. Clare - Robert W. Baird & Co. Incorporated, Research Division

Good afternoon. My name is Ally, and I will be your conference operator. I would like to welcome everyone to the Xilinx Third Quarter Fiscal Year 2013 Earnings Release Conference Call. [Operator Instructions] I would now like to turn the conference call over to Rick Muscha. Thank you. Mr. Muscha, you may begin your conference.

Thank you, and good afternoon. With me are Moshe Gavrielov, CEO; and Jon Olson, CFO. We will provide a financial and business review of the December quarter, and then we'll 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 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. This conference call is open to all and is being webcast live. It can be accessed from our Xilinx Investor Relations website. Let me now turn the call over to Jon Olson. Jon A. Olson: Thank you, Rick. Xilinx sales were $510 million in the December quarter, down 6% sequentially. Weaker-than-anticipated sales were primarily due to the communications and broadcast end markets. In addition, consumer automotive sales were also slightly weaker than we had anticipated. Sales from North America were up sequentially driven by defense, while sales from all other geographies decreased. Turns were 57% for the quarter. Gross margin was a record at 66.6%. The improvement in gross margin was driven by favorable customer mix, as well as continued focus on margin expansion projects across our product portfolio. Operating expenses of $218 million including amortization, were lower than expected due primarily to the gain on the sale of a building, as well as lower-than-planned litigation expenses. New product sales were up 17% sequentially, with particularly strong growth from Kintex-7 and Virtex-6 FPGAs. Both 28-nanometer and 40-nanometer sales increased sequentially. Let me now turn to a discussion of end markets. Sales from communications and data center decreased 11% sequentially, including declines from both wired and wireless communications. Industrial and aerospace and defense sales increased 7% sequentially, with a double-digit increase in defense, offsetting flat industrial and declining test and measurement sales. All 3 subcategories in broadcast, consumer and automotive declined sequentially. Net income for the quarter was $104 million and included a tax benefit of $6 million, or $0.02 per diluted share related to the lapse of the statute of limitations with respect to certain previously unrecognized tax positions. Earnings per share was $0.38 per diluted share. Other income and expense was a net expense of $5 million, lower than planned due primarily to a one-time royalty payment. Operating cash flow for our December quarter was $123 million before $8 million in CapEx. We paid $57 million in cash dividends during the quarter and repurchased $20 million of stock. The tax rate during the quarter was 10%, lower than guided due to the $6 million reversal I mentioned earlier. Diluted shares for the quarter were 271 million shares. There was a 6.2 million share dilutive effect from our convertible notes. For questions relating to the dilution associated with our convertibles, please visit our Investor Relations website at www.investor.xilinx.com. Let me now comment on the balance sheet. Cash and investments were flat at approximately $3.2 billion. We have approximately $1.3 billion in convertible debt, and our net cash position is approximately $1.9 billion. Days sales outstanding increased 4 days in the December quarter to 41 days. Inventory dollars at Xilinx increased by $22 million sequentially, more than expected due to the lower sales than anticipated, as well as a planned increase in safety stock across newer technologies, in anticipation of future revenue growth. Combined inventory days at Xilinx and distribution were 131 days, up from 109 days in the prior quarter. We expect inventory dollars to be down in the March quarter and will continue to work towards our target of a 90 to 100 days of combined inventory. Let me now turn to a discussion of guidance for the March quarter for fiscal '13. Our backlog heading into the quarter is up sequentially. We expect strong growth from our 28-nanometer products. From an end market perspective, we expect communications to increase slightly. We expect industrial, aerospace and defense to be up sequentially, with growth from all 3 secondary end markets. Lastly, we expect broadcast, consumer and automotive to be approximately flat. As a result, we are expecting total sales to be up 2% to up 6% sequentially, with sales from all geographies up slightly. The midpoint of our sales guidance is predicated on a turns rate of approximately 58%. Gross margin is expected to be approximately 66%. Operating expenses in the March quarter are expected to be approximately $208 million, including $2 million of amortization of acquisition-related intangibles. R&D is expected to be between $108 million and $112 million, declining significantly due to a lower level of tape-out expense. SG&A is anticipated to be between $94 million and $96 million, increasing due to higher litigation spending, as well as the absence of the asset sale mentioned earlier. This will result in fiscal year operating expenses of approximately $855 million, slightly less than the $860 million in fiscal year 2013 guidance we provided last quarter. Other income and expense is expected to be a net expense of approximately $7 million. The share count is expected to be approximately 274 million shares. The tax rate for fiscal Q4 is expected to be between 13% and 14%. As a result of the recent reinstatement of the R&D tax credit, in fiscal 4, there will be a catch-up benefit to the tax provision of approximately $11 million covering previous quarters. Let me now turn the call over to Moshe. Moshe N. Gavrielov: Thank you, Jon, and good afternoon to you all. While there has been some weakness in the economic environment, I am pleased with the 70% sequential growth from our new products. This growth was driven by robust sales of our Virtex 6 40-nanometer product family, as well as a nearly 20% sequential increase 28-nanometer sales, which significantly exceeded our $20 million forecast. 28-nanometer sales were driven by our midrange Kintex-7 product family, offering unparalleled price performance per watt and a high-performance Virtex-7 family. As we begin 2013, I have grown ever more confident in our 7 series portfolio. We now have all 4 key elements of this optimized scalable portfolio in the market, all programmable FPGAs, SoCs, 3D ICs and the Vivado next-generation design environment that enable these next-generation devices. A broader portfolio is enabling us to increase penetration in many of the highest-growth electronics, applications and also combinations of these devices into ever smarter, bandwidth-hungry, 100-gig wired networks, wireless HetNets, data centers and vision-based systems. This broader portfolio has also enabled us to displace a large number of ASICs and ASSPs. Vivado is the industry's first SoC-strength design environment delivering unmatched time to integration. It reduces months of design activity to weeks, makes our next-generation devices possible. The current adoption of Vivado is now estimated to be already at roughly 35% of all of the 7 series designs. We continue to be very pleased with the 7 series rollout, which was without any question the most aggressive and complete new product introduction in our history. We expect healthy sales momentum to continue in the March quarter, with sales comfortably exceeding $30 million. While Xilinx has not been immune to the weakness in the economic environment, the innovation, differentiation and value advantages of our 28-nanometer product strategy has enabled us to clearly move a generation ahead and is driving accelerated share gains against both ASIC, ASSPs and traditional PLD composition. We look forward to providing you an update at our Analyst Meeting on March 5 in New York City. Let me now turn the call back to the operator to open it up for the Q&A session.

[Operator Instructions] Your first question comes from Christopher Danely with JPMorgan. Sameer Kalucha - JP Morgan Chase & Co, Research Division: This is Meer Kalucha calling in for Chris Danely. So I have a question on the communication side of things. Given your experience on pushouts in the December quarter, how are you thinking about the March quarter? Do you think there's a possibility of something similar happening? Or are you confident that whatever happened is behind us? Jon A. Olson: Yes, let me take that one. So the world is still pretty choppy out there for us, but we are certainly seeing signs of improvement. So for example, we're starting to see the beginning of what people have called the sixth phase in China of the TD-SCDMA, so 3G additional base station deployment, and we believe we were starting to ship some units, certainly not the full level at this point in time, but some units into that particular ramp. So that gives us a positive view of the world. Also I think most of what -- much of what we saw in this quarter was a combination of some sluggishness by large communications customers in terms of their end demand and also some inventory correction. And I would anticipate the inventory correction aspect of that to be -- have worked through -- throughout this past quarter, the December quarter, and therefore will be moving back more towards I'd say traditional end market sales in that area. So those 2 things together make me feel relatively confident that comps should be moving up. And we're kind of behind -- the worst of it is behind us. But anytime someone tries to call the bottom, they're usually wrong. So I'll give myself a little bit of an out there. Sameer Kalucha - JP Morgan Chase & Co, Research Division: Got it. And then just a little color on how you're thinking on the 28-nanometer ramp this calendar year going forward? Moshe N. Gavrielov: Well, we set targets of $10 million and $20 million in past quarters and exceeded them. We set a target of $20 million this quarter and significantly exceeded that. The target is $30 million, and we expect to significantly exceed that in this -- in the quarter we're in. So we're seeing that come out of the chute and accelerate and come plan and it's working well. So I continue personally to be extremely optimistic and enthused about the rollout of the 28-nanometer. Jon A. Olson: And we came out with our midrange product, which was targeted at the wireless communications area, and we just pointed out in the call how strong that Kintex business was inside of the 28-nanometer revenue. So we think we are on the path to achieving the kinds of growth in segment and share gains in the wireless segment with Kintex in particular. So that's been a strength for us and we have elements of all of our portfolio in production at this point in time. So things are moving quite well relative to the characterization and production worthiness of our portfolio. So pretty happy with it at this point.

Your next question comes from Ambrish Srivastava with BMO. Ambrish Srivastava - BMO Capital Markets U.S.: Outside of comm, can you please talk about the visibility in the other end markets? And then my quick follow-up, Moshe, on the 28-nanometer, can you help us understand whatever guidepost you can provide us to give us confidence that in 28, the non-comm segments will be bigger, i.e. in consumer and automotive that you have been talking about? Jon A. Olson: So from an outside comms perspective, I think we've gone through an inventory cycle or mini correction, if you will, in the industrial side of things. And across the board, all of our geographies are stronger in distribution backlog going into this next quarter and a lot of the industrial segment. They don't just serve industrial, but a lot of it is served there, and I believe there's -- the backlog is demonstrating some strength in the, I'll say, the non-aerospace and defense portion of our industrial. So I think -- we believe that both aerospace and defense and industrial, that category is our broad industrial name is one of our -- I think it will be one of our fastest growing, percentage-wise, segments that we have throughout this year. So I think there is -- the inventory issues have been worked through. We talked also about aerospace and defense growing in March, which is actually very -- it is not very typical for us, so again kind of not the seasonal patterns of aerospace and defense, but we have continued strong business there. So I think outside of comms, we have laid the seeds for accelerated growth across the board, and that's really attributable to our 45-nanometer Spartan class product, as well as 28-nanometer. Moshe N. Gavrielov: And with regards to 28 non-comms rollout, it really is an unparalleled generation of product in terms of its breadth and depth. And as such, it serves lots of markets, not only communications, as Jon pointed out, wireless communications is ideally serviced by the Kintex product line. But if you look at the broad product portfolio, it addresses all of the markets. And if you look -- I think, where we have a minimum of 1 year lead over our competition in terms of delivering samples to the products that really is a product that is targeted at automotive, industrial control, and of course, it also has communications applications, but it has tremendous breadth there. If you look at the high end of the product offering, where we don't have any competition, there's a broad acceptance that everyone who needs a high-end product, right, and that includes ASIC prototyping, but it isn't limited to ASIC prototyping, and for example, we're seeing a lot of military applications that are utilizing the unparalleled capacity we provide to customers there. So now this is not only a comm story, 28-nanometer is the broadest, the deepest portfolio and addresses all of the markets that we're in, including all of the ones that you mentioned. And some of them take a little longer to turn to revenue, some of them happen faster. But so far, the non-comms world is working well on 28 in terms of design wins and transition to revenue, continue to be very confident in that.

Your next question comes from John Pitzer with Crédit Suisse. Ryan Carver - Crédit Suisse AG, Research Division: This is Ryan Carver in for Jon Pitzer. So given comms is down sort of 11% and you guided it up slightly, if you look at sort of seasonality, I guess, first half is typically the stronger side of the comms business, with actually the March quarter being the strongest. So I mean, give us some of the pushouts and maybe the resolution of some of the fiscal cliff. I mean, how much do you think we may see an atypical growth pattern in comms this year, with potentially comms being stronger in the second half relative to historical? Jon A. Olson: I think we did say comms is up slightly in this next quarter, which is the first quarter of the calendar year and our last quarter of the fiscal year. And what I wanted to be as transparent as possible here because I am a little -- I'm always concerned about how strong snapbacks are going to be and things like that. So we do think it's going to be up, we do think it's going to be stronger, it's because some of the things I've said earlier, particularly on wireless customers and overall inventory. But we are seeing the big CapEx spending that has been talked about relative to some of the newer technologies rolling out, particularly in the wireless segment. And we are -- we do believe that those, assuming all the rhetoric about that is true in terms of are they actually going to have that CapEx spend, that we'll have a growing contribution from those spends as we move throughout the year, and that, I would say, it's likely that the second half would be better than the first half.

Your next question comes from Brendan Furlong with Miller Tabak. Brendan Oliver Furlong - Miller Tabak + Co., LLC, Research Division: I just had a quick question on the industrial defense in the December quarter, which appears to be -- I know defense was up kind of seasonal for you, but the flat industrial, traffic industrial, if you want to put it that way, appears even better to be than your peers. And then I just have a very quick follow-up on the tax rate for fiscal '14, if you could give us some sort of guidelines on where you think that's going? Jon A. Olson: Yes. So Brendan, in the industrial category, industrial and defense category for December, yes, we clearly had a really strong, I guess, you could call it seasonal contribution from that particular area, and the other end markets were a little -- were weaker and mixed. And I think one of the bigger -- the bottom of the industrial -- pure industrial part for us happened, I'd say, in the September quarter, and we just kind of was -- kind of bumped along again in the December quarter and largely all that inventory adjustment and -- had been worked out. And so we do think that, that's going to be stronger going into the next quarter. The defense spending was up not just in, I would say, in the defense side, but also the aerospace side, meaning the nonmilitary aspect of things for us in the December quarter. And we are shipping into some new programs in March that are kind of the first time shipments for a new family of products that we have for the aerospace and defense area. We're starting to ship those now in a reasonable big way over the next couple of quarters into one specific program. In addition to some of the other broad-based programs that are continuing into March. So while there's a lot talked about the whole sequestration and cut back and et cetera, and I think we've been impacted to some degree last year in that, we are seeing the selected programs that we've been successful in winning over the years to continue to move forward. So that feels pretty good for us. The tax rate for FY '14, so I specifically -- we have not done our full year forecast yet for the next year, so I really can't give you a specific number. But if you look at the -- what -- including the impact of the R&D -- reinstatement of the R&D tax credit, we guided between 13% and 14%. I think for now, that's as good number to use for our FY '14 as I can give you guidance, but I reserve the right to reset that when we get to the Analyst Day in March.

Your next question comes from Ian Ing with Lazard Capital Markets. Ian Ing - Lazard Capital Markets LLC, Research Division: Jon, so I think you've done a good job describing the advantages of your 28-nanometer families. But I think investors are still trying to reconcile the share commentary, both of you having about 65% to 70% share. It seems there's 3 explanations: number one, one of you is overestimating the share or both of you are missing an additional 1/3 of the market, you're both underestimating 1/3 of the market. Or perhaps the third explanation is that there's wins that you're counting that aren't going to yield the same historical number of production ramps and volumes. So which one do you think it is and why wouldn't it be number three? Moshe N. Gavrielov: Okay. So that's a great question, Ian. Look, we are very confident in our portfolio. I think at this point, the revenue is starting to grow to demonstrate that. It's still early days. The reason that we believe we have a stronger position is we have a broader portfolio, and there are elements of it where there is no competition, there's elements of it where the competition -- we were way ahead in terms of availability of the product. That provides us with a significant advantage. In addition, in other areas where you could say there wasn't a significant time lead to other side, where the benefit we have there is typically significantly lower power and -- but it's a [indiscernible] performance and actually now a much better software design suite. Several of these advantages are new and they're a result of an intense investment we've made in R&D. And so they're yielding now these superior results, and the customers are seeing that and sharing that with us. So those are the reasons we believe we have a very, very strong position. And now in prime time, it's starting to manifest itself and we'll see how it rolls out over the next 2, 2.5 years. We're expecting great things in terms of design wins there. They need to translate into revenue. You're right in pointing out that there's not even a -- not a perfect correlation between design wins to revenue, but we're seeing some really good results. And time will tell, but we're very confident based on the breadth and depth of our product portfolio and its superiority. I don't know into which of the 3 categories that falls, but that's how we see it.

Your next question comes from Srini Pajjuri with CLSA. Ryan Goodman - Credit Agricole Securities (USA) Inc., Research Division: This is Ryan Goodman in for Srini. Question on the comms business. Sounds like you're pretty positive on that for the year, both on the wireline and the wireless side, but I was curious more in the near term. You have LTE starting to pick up, but you've also talked recently about new IT budgets coming in, which will help on the wired side. Which one are you feeling a little more positive about in the coming quarter? Jon A. Olson: Well, I think the wireless gains are easier for us to tie back to specific activities going on geographically in the wired aspects of things, usually are much more diverse around a set of carriers and corporate providers in corporate spending, which is much harder for us to correlate precise -- more precise trends, et cetera. So I would seem to have a little bit better visibility, a little bit better confidence on what's going on, on the wired side. But that being said, we have one data center, high-speed connectivity kinds of design wins in the data center area that by the middle of the year and the second -- the mid- to second half of the year will start to kick in. So I feel pretty -- and these are areas that we have not participated in, in a big way in the past and we are now. And so I feel pretty confident that those design wins, which are more tied to data processing -- or excuse me, data center type companies that are -- have significant market share in those areas, I feel confident that midyear to second half of the year, those are going to start showing up as well.

Your next question comes from Romit Shah with Nomura Securities International. Sidney Ho - Nomura Securities Co. Ltd., Research Division: This is Sidney Ho for Romit. So in terms of your operating expenses, you guys have done a great job taking it down to like $208 million next quarter. I know you're probably going to talk about this in your Analyst Day, but generally, how should we think -- should we think of this as a new base for your OpEx and understanding that some of that is because of asset sale last quarter? And then a little longer term, your competitor has talked about 10% growth in OpEx this year. I know you don't talk about specific numbers now, but how do you guys think about revenue growth versus OpEx growth in the upcoming year? Jon A. Olson: Well, if you look at our guidance for our fiscal Q4 and then the previous 3 quarters, you'll see up and down, up and down, and it really is because of the crescendo, if you will, or the peak of the 28-nanometer tape-outs. We haven't added, I would say, a significant number of heads in the company, and we've actually had more geographic dispersion of the adds that we have had to lower-cost geographies. So we really haven't increased payroll base significantly, some, but not significantly throughout the year. It's really been a mask and wafer spending perspective. So when you look into next year, we do have some things we have to finish on 28-nanometer technology, and then we'll be beginning to launch the next generation of products, but those obviously won't have a high number of tape-outs going on until more towards the back end of the year. So we'll probably, likely, have a slightly different profile to our spending next year. I wouldn't fixate on $208 million as being the new normal flatline because, again, it's up and down depending on the activities we have in the tape-outs. And you're right, I'm not going to give you a number right now, Sidney, you'll have to wait until a few weeks until we get to March, and I'll be a lot more specific about it.

Your next question comes from Steven Eliscu with UBS. Steven Eliscu - UBS Investment Bank, Research Division: I just want to focus on the industrial segment some more. If I look at your guidance, it looks like you'll be, for the full fiscal year, you'll be down mid- to upper single-digits. Can you give us an idea of which of the subsegments within industrial have underperformed this past year and then if there's some type of snapback as we go into fiscal '14? Jon A. Olson: Yes. So the biggest underperforming subsegment has been defense. So we have -- we've pretty much felt that defense has been growing for us in the neighborhood of, on average, of about 10% per year, and this past year, it really hasn't grown much at all. It's been choppy and the growth rate has been fairly near 0. So that's probably been the biggest individual contributor to that particular segment. We aren't at our traditional peaks in, I'd say, the pure industrial area by a long shot or even in test and measurement. We're not -- our current run rate isn't near those peaks at all. So if those markets, as we believe they will, will start to come back next year, that should give us a significant benefit. And then hopefully the defense budget stuff gets worked out here in the next 60 days and people will know what to do and what not to do.

Your next question comes from James Schneider with Goldman Sachs. James Schneider - Goldman Sachs Group Inc., Research Division: I was wondering if you could talk a little bit about your expectations for the wireless segment as we move throughout the year, specifically on the geographic rollout. Is most of the wireless strength being driven by North America at this point? And what's your expectation for when China TD-LTE could start to kick in? And lastly, are you expecting anything material out of Europe, or other emerging markets, or India at this point? Jon A. Olson: Yes. So I think as we move throughout next year, we are expecting good North America spend environment, and we're also expecting China LTE to begin and start to ramp in the second half. Our best -- everyday, I guess I could probably give you a different version of the story and whatever, but our best views right now is it's the second half of the calendar year when that starts to ramp. I'd mention earlier that we're getting to start also -- getting the sixth phase of the TD capability going out to help round out some of the capacity issues, and that's going to be -- that's going to happen over the next 2 or 3 quarters. And then you're asking about -- specifically about Europe. I do believe that there'll be some activity in Europe. We've seen some signs of some things going on there. I don't think it's going to be a significant, a large contributor, it means -- but I think it's going to have some contribution. And I have no understanding of what's really going on in India, and I'm not willing to project when that might take off.

Your next question comes from William Stein with SunTrust. William Stein - SunTrust Robinson Humphrey, Inc., Research Division: I'd like to dig into the gross margin a bit, if I can. You delivered above target gross margin for the quarter, it's also above your long-term target and yet you're not blowing away revenue. So can you talk about the potential for that target to move? And what's the biggest driver, kind of over the next couple of quarters, that we should think about when we're contemplating on to model that? Jon A. Olson: Yes. So we have, really, over the last 3 years, really focused on margin improvement programs across the company and essentially leaving no generation of products unturned in terms of the things we can do to squeeze out some dollar -- positive dollars here and there, because we do have a pricing environment, and particularly as we go against nontraditional PLD competitors, it's a different environment for us and we have to make sure that we have the capability and the ability to stay in our business model while still competing vigorously against potential ASSP companies in other situations. So we have created a situation and a culture at the company over the last several years to really go after things, and that's both on the pricing side of being -- becoming much more mature and strategic about how we think about pricing, as well as some of the cost things we've talked about in the past. But that being said, if you just want to focus on this last particular quarter, we did have a drop in our communications by 11% or $30 million, and it was -- that drop was concentrated on a relative basis to a previous quarter in our large comms customers, which tend to have the volume pricing agreements that have -- put some level of pressure or they're below, in some cases, some of the designs are below our corporate average and corporate margin. So when you have less business sometimes, you can get an uplift in margin because of that customer mix. And we had both good cost profile and good contribution from improved cost across the last couple of technology generations so good improvement there. But we also had the losses in business that we probably -- which we would've had because we've had higher operating margin dollars if we were to have it. But that's really the reason why our gross margin popped up. We have been running at the top end of our model for some time now. There's not an artificial cap on gross margin, meaning because the model stays at 64 to 66 range, that doesn't mean we limit ourselves at 66, we'll take whatever -- we maximize whatever gross margin we possibly can get. We tend not to evaluate our model dynamically. We look at it once a year and decide whether we want to change it or not, and at this point in time, we're not changing it.

Your next question comes from Anil Doradla with William Blair. Anil K. Doradla - William Blair & Company L.L.C., Research Division: Moshe, I think my question was around your strength on 3G versus 4G. So as we see North American deployments in 4G and some of the 3G, 4G in emerging countries, can you share with us how you look at your market share in each of these technologies or does it depend more on end customer? And I have a follow-up. Moshe N. Gavrielov: Okay. Well, with -- if you look at our position in 28 vis-a-vis our position in 40, then in 28, Kintex was designed with a very close look at the needs of wireless. And we believe we have an overwhelming market share by definition, that has been used more for 4G than it has for 3G. And as a result, because it's a new rollout and Kintex-7 is a new product so my expectation is that as newer generations roll out, we have a better general position. And then of course, in some accounts, we have higher penetration, in other accounts, we have lower penetration. Generally speaking, we have a stronger hand, so if you look at the average position then it is better, but it is account specific. But the breadth at 4G in terms of the penetration is really very, very broad, and the faster that rolls out, the better off, I believe, our position will be. Having said that, we gladly welcome any fast 3G rollout too. We have a lot of design wins there. The other element to keep in mind is regardless of market share, which everyone spends too much time focusing on, the reality is that from generation to generation, the percentage of the bill of materials, which is implemented on the FPGA has typically gone up. Now it doesn't go up every single time, but as a generalization, it has gone up. And as a result, there should be a higher percentage of the bill of materials in 4G solution, which is implemented in there than there is in the 3G. So just generally speaking that FPGA SAM is growing from generation to generation. And our percentage there, we believe, with the 28-nanometer should grow too, in particular with Kintex, which is a home run with regards to wireless penetration.

Your next question comes from Glen Yeung with Citigroup.

This is Delos Elder on behalf of Glen. I wanted to ask you about order linearity during the quarter, sorry, linearity during the quarter. And then with respect to some of the most recent order trends, how does that fare between distributors and direct sales, direct customers? Jon A. Olson: Yes. Our linearity, I would say, was pretty -- I'd say, typical until we got to the very end. So October was pretty strong for us, and November was the middle month of the quarter as typically things slow down a little bit and it did, and we got into December and things were okay. And the last 2 weeks, it wasn't quite as good as we'd anticipated, which is why we missed our guidance slightly on the bottom end because of the last 2 weeks of the quarter. And that was really a combination of less-than-anticipated volume through distribution than we had anticipated and a little bit of rescheduling into the next quarter that we saw. So those are the primary drivers of what went on and essentially why we missed our orders slightly outside of our range. Relative to the profile of orders and backlog increase and how things have been going so far between distribution and direct, as I mentioned earlier, distribution backlog was stronger pretty much across-the-board for us and that was really good. And our direct backlog also was up from a quarter, beginning backlog from the previous quarter and then going into this quarter. So I wouldn't think -- I don't see any, really, difference between the 2, meaning they're both seem to be improving and not one versus the other.

Your next question comes from Shawn Webster with Macquarie. Deepon Nag - Macquarie Research: This is Deepon for Shawn. If you could talk a little bit about the inventory pop. I know last quarter, you kind of talked about how it was mostly built over 28-nanometer products. Was it something similar? Just maybe the value in the mix of that inventory and what you plan on doing to get it down? Jon A. Olson: Yes, so the inventory did go up $22 million. Now some of that was a lower revenue profile, but we're also building safety stock increases in advanced technologies, inclusive of 7 series. Now Moshe talked about us having a target of $30 million for revenue for this quarter in the 28-nanometer technology or 7 series product families. And so we are building product in anticipation of that number are a greater amount of revenue so we have the right mix of products to be able to serve everything to our customers. But we're also increasing safety stock in a couple selected products, across a couple of older technologies, meaning 40-nanometer and 65-nanometer, also in anticipation of some very specific orders. And that caused their inventory to go up. Now we are a little bit out of mix and balance in terms of line item by line item. We were adjusting wafer starts, starting at the beginning of this past quarter, means the beginning of the December quarter. So those outs will start to fall, if you will, in the March and June quarters and will be bringing our inventory dollar level down, we believe, in both quarters, March and June, the dollar should fall.

Your next question comes from Ruben Roy with Mizuho Securities. Ruben Roy - Mizuho Securities USA Inc., Research Division: Moshe, I just had a follow-up on some of the Kintex comments that you were making earlier. The first midrange product you mentioned that it was designed really with wireless infrastructure in mind. I'm wondering if some of the initial strength that you're seeing is coming from solely that market or if you're seeing strengths outside of communications for Kintex. And how is it lining up so far against your midrange competitive product out there, i.e. in comms specifically for instance, are you taking portions of the PCB that might have gone to your competitor? Or are you seeing some traction against other types of technologies? Moshe N. Gavrielov: Okay. Well, Kintex indeed was targeted at wireless, and one of the unique features of the strategic decisions we made was that we recognized that wireless required a combination of pretty high performance, but focused on low power, and we think we aced that one and got the right combination there, and that has provided us with a very strong position there. And that's basically the strength together with very strong and actually industry-leading service, which again is -- has become a strength for us as we have invested very heavily in developing that capability. If you look at what is happening, then -- note, this is -- it's true that the product had, as its initial target wireless, but it has a broader reach than that. And we're seeing design wins on Kintex that address all markets that need higher level of performance and are cost sensitive and just don't require the ultimate performance for which Virtex is the right solution. So there's a lot that falls into that category, and actually we see that market expanding relatively rapidly. And if you look at the challenges, and to be honest, mistakes we made in the past, we did not have product that addressed that market and it went elsewhere. Now generally speaking, what we're seeing is, and I'm amazed that the data, because we predicted that this would happen and would start accelerating, and this is the ASIC and ASSP displacement, and that continues to grow and with each generation of product, there's like a quantum leap in the percentage of the bill of materials we can address because we can -- we have typically higher capacity, higher-performance and lower power. And except for high volume applications, the ability to justify ASSPs or for semiconductor companies -- sorry for customers to justify ASICs, for semiconductor companies to justify ASSPs, that gap continues to grow. And as we move -- have moved very rapidly into 28, we're benefiting from that, it requires having the right products. And one of the new elements we have is with our SoC device, Zynq product line, which is we've been delivering to customers for well over a year, that enables us to address new market, where we're displacing lots of medium and lower end ASSPs that -- and micro-controllers that our customers have been using. And as we come out with the higher end versions of the Zynq family, which are already available to customers, we can continue to move up in terms of product displacement. So there's largest share of the bill of materials, it's something we're seeing. And as we look at the detailed data, we're looking at ways to share that in March. We're just seeing that trend accelerate, and it's quite gratifying and that's one of the reasons that we are very bullish about the size of the market that is served at 28-nanometer by FPGAs and by Xilinx in particular.

[Operator Instructions] Your next question comes from Hans Mosesmann with Raymond James.

This is Brian Peterson stepping in for Hans. Can you just talk about wafer availability and if that improved in the quarter, and if that impacted gross margins or maybe your decision to add a little bit of inventory, especially on the 40- or 65-nanometer processors? Jon A. Olson: Yes. We generally don't have any, I'd say, significant issues on wafer availability. Now it doesn't mean there aren't -- there isn't some tightness at the foundries, but we've been able to navigate around that some. So it didn't really impact our gross margin as a result of any actions that we've taken or we are taking on the safety stock increase that's material or substantial. But quite frankly, we have built ahead in a few products that we are fairly confident we're going to get orders from just in case we -- I mean, just to make sure that we have the right mix in order to meet upside in the face of what I would say normal kind of tightness at the foundries, nothing extraordinary at this point in time. So to answer your question, it's kind of yes, we're building safety stock because there are some concerns that things could be getting tighter over time.

Your final question comes from Nick Clare with Robert Baird. Nicholas A. Clare - Robert W. Baird & Co. Incorporated, Research Division: This is Nick calling in for Tristan Gerra. So I guess 2 quick ones. First, from a higher level, do you guys have any type of industry-wide kind of growth estimate for base station deployments for this year, or for your fiscal year, or calendar year, either way? Jon A. Olson: No. I think you could get -- maybe Moshe has got something to say here, but I think we could talk to everyone of the predictors that studies this kind of stuff, and they all give us a slightly different view. So I'm not sure there's one that's right or one that we're subscribing to. Moshe N. Gavrielov: We'll share our insights in March, right, to the best of our ability. But this is a prediction and we do obviously talk directly to our customers, and we have a central role in terms of fulfilling their requirements, so we'll try to translate that into something which you can hang your hat on. But generally speaking, when you break it down geography by geography, they ebb and flow not all at the same time and there is an expectation that some of the geographies that have been weak will actually have a significant deployment. And Jon did talk about China as being one of those. We'll try to give you better predictions, but we don't want to throw out a number at this point.

Thanks for joining us today. We have a playback of this call beginning at 5 p.m. Pacific Time, 8 p.m. Eastern Time today. For a copy of our earnings release, please visit our IR website. Our next earnings release date for the fourth quarter of fiscal year '13 will be Wednesday, April 24, after the market close. This quarter, we will be holding our Analyst Meeting on March 5 in New York City. We look forward to seeing you there. This completes our call. Thank you very much for your anticipation.

Ladies and gentlemen, thank you for joining today's conference call. You may now disconnect your lines.