Thomas Krause – VP, Corporate Development Hock Tan – President CEO Doug Bettinger – SVP, CFO

Ross Seymore - Deutsche Bank Romit Shah – Nomura Securities Dean – Citi Mark Lipacis – Jefferies Vivek Arya - Bank of America Merrill Lynch Joanne Feeney – Longbow Research Brendan Furlong – Miller Tabak Ian Ing – Lazard Capital Markets Vijay Rakesh - Sterne Agee Chris Danely - JP Morgan [Sean Bocky] - JP Morgan Sanjay Devgan - Morgan Stanley Blaine Carroll - Avian Securities Edward Snyder – Charter Equity

Good day ladies and gentlemen, and welcome to the second quarter 2012 Avago Technologies earnings conference call. [Operator instructions.] I would now like to turn the presentation over to your host for today, Mr. Tom Kraus, vice president of corporate development and investor relationships. Please proceed.

Thank you, operator, and good afternoon everyone. Joining me today are Hock Tan, president and CEO, and Doug Bettinger, chief financial officer of Avago Technologies. After the market closed today, Avago distributed a press release and financial tables describing our financial performance for the second quarter of fiscal year 2012. If you did not receive a copy, you may obtain a copy of the information from the Investor section of Avago’s website at avagotech.com. This conference call is being webcast live, and a recording will be available via telephone playback for one week. It will also be archived in the Investor section of our website at avagotech.com. During the prepared comments section of this call, Hock and Doug will be providing details of our Q2 fiscal year 2012 results, background to our Q3 2012 outlook, and some commentary regarding the business environment. We will take questions after the end of our prepared comments. In addition to the US GAAP reporting, Avago reports certain financial measures on a non-GAAP basis. A reconciliation between GAAP and non-GAAP measures is included in the tables attached to today’s press release. Comments made during today’s call will primarily refer to our non-GAAP financial results. Please refer to our press release today and our recent filings with the SEC for more information on the specific risk factors that could cause our actual results to differ materially from the forward-looking statements made on this call. At this time, I would like to turn the call over to Hock Tan. Hock?

Thank you Tom. Good afternoon everyone. We’re going to start today by reviewing recent end market business highlights. Then Doug will provide a summary of our second quarter financial results. Revenue for Q2 was $577 million, which was at the midpoint of our guidance. This was up 2.5% from Q1, but only up 3% from the same quarter last year. While results for our wireless and wireline markets were in line with expectations, our industrial revenue came in stronger than we had forecasted. Nevertheless, year over year industrial was still down 26%. In contrast, however, wireless was up a strong 26%. As we also discussed in our last earnings call, we saw stabilization of the industrial market as we entered Q2. However, as March came around, we started to experience strong recovery in China. As I sit here today, we believe the industrial market is now on a solid path to recovery, with Asia-Pacific leading the way, but Europe and North America continuing to ladies and gentlemen somewhat. Let me now provide more color on our end markets. Starting with wireless, to put it in perspective, the first half of our fiscal year would typically experience seasonal weakness. However, as you may recall, it was not that way in Q1 this fiscal year. In fact, wireless revenue in Q1 was robust, as we ramped up volume at a major OEM. This held up in Q2 despite normal seasonality in the broader industry. As a result, year over year our wireless revenue grew a strong 26%, and in total revenue from wireless represented 44% of our second fiscal quarter revenues, of which approximately 3/4 were derived from smartphones. Now looking to Q3, we do see two near term challenges to sequential seasonal growth. The first is the constraint on the availability of Qualcomm’s next generation 28 nanometer fully integrated LTE baseband, where we have been very well positioned. This constraint will limit our revenue from multiple OEMs this quarter, and could negatively impact growth in Q3 by approximately $8-12 million. Secondly, the ramp we enjoyed in Q1 and sustained in Q2 at a major OEM is now facing a significant product transition, and could impact our Q3 wireless revenue by another $10-15 million. Based on these two factors, we expect our wireless revenue to be flat, maybe slightly down, in what would otherwise be a seasonally up quarter in Q3. Having said all that, we expect shipments for the Qualcomm’s 28 nanometer baseband to reflect pent up demand in our fiscal Q4. We also expect completion of the product transition and ramp of the next generation product at that major OEM to drive fiscal Q4 wireless revenue growth again. And in fact to prepare for this ramp in Q2, we invested approximately $40 million in process improvements and added capacity, and we plan to invest roughly another $45 million this quarter and reposition over $15 million of inventory ahead of this ramp today. Turning to industrial and automotive target markets, revenue here accounted for 22% of Q2 revenues, and grew 9% sequentially. But I must emphasize, this level is still 26% below the same quarter a year ago. As I mentioned earlier, during the quarter we saw the industrial market start to recover. China demand returned in Q2, up over 25% quarter-over-quarter growth, and we expect the momentum to continue in Q3, driven by resumption of investment in power generation and distribution as well as for machine tools and factory automation. Spending in high-speed transportation has also resumed, though much of this spending appears to be benefiting largely indigenous industrial companies to date. Japan, North America, and Europe have largely depended on exports to emerging economies, and are still in the very early stages of recovery due to a lag in their supply chains. As our OEM customers in these geographies recover, however, driven by China, we expect growth of our industrial revenue to accelerate to the mid-teens sequentially in Q3. Moving on to wired infrastructure, revenue here represented around 30% of Q2 revenues. As we expected, this revenue grew 4% sequentially, but a rather disappointing 5% from the quarter a year ago. While we continue to gain share in our SerDes-based ASICs going into data center switching, we are achieving this in a conservative demand environment for enterprise networking and carrier routing. Notwithstanding this rather flattish revenue, design wins were strong in Q2, as we continued to secure next generation programs in the enterprise for 40G optical interconnect and more complex, low-latency, low-power data center switches. We’ve also secured successfully designing into next generation core routing for 50G and 100G optical interconnects. But really what drives, for us, short term revenue is the conversion to 10G in networking and computing, and it should continue to drive sequential revenue growth in the low to mid-single digits, even in this uncertain environment. Finally, revenue from consumer markets continued to be a small portion of our quarterly totals, and represented only 5% of our Q2 revenues. This was a decline of 9% sequentially, flat from a year ago. Continuing this mode of harvesting our non-strategic and mature products here in consumer, we have decided to convert the business model of manufacturing and selling products to one of licensing designs and related IP, thus securing a future royalty stream instead of product sales. So to sum up, in Q2 we grew 2% sequentially, driven largely by industrial and automotive, despite an uninspiring demand environment for wired infrastructure. For Q3, while we do not expect a typical seasonal uptick in wireless, we expect strong continuing industrial recovery to drive overall revenue growth of between 3% and 6% from Q2. As I mentioned earlier, we expect Q3 to be the transition into a strong revenue ramp in Q4 for our wireless business. Coupling this with continued recovery of industrial markets worldwide, we feel good about significant uptick in our Q4 consolidated revenue. Before I turn this call over to Doug, I would like to inform you of a recent material development. As you all know, we have been in litigation with Triquint on several issues related to FBAR and BAW filters. We now have reached a settlement with Triquint, unfortunately the terms of which are confidential between the two parties. One thing that I can tell you, though, is the settlement will have a favorable financial impact for Avago. With that, let me now turn the call over to Doug for a more detailed review of our second quarter 2012 financials.

Thank you Hock, and good afternoon everyone. Before reviewing the second quarter fiscal 2012 financial results, I want to remind you that my comments today, as always, will focus primarily on our non-GAAP results. A reconciliation of our GAAP to non-GAAP data is included with the earnings release that we issued today, and it’s also available on our website at Avagotech.com. Avago Q2 revenue of $577 million increased 2.5% from last quarter, and 3% versus the same quarter a year ago. This sequential increase was in line with our expectations. And as Hock reviewed, revenue from our industrial target market came in stronger than we expected. Revenue from our wired and wireless target market came in approximately as we expected. And then finally, for the consumer target market, revenue declined 9% sequentially, and this was a little bit worse than we expected. Last quarter we disclosed that Foxconn was a greater than 10% customer, and I want to let you know that they continued to be one this quarter as well. Distribution resales during the quarter grew sequentially nearly double digits, while inventory at our distributors grew in the low single digits. As a result of this, months of supply and distribution obviously declined. We remain encouraged by the trend in distribution resales we’re seeing today. Our Q2 gross margin was 51.1%, and this increased 50 basis points from last quarter, and it was also in the upper half of our guided range. The positive gross margin result was helped by a favorable product mix from stronger industrial market revenue. So now turning to operating expenses, R&D expenses for Q2 increased by $1 million to $79 million. SG&A also increased by $1 million to $45 million. I’d like to point out that these spending increases were partially offset by spending reductions due to lower variable compensation accruals. As a percentage of sales, R&D remained at 14%, and SG&A remained at 8% of net revenues. Income from operations for the quarter increased by $8 million sequentially to $171 million, and this represented 29.6% of net revenue. Compared to the $167 million for Q2 of last year, operational income increased by $4 million. Below the operating income line, we recorded a net gain of $3 million due to several factors, most notably from interest income as well as favorable foreign currency translations. Taxes of $6 million for Q2 were $1 million higher than the prior quarter. Q2 net income of $168 million increased 8% from the prior quarter, and Q2 earnings per diluted share of $0.66 was $0.04 higher than Q1. Compared to Q2 of last year, net income was $3 million higher, and for earnings per diluted share, it was $0.02 higher. And then just to summarize a little bit, the sequential increase in Q2 earnings was primarily attributed to higher gross margin and continued spending controls. Our share-based compensation in Q2 was $13 million. The breakdown of this expense for Q2 includes $2 million in cost of goods sold, $5 million in R&D, and $6 million in SG&A. In Q3 we anticipate share-based compensation will be approximately $15 million. And just a reminder, the company’s definition of non-GAAP net income excludes the share-based compensation expense. So now let me move to the balance sheet. Our days sales outstanding came in at 43 days. This was down 7 days from the prior quarter, as we benefitted from collections from shipments earlier in the quarter, the timing of Chinese New Year, and a continued strong focus on collections. Our inventory ended at $218 million, which was an increase of $25 million from Q1. Days on hand were 70 days, which increased 7 days from Q1. And as I stated in our last earnings call, we thought inventory would go up in Q2, which it did. This inventory growth is associated with higher revenue levels, builds to manage capacity as we head into a stronger Q4, as well as a purchase of wafers that enabled enhanced cost reductions from a specific supplier. We ended the quarter with a cash balance of $954 million, and we generated $211 million in operating cash flow. We spent $56 million in total on new capital equipment purchases. For Q3 we expect capex to be in the range of $63-73 million. At the beginning of the year, I told you our capex was expected to be approximately $200 million for the full year 2012. I now expect it will come in higher than that, as we are adding incremental FBAR filter capacity to support new business needs. In the quarter, the company consumed $6 million in stock repurchases. We essentially paused our repurchases during most of the quarter due to the timing of the annual shareholder vote on the authorization. After the shareholder vote, our board of directors authorized the company to repurchase up to an additional 15 million of our ordinary shares. On March 30 of 2012, we paid a quarterly cash dividend of $0.13 per ordinary share, and this consumed $32 million of cash. The dividend was raised by $0.01 from the prior quarter, and since the inception of our dividend program in Q1 of 2011, we have continued to increase our dividend each quarter. We also continue to evaluate potential strategic investments and acquisitions as another way of deploying cash to maximize the return to our shareholders. So just to summarize my points regarding cash flow, our Q2 cash level shows that our cash generating capability continues to be strong despite higher cash outlays for capital equipment and increasing dividends for our shareholders. Now let me cover the balance of our non-GAAP guidance for the third quarter of fiscal 2012. This guidance reflects our current assessment of business conditions, and we do not intend to update this guidance. Revenue is expected to increase 3-6% sequentially from Q2. Gross margin is expected to be approximately 51.5% plus or minus 75 basis points. Operating expenses are estimated to be approximately $129 million, the increase being driven by incremental R&D project spending. Interest and other is projected to be approximately $1 million. Taxes are forecasted to be approximately $7 million. And finally, the diluted share count forecast is for 254 million shares. That concludes my prepared remarks. Operator, if you would, please open up the call for questions.

[Operator instructions.] Your first question comes from the line of Ross Seymore with Deutsche Bank. Please proceed. Ross Seymore - Deutsche Bank: The wireless side, Hock, you talked about roughly $22 million at the midpoint of impacts from those two drivers with Qualcomm’s issues, and then a product changeover. When you look out, is that the sort of magnitude you expect to snap back wholly in the October quarter? How should we think about those revenues coming back?

[laughter] No, there’s no connection really with the snap back in the October quarter, between these product transitions. Remember, a product transition is from an older product, existing generation product, which is tailing off, and a total new ramp in Q4. So there’s no connection in that regard. With respect to the support devices for the Qualcomm 28 nanometers, 8000 series baseband, yeah, there is probably some connection to the extent that we missed it this quarter. It will likely pop up next quarter. Ross Seymore - Deutsche Bank: Doug, on the opex side of things, you mentioned that variable costs were down a little bit as an offset against other increases in your April quarter. How variable is your cost structure, and how should we think about that, especially again in the October quarter, where you’re talking pretty favorably about your revenue outlook?

The way to think about it is really the variability is in kind of our bonus program. It varies depending on our outlook for the fiscal year. We kind of get paid on fiscal year attainment of certain financial metrics, and so assuming I’m estimating that accurately right now, it shouldn’t swing all over the place as we go forward into Q4.

Your next question comes from the line of Romit Shah with Nomura. Please proceed. Romit Shah – Nomura Securities: Hock, just coming back to wireless, we see all the same dynamics in wireless in terms of who is winning at the end customer level. You highlighted a product transition at one OEM. I’m wondering, when you look at design wins, are you seeing any impact, or would you expect to see any impact, from share loss?

I’m not sure I understand. Share loss? What do you mean, share loss? Romit Shah – Nomura Securities: If you look at your leading customers in the wireless space, there’s been some commentary from some of your competitors that their presence is improving at some of the larger handset ramps, and I’m wondering, as you look out at design wins that will go into production over the next 3 to 6 months, do you think there could be any impact to your market share versus what you saw in prior generations?

Well, to start with, we never focus on market share as a company. And number two, if I add up what every competitor says, everybody probably has in total more than 100% share in this market. But to answer your question, we really don’t want to comment on market share at all. I’ll stick to my comments, which is we’re now in the midst of positioning ourselves and preparing ourselves as we go through a major product transition in a major OEM this quarter and the Q3 quarter, because we fully are planning for a fairly substantial product ramp of our business in wireless next quarter. Romit Shah – Nomura Securities: I guess going back to Ross’s question, if you’ve got $20-25 million that’s going away this quarter because of that transition and some constraints, why wouldn’t you get at least that much back in October considering seasonality is also in your favor?

Well, I think the way I answered Ross was we’d probably get more than that. And the reason is you look at it as two separate events. One is for the constraints on the baseband. One that is missed out this quarter will reappear, likely, next quarter. If not in whole, at least in part. On the constraint of baseband to support it. With respect to product transition, the other issue, that’s a separate issue. That one relates to two events. One event is existing product that is heading down, that is declining because of product lifecycle, and a new product that will be ramping only next quarter. In between, that’s the other aspect of the product transition that we’re talking about. And that will be translated to numbers. The number impact I mentioned of $10-15 million for that product transition third quarter has necessarily no connection to what would be ramping up next quarter at all. Romit Shah – Nomura Securities: And then product transitions aside, as you look at your business more broadly, I’m sure you guys have heard about some of the issues in Europe, and I’m wondering if you’ve seen any impact or change to your weekly order patterns in the last 30 days.

In Europe? Romit Shah – Nomura Securities: Not Europe specifically, just looking at your business, let’s say, outside of wireless.

Well, outside of wireless, we’re talking industrial, and industrial has been, as I mentioned, since March of this quarter, has been from a flat position. Demand has been steadily climbing. That’s, in fact, in a lot of my remarks that has been the major point I have been making in this commentary here, which is it is industrial, a sharp industrial recovery out of Asia, that is driving, for this quarter especially, and part of last quarter, a big part of our revenue growth.

Your next question comes from the line of Terence Whalen with Citi. Please proceed. Dean – Citi: Hi guys, this is Dean speaking for Terence. I wanted to ask a little bit about capex. The fiscal year 2012 capex increased from $200 million to higher. Is this additional expansion compared to your original plan? And also, are you adding capacity for both FBAR and power amplifiers?

Yes, it is incremental capacity. And it is primarily focused in the wireless business, both FBAR as well as [unintelligible]. Dean – Citi: Now you have settled all the claims between Avago and Triquint, and from our Asia analysts we heard a Japanese company called Taiyo Yuden, their CEO claims Taiyo Yuden has starting manifesting FBAR filters since November 2011. So can you comment a little bit for that part? Is there any cross licensing between Avago and Taiyo Yuden?

Let me answer your second question first. There is no cross license between us and Taiyo Yuden, and other than that I have no comment to make on the claims Taiyo Yuden may have made in their press releases. Dean – Citi: If I may, just a quick follow up. Can you comment on the dynamics for the FBAR filter market in the future? If now we have two major players - there could be a third one - what do you expect the dynamics could be?

Well, I don’t know. That’s pretty presumptuous, how many players you say there would be. As far as we’re concerned in FBAR, there’s really only one major player, and that’s us.

Your next question comes from the line of Mark Lipacis with Jefferies. Please proceed. Mark Lipacis – Jefferies: On the industrial growth, can you sort of give us a rough breakout of how that business breaks out between developed markets and developing markets? And you may have said this, but was this driven by distributors building inventories, or do you think this is selling through?

Okay, to answer that question, it’s hard to break it down between developed and developing, and it’s not because we don’t have the simple, raw data, or whether we sell the products into Europe or U.S., versus selling into China, say. We have that data, but it doesn’t tell the whole story, because a lot of the large, multinational industrial OEMs we sell our products to in Europe or Japan or U.S. re-export their systems, their equipment, into China, into these emerging countries. So the end demand really comes a lot from China too. And splitting the two up makes less sense, but I would tell you this, the big driver in growth that we see here is out of China right now, directly or indirectly. We believe it’s out of China. And the second part of your question is this end demand alluded to by Doug in his comments about distributors, resales, and all that. We’re measuring purely resales. There are some large OEMs we sell direct, and others we go through distributors, but we are measuring the strength coming from resale of products to end customers, from distributors or directly to OEM customers. Mark Lipacis – Jefferies: And the transition in the consumer business to more of an intellectual property model, or licensing model, how does that transition play out over time? And what’s the impact to the business model for you guys?

Well, it’s less than 5% of our revenues today, and over time instead of a stream of revenues from product sales, it will become a stream of royalties. So obviously the revenue will be smaller, simply because it’s royalty revenues, and this will take effect from basically our fiscal Q4.

Mark, the revenue will be smaller, and the profit margin will be higher. Mark Lipacis – Jefferies: Fair enough. Last question, you said the patent settlement will be favorable. Are you talking on the top line, or some other line in the income statement?

The agreement’s confidential, so we can’t be more specific than what Hock already said. Sorry about that.

Your next question comes from the line of Vivek Arya from Bank of America Merrill Lynch. Please proceed. Vivek Arya - Bank of America Merrill Lynch: Hock, one more on wireless. Not related to market share, but if you look at your RF content per phone, at your top one or two wireless customers, do you expect that to stay flat or go up or down over the next few quarters? And what will drive that? Will it be more power amplifiers or filters that drive that change?

To answer your question more generically than anything else, because I can’t really tell you anything beyond one generation at a time in terms of specific design wins. But if you look at it from a trend point of view, smartphones going from 3G to 4G, and having to support all these bands, all those major bands going around, we expect our content in those smartphones to continue to stably increase. Quarter on quarter, depending on mix of individual accounts and the phones we support in those individual accounts, and the content we have, that might somewhat move around, but on a trended basis, it’s steadily going up, simply because there’s more content of both duplexes and power amplifiers. But from a duplex point of view, you cannot integrate duplexes. So every new band requires one duplex. So duplex will linearly scale up volume-wise as more bands are supported by any cellphone. Power amplifiers do get integrated and may not scale up equally. But we do both expect content to increase from both sides, except we expect FBAR to increase faster, from our perspective, than power amplifiers. Vivek Arya - Bank of America Merrill Lynch: And then one for Doug on the gross margins. I think you were giving some hints about Q4 trends. I’m curious, as that wireless mix comes back up, how should we think about the gross margins? I think the last quarter, October last year, when you had the big quarter for wireless growth, you had a few tens of basis points of margin compression because of the wireless growth. Do we expect something similar in Q4? And then structurally, how should we think about gross margins longer term if wireless continues to be the driver of top line growth?

I’m not going to guide Q4 gross margin for you right now, but I think I’ve told you before that the wireless gross margin of that business in total is a little bit below the corporate average. So if that gets to be a bigger percentage, everything else equal, gross margins will pull back ever so slightly. Understand though, what you also have going on here is what we see as a recovery in industrial, which is very good profit margin. So not giving you the complete story on Q4 yet, because I’m not quite sure, those things could offset one another. Vivek Arya - Bank of America Merrill Lynch: Hock, when do you expect the infrastructure side to get back up? Because everyone talks about a lot of LTE phones coming on the network, but nobody talks about anyone investing in the LTE networks. So when do you expect those more capex and infrastructure related sales to trend back up?

On wireless infrastructure investment, to be honest, I don’t know. It’s always been very lumpy, or spotty is the best way to describe it. And we see that constantly. Carrier spending, service provider spending, has always been very hard to predict. So I would not attempt to make any try at it. Having said that, our percentage of revenue going into wireless infrastructure as we have indicated before and mentioned earlier, it’s a pretty small percentage of overall revenues. So the impact on that, while positive for us, if there’s any growth, it’s not that major in this specific area of wireless infrastructure. Vivek Arya - Bank of America Merrill Lynch: But even as it relates to your wired environment, what is the impact of telco capex and infrastructure spending?

Most of our wired infrastructure revenue derives a lot - not totally - from enterprise networking and computing. Less so on telco. The only area we do have some exposure to is really in the space of edge and core routing for our very specific, unique, high-bandwidth fiber interconnects. Outside of that, we don’t do much in transport, or data transport, in telco basically. We’re mainly focused on enterprise.

Your next question comes from the line of Joanne Feeney with Longbow Research. Please proceed. Joanne Feeney – Longbow Research: I was wondering, given the midyear lull we’re seeing in wireless, plus the earlier recovery, perhaps, in industrial, do you feel like you’re still on track to achieve the midterm model targets this year?

We’re not going to make the revenue growth. We try to grow 10-12% a year every year. We’re obviously not going to get there. The rest of the metrics, I think we’ll be right in the ranges on. Joanne Feeney – Longbow Research: In terms of the wireless side, perhaps you could give us an update on the impact of the Triquint resolution, at least as it affects your FBAR prospects.

I don’t think there’s really any major impact, at least not in the short term, that we can discern. Not really in the longer term either, frankly. Because I think the demand for FBAR, as used in duplexes and smartphones, has rapidly increased over the last few years, pretty rapidly, which is part of the impetus for pushing this settlement resolution. Basically, the demand for FBAR is pretty good right now.

If you look at it, demand outstrips the supply today.

So why would we be fighting?

Your next question comes from the line of Brendan Furlong with Miller Tabak. Please proceed. Brendan Furlong – Miller Tabak: Just a question on the higher opex guidance for the July quarter. And you mentioned something about some incremental R&D spending. Just wondering, is that the new baseline we should think about going forward?

In terms of the R&D investment, yeah, it probably is, Brendan. The one comment I made a little bit earlier, I forget who asked the question, about the variability due to the variable bonus accruals, that can move things up or down depending on how our prognosis for the rest of the year looks. But assuming that doesn’t change, it’s kind of the level you should expect us to be at for the near term. Brendan Furlong – Miller Tabak: And a quick one for Hock then. On the industrial revenues coming back pretty strongly, have you any sense of, particularly in the Asian, Chinese markets, the distributor inventory levels. And they obviously took them down hard when you were down 26% year over year, but what do you think those disty levels are now. And can we continue to see some incremental growth there?

The key measure, when I talked about a sharp recovery in the industrial market in China, Asia-Pacific, is that we are seeing end demand resale from our distributors out to their end customers really accelerating at a fairly rapid pace. So obviously, distributor inventory has come down pretty sharply since then. Now, part of the reason for that sharp uptick would be that the Chinese companies have, during the industrial downturn in 2011, starting from early 2011 onto the rest of 2011, have brought down the level inventory they were holding in the OEMs, not distributors, in the OEMs, fairly sharply. So no surprise, typically, that they would be the first to bounce back on any increase in industrial infrastructure demand. The larger OEMs, multinational OEMs, I would say, as I indicated in my remarks, tend to have a much longer supply chain, and would therefore lag behind those indigenous Chinese companies who probably are showing what I call the early indicators of a recovery in industrial demand over there.

Your next question comes from the line of Ian Ing with Lazard Capital Markets. Please proceed. Ian Ing – Lazard Capital Markets: First question is for the industrial recovery. What are the prospects of recovering closer to the prior run rates? Or do you see some permanent adjustments due to some macro issues or changes in normal inventory levels?

I don’t know the answer to your question. It’s a good question. I keep throwing out to you guys that we’re still 26% year on year from 2011, if you look at last quarter on industrial, which I’m kind of trying to hint to you that we’ve got room to grow. But would it go to that level? I don’t know the answer, honestly. Would it even surpass? I don’t know. I don’t know what drives it. I believe something new that is driving it is the fact that one more renewable is floating around now, and that tends to be of a more permanent nature. How long that will last, who knows? And two is automotive, though that moves more slowly, more automotives are going electric and hybrid, and they tend to use more of the optical isolation products than, say, they did two or three years ago. So maybe that might have an impact, but I’m not sure that’s material. So to answer your question, I’m only guessing. I don’t know the answer. Ian Ing – Lazard Capital Markets: And maybe the wireless content question, I’ll rephrase that in a way. You’ve talked in the past about $6-7 as a high water mark for smartphone content for Wimax phones. You know, Sprint is repurposing their network for the prepaid. So how much of a reset is the high water mark when you look at LTE phones in terms of content?

You know, I don’t want to give you guys the wrong expectation, because if I tell you $5-6 phones, yeah, it’s real. It’s also hyping. Because nobody is necessarily buying all $5-6 from one guy of the content for any one phone necessarily. So you know, by the time they split up the business, like for some of the components, I can be differentiated. So to give it to my competitor. So it may end up $4, and that might be a more realistic picture. But theoretically, an LTE phone, roaming, world phone, could have that level of content, $6-8. Ian Ing – Lazard Capital Markets: But not in the near term, more like over time it sounds like.

It can be in the near term if there are OEMs who build phones that are able to roam in multiple geographies over multiple bands. Multimode, multiband phones is the term they use for it. Yes, it could reach that content right now, theoretically.

Your next question comes from the line of Vijay Rakesh with Sterne Agee. Please proceed. Vijay Rakesh - Sterne Agee: Just on the whole gallium arsenide side, if you pull that capacity in house, how do you see that affecting the margins?

It will improve it. That’s a given. But we’re not taking a lot of it. Most of our capex investment - I want to add on to what Doug was saying - is really in FBAR. As Doug was saying, we have more FBAR demand now than currently have capacity, which is why we’re making all this big, substantial, accelerated investments to up our capacity and process in FBAR. We did, also, earlier on, make some investment in gallium arsenide capacity, but that’s only a relatively small percentage of our overall demand. Much of our demand is still outsourced for gallium arsenide. Vijay Rakesh - Sterne Agee: And also, as you look at the whole data center side, outside of telcos, that should be growing very nicely for you with the Intel Romley and all that coming on. How do you see that in the second half?

Yeah, it’s continuing to grow, but as I always say, in wired infrastructure, on enterprise, it’s a steady Eddie. Our enterprise networking and computing business, as I said, is still growing, but at a more subdued, moderate rate than it had been a year ago or the last few years. And part of it, I suspect, is what we hear about a conservative demand environment in enterprise spending. That may lead to that. But we’re continuing to grow, and part of it is because we’re continuing to gain some share in data center switching.

Your next question comes from the line of Chris Danely with JP Morgan. Please proceed. [Sean Bocky] - JP Morgan: Hi guys, this is [Sean Bocky] calling in for Chris. Can you comment really quickly on the linearity of the bookings throughout the quarter? I know you mentioned March was especially strong, industrial side. I was just wondering, was April really stronger in terms of bookings, or as good as March?

It was pretty linear until the last part of the quarter when it stepped up sharply. [Sean Bocky] - JP Morgan: And then on the inventory side, I know you’ve talked about wanting to build a little bit in advance of some of these new product launches. How should we think about it over the next couple of quarters? Do you expect to work it down kind of to the mid-60 day level, or is this kind of a new norm for you guys given some of the new products coming online?

No, it will be flattish, I think, in dollar terms, and our inventory model is 60-70 days of inventory. And I’m not changing that, so we’re at the higher end. And we did it for the reasons I outlined in my prepared remarks.

Your next question comes from the line of Sanjay Devgan with Morgan Stanley. Please proceed. Sanjay Devgan - Morgan Stanley: I guess the first question for Doug, just to kind of follow up on some of the opex questions that were asked earlier, with the resolution of the Triquint litigation, I’ve got to think that there’s some kind of an unwind in the SG&A bucket with respect to litigation expenses going forward. I was wondering, given the opex uptick next quarter, does that encompass kind of a step down in litigation expense? Or is that still something that could kind of unwind later on, and that could prove to be a benefit down the road?

Litigation expenses are stepping down in the number that I gave you. You know, I’ve never specifically disclosed the quantum that we were spending on litigation, but I’ll tell you, we weren’t spending anywhere near the level of the number that Triquint was talking about. So don’t have that in your mind. But it is stepping down a little bit. Sanjay Devgan - Morgan Stanley: And just to follow up, for Hock I guess, you talked about a conservative enterprise environment. In spite of that, you’re going to grow kind of low to mid-single digits next quarter given some of the share gain opportunities you have in the wired infrastructure space. And historically, you guys have kind of talked about a doubling of the portion of this business over the next three years. We’re a couple years into that. I was wondering if you could talk to how we should think about this business longer term. Are there additional opportunities? Is it still too early to kind of lay out a new framework for this business? Any thoughts would be greatly appreciated.

No, we haven’t changed our long term business model. If you look back over the last two years, we’ve grown 30% a year roughly in this business. What we’re seeing now, I think, is a somewhat, I hope, near term change in thinking, where enterprise seems to have held back somewhat on spending. But over the longer term, given bandwidth requirements - and you heard that story all over - we still see a lot of demand. And the best indicator of it is the fact that design wins are, in this area, at an all-time high. So there’s a lot of designs going on for new next-generation products which we’ll always [unintelligible].

Your next question comes from the line of Blaine Carroll with Avian Securities. Please proceed. Blaine Carroll - Avian Securities: A couple questions if I can. Hock, first of all, when you look at the wireless business, and you’re talking about the bands. As you look at a phone today, versus a phone in six months, and a year from now, how many bands do you see being incorporated into some of these world phones? And then concurrently with that is, as you look at the bands for the FBAR - I know it’s very popular in band two, but what other bands do you see strong demand for the FBAR technology? And then a couple follow-ons for Doug if I can.

To give you - and if you can forgive me for that, because we are in this huge forum - and I’ll be happy to do it separately on a different occasion - but really what we do see is with LTE coming in, the phones have to be 3G and 2G, 2.5G compatible as well. So the number of bands you’re including in those world phones will get over 10, very fast. Over 10, if you want to have a world phone that roams in multiple continents, easily over 10, which puts in a lot of content. And in terms of FBAR, you’re right, CDMA uses FBAR. Band two uses FBAR in 3G, and in LTE more and more of those bands in LTE are using FBAR for no other reason than some of these bands may be difficult, like band two for signal reception. That’s why you need FBAR for better performance. But as you also have more and more bands crowded on the antenna on the phone, they start to interfere with each other. The issue of what we call coexistence. And when you have coexistence problems for reception, the way to solve it is to put in an FBAR filter. And that’s it. Just like you hear about this harbinger issue with [LightSquared]. A way to solve it, simple, simplistic-minded, is put in an FBAR filter. You immediately solve it. Of course, there’s a lot of legacy equipment that you have to go retrofit, which makes it impractical, but for new equipment, put in an FBAR, and you literally solve that problem. Blaine Carroll - Avian Securities: Phil Falcone never called you, huh?

[laughter] Blaine Carroll - Avian Securities: But Hock, do you see 10 bands in phones by the end of this year?

Some OEMs decide to run the phones where they do a phone for a particular local market or regional market. So they don’t need to make all their bands into one phone. There are some who put all the bands into a common phone so that it uses a single platform.

Not every phone. It depends on how the OEM runs their strategy on how they do their phone. Blaine Carroll - Avian Securities: Okay, makes sense. And then Doug, a couple of things. On the wireless business, the October snap-back that you’re sort of envisioning, could you talk about your visibility into that and revenue linearity in October? Is it going to be more back-end loaded?

You know, right now you have design wins line of sight in terms of the weeks that things are going to ship. Don’t necessarily know how Q4 is going to track. But we have enough visibility into the design wins to know the revenue ramp is going to be pretty steep and Q4 is going to be very strong for wireless. Blaine Carroll - Avian Securities: And then I just didn’t hear what you said about the industrial growth quarter to quarter going into the third quarter, going into July.

Mid-teens.

Your next question comes from the line of Edward Snyder with Charter Equity. Please proceed. Edward Snyder – Charter Equity: Hock, you talked about LTE, and that is coming on board. It requires both filters and PAs. What I’m wondering, though, is both Skyworks and RF Micro have made no secret of the fact that their high-efficiency amplifiers, which are relatively new, are winning a lot of sockets. We’ve been out beating the bushes, and they haven’t seen a lot of competition. I know Avago’s got stuff on the drawing boards. Do you expect to be competitive in that area before the end of the year? And then secondly, with regard to LTE, since most of these are going into LTE sockets, the majority, I guess, of LTE has been in 13 and 17 bands in the U.S. , because of Verizon and AT&T. And given the frequencies of those, I think the majority of the technology solving those band issues have been SAW, [unintelligible] SAW, given the size BAW would be for that, how expensive it would be. Is a lot of the growth that you’re seeing in FBAR mostly in the traditional bands? Or do you feel like you’re winning as much or more of your share in these new LTE bands given the - I don’t want to say disadvantage, but the parity that SAW would have in cost in the lower bands. And then I have a couple for Doug please.

To answer the first part of your question, I really don’t comment on my competitors’ offerings. Nor do we talk much about market share, if you’ve noticed. My competitors, I’m sure, do talk about their business model. That’s their prerogative. We choose not to talk about it. We do have competitive offerings and that probably is as far as I would go. We do have very competitive offerings. As far as FBAR is concerned, there is increasing demand for FBAR. And a big part of it, as I mentioned, is not just new bands that are difficult for signal modulation to transmit, and because of that require FBAR versus SAW. I think that may happen. Less of an issue as much as the bigger issue. And you can see that in Europe in band 7, band 20, where it is an FBAR kind of requirement for that band. But more than that, as you’re putting LTE and still have to run 3G and 2G, you basically have so many signals of various types going through your phone, you have, as I mentioned again, the issue of interference or coexistence. And once you have that, the easiest way, the best way to solve that is to start putting in more and more FBAR. And that’s basically the bottom line to it, not to mention ancillary benefits that FBAR stands to bring to the equations. I know they don’t cost less, but it brings typically much lower power, and very often much smaller dimension, which, in cellphones that are getting very, very crowded with other content, becomes extremely important. So there are multiple reasons why FBAR gets used, size and other things. Edward Snyder – Charter Equity: So forget about the competitive question then. Do you feel like you have a competitive high-efficiency offering today right now in the market, and you’re getting your fair share of those slots?

I don’t know if I’m getting my fair share of those slots, because I don’t go around checking my market share, as I said before. So don’t know about the fair share, but we have pretty good PAs out there. Very, very good PAs. Edward Snyder – Charter Equity: And then, Doug, a couple here. You’ve given guidance that the wireless, and especially the [gas] business is a little bit lower than corporate averages. We’ve seen in the last nine months some brutal pricing in [wiband] CDMA standard PAMs, which you guys are, by the way, the leader in, of course, on Qualcomm’s reference design. Does that guidance still hold if the mix doesn’t shift toward some of the newer products given the pricing environment? And then also, in terms of the $15 million in inventory you said you’d built up in preparation for the fourth quarter or subsequent quarter ramp, is this finished goods inventory? Are you building raw wafers? And is it for a specific design, or are you just building just general inventory because demand’s going to pick up?

I’ll answer the latter question first, Ed. It’s a combination of both. And it’s line of sight design wins that we’re building this for. Your first question, I’m really not changing any color on the wireless gross margin guidance. It’s holding in fairly consistently.

And at this time, I’d like to turn the call back to Mr. Krause for closing remarks.

Thank you operator. Before we close, I would like to let everyone know that Avago will present at the NASDAQ OMX investor program in London on June 26. These presentations will be webcast live and archived for replay in the Investor section of Avago’s website. Thank you for participating in today’s earnings call. We look forward to talking with you again when we report our third quarter fiscal year 2012 results in August.