Claudia Levo – VP, Global Communications Gilles Delfassy – President and CEO Timothy Lucie-Smith – SVP and CFO Jorgen Lantto – EVP, Chief Technology Officer & Strategic Planning Amada [ph] – Cherry Tango [ph] Marc Quiker [ph]

Richard Windsor – Nomura DDA Sharma [ph] – RBS Gareth Jenkins – UBS Jerome Ramel – Exane BNP Paribas Jonathan Crossfield – Merrill Lynch Matthew Hoffman – Cowen & Company Andrew Gardner – Barclays Capital Janardan Menon – Liberium Capital Odon De Laporte – Cheuvreux Martino De Ambroggi – Equita SIM Brett Simpson – Arete Research Nicholas Von Stackelberg – Sal Oppenheim

Good morning and good afternoon. This is the Chorus Call conference operator. Welcome and thank you for joining the ST-Ericsson fourth quarter and yearly 2009 financial results conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation there will be an opportunity to ask questions. (Operator instructions). At this time, I would like to turn the conference over to Ms. Claudia Levo, Vice President, Global Communications. Please go ahead, madam.

Thank you, Dena. Thank you and good morning and good afternoon to everyone. Thank you for joining our fourth quarter 2009 conference call. Hosting the call today is the Gilles Delfassy, ST-Ericsson’s President and Chief Executive Officer. Also joining him on the call today is Jorgen Lantto, Executive Vice President and Chief Technology Officer, Strategic Planning. Timothy Lucie-Smith, Chief Financial Officer and Fabrizio Rossini, Head of Investor Relations. This call is being broadcast live over the web and can be accessed through ST-Ericsson’s investor Web site. A replay will be available shortly after the conclusion of the call until January 29. We will be making forward-looking statements during the call today. These statements are based on our current expectations and certain planning assumptions which are subject to risks and uncertainties. The actual results may differ materially due to factors mentioned in today’s press release and discussed in this conference call. We encourage you to review the Safe Harbor statements contained in this press release that was issued with the results this morning. The usual reminder. Please limit yourself to one question and a brief follow-up question. And now, I would like to turn the call over to Gilles Delfassy, ST-Ericsson’s President and CEO. Gilles, please.

Thank you, Claudia. Good afternoon and welcome everyone. You have seen my first quarterly conference call in my CEO role. And also to the last quarterly conference call of the first year existence of ST-Ericsson. So a lot of first and last. But in any case in 2009 the hell of first year. As you will recall the company was formed actually in February of 2009 last year. The idea being to combine the strength of our parent companies, advanced modem expertise and what said, multimedia processing capabilities actually second to none in the industry. On the other side when noting with them they chose a perfect timing to create the company because it was just in the middle of the worst down cycle in the wireless industry we have seen in many, many years. So great vision here again. But anyway as I said this has been a unique and exceptionally challenging year for ST-Ericsson in several aspects. And on the other side we have had to look inside then face all realities. Face the issues associated with integrating three different companies, culture, start to identify and implement synergies, necessarily but painful restructuring plans put in place an integrated organization but more importantly staff transitioning of portfolio and devise the new portfolio strategy that would lead to us our next generation offering. And of course in the meantime we had to face the economic downturn and well as downturn that I mentioned and also that meant we have the shortfall of revenues in 2009. However, during the year the company made some good progress in (inaudible) but of course, much more needs to be done and will be done. I can grant you that. Finally, and in the second half of the year the markets start to come back to a little more normal seasonal impact then. Of course, we are recovering to the same level as 2008. And now, market researchers forecast for the wireless semiconductor market are little less negative than they were at the beginning of last year. But more interestingly, during the last quarter we have seen a confirmation of several clear dynamics and trends that provide some good indication how the markets will evolve during 2010 and beyond. So let’s talk about these for a second. First of all, high-speed mobile broadband is now a reality. You remember a few months ago mobile broadband and the consumer market meant to (inaudible) speeds of the few megabyte (inaudible) best combined with a lot of talk about next generation technology in fourth quarter of last year. Multiple mobile networks have actually moved to 21 megabyte per second speed. And LTE is getting much closer at the horizon every day. The move to HSPA plus 21 megabyte is especially important because consumers can see now speeds which I call a superior to they have with their fixed line connection that’s probably going to change the dynamics of this market and industry a lot. You know that very well. And of course we are very interested with that trend and change because of that we see (inaudible) thin modem HSPA and HSPA plus platforms, in particular M570 which has a lot of attention from the market. Today, we can discuss that more in detail. Of course, LTE also is becoming much more of a reality with very opening of the first network with Tedia [ph] in Sweden. Obviously, we are positioning ourselves to be a strong player in this market. And for example, by demonstrating with our parent Ericsson and the infrastructure division the mobility between LTE and HSPA networks using a multi modality HSPA device as a whole. We have also proven that LTE would be hardly integrated with other access technologies to provide global coverage, which, of course will help the vision of this standout. Obviously, the other very, very nodal trend happening in this industry is the shift, the first of shift to snap mobile devices and technologies. I’m not going to teach you anything if I tell you that the trend is that mobile phone and mobile platform are now at the centre of the convergence going between the communication, consumer and computing technologies. You know that better than me and you read newspapers that the thing I will tell you in this respect is that we believe that this is very good for us because it is playing to our strength because I believe that we have a lot of great attributes to benefit greatly from the trend to more and more smartphone and the higher and higher complexity and performance smartphone. And I want to give you just because of course I am sure that you hear from everybody in the world and (inaudible) of course in today that we are dominant in smartphone IC markets. So why are we different? So I want to give you a couple of at least indications of why we believe that. Now we will of course rely on the products that we have already announced of sample to give you examples. And first of all we have announced the first device in the world. We are using SMP with a dual-Cortex A9 processor featuring more than 3,000 brightstone needs and also by integrating multicore HSPA broadband modem at 14.4 megabyte per second (inaudible) the size of 6.13. So that’s a lot, that’s really a rich solution. (inaudible) of performance but of course as you know better than me performance is not everything. What we believe is good for us is that we manage very high performance with (inaudible) energy, power consumption, namely than other. For example, on the device we have estimated power consumption of 0.16 (inaudible) which compels pretty well with the industry. And also the used cases that we support and the device to give you a couple of examples. A lot of people are using MPC audio playback time to measure of our power consumption. So we are pretty happy with the 120 hours of playback that we announced for this device. And also it seems that people can take very long flash and (inaudible) movies because we support (inaudible) as a full HD video playback and battery which I believe (inaudible) of battery. So again a combination of performance and we believe a lot of consumption than others. Of course, we (inaudible) our devices. We have complete platforms. For example, integrated modems and application processors but also all the connectivity with (inaudible) and they are not only in hardware but also in software, for that, that from that they mentioned (inaudible) GPS, Bluetooth, WiFi and FM connectivity also. But now we can talk about good things that we have found in the basket of the bright coming from the consumer electronics expertise that at his team which allows us to have in my opinion very, very good video, audio, imaging and graphics performance for our platforms. You know thing that (inaudible) I know that we are only weeks or around that but I would not bore you too much. I will just mention dual displays of broad for example for platform which is really good enabling (inaudible) that it seems that (inaudible) is going to stay with us for a long time but we support that already on the 85.5 platform. In imaging we have a pretty good imaging engine. We support 20 mega pixel which I think is probably one of the best numbers in the industry. Audio as well again all the codecs including the 5.1 I don’t know if you want to have six loudspeakers attached to your phone, but just in case you want you can, and of course that was the lowest power consumption in the industry. I cannot give you the number because my colleagues have told me not to, but if you come (inaudible) in Barcelona (inaudible). So basic and of course we (inaudible) high level of breadth in systems, but clearly not every Symbian and Android or the early next levels as well. But mostly Android for (inaudible) and we believe that’s the right way to position ourselves for the future. So again, we are entering into the smartphone market, not as convenience or (inaudible) of decision that has been the evolution of long trend and that’s we believe well our expertise and our key technologies will be the best role namely advanced (inaudible) modem technologies and advanced shipment (inaudible) technologies combat. The third big important trend is of course the TD-SCDMA market which has performed very well I would say in 2009. As you know the Asian economies actually recovering from the economic crisis much faster than other countries. I heard recently that China has announced the fourth quarter growth rate of 10% annualized, but of course which we have (inaudible). Anyway that has been (inaudible) and has been very crucial year for (inaudible) that has been also the first year of development. And actually I must say that they have done again pretty good uptick. China Mobile has stated that as of December '09 the total number of TD-SCDMA subscribers was more than 5.5 million which is of course a big number both in the mobile and fixed lines, of course, that’s very good number. And the ST-Ericsson as I hope we are ahead of the curve, having sold more than 6.5 million chipsets during the year. And actually that number has been exceeded I think during the year because in the fourth quarter (inaudible) 3.5 million so more than the first three quarters combat. So a lot of interesting dynamics. Again, it’s too early to make sure that this is going to be the (inaudible) this year in 2009-10, but at least the first year was a much better than the lot of dovetails had anticipated. Okay. So I would like to mention a couple of interesting ST-Ericsson highlights in the Q4, mostly those that we have made public announcements on. So I hope that you heard that we announced that we achieved first (inaudible) HSPA mobility with a multimode device in conjunction with Ericsson’s infrastructure. That’s again tells a proof of where we are developing the technology in LTE. We have a lot of hopes to be a very strong player. Here, we have demonstrated LTE since 2008. We have had samples of our single mode solution end of the combination LTE plus HSPA, both since fall of last year, 2009. That supporting would frequency band expected to be used. And we expect to ramp up commercial devices in the second half of this year. Of course, we are also working under LTE evolution of the TD-SCDMA (inaudible) the so-called TDNT [ph] interface that of course we will integrate in our M710 platforms, the two LTE platforms that I have mentioned earlier as soon as they become available. Then in the smartphone segment we have announced a couple of interesting things too. We have announced our cooperation with them to extraditing the vision around mobile user expanse by integrating their – I think we have been the first smartphone platform to integrate the Mali-400 TM graphics possessing units of ARM and again a lot of doubt tells on that technology here, but the first reasons we have actually very, very promising. It seems that this graphics technology delivers much better than what even we had anticipated. You probably noticed that there is a small semiconductor supplier bridging BenchM [ph] processor, I think the name is Intel, which has announced MIG [ph] solution with the atom processor most time I guess is the flavor at LG just in case it was not clear for you I want to remind you that the modem in that MIG announced by LG is an ST-Ericsson HSPA modem solution. Again, announcement of our quarter to mobilizing the next billion people in TD-SCDMA, again the 6.5 million chips that which clearly positioned us as a leader, you probably held the last year when one competitor advancing much more in numbers than us and claiming that they were No. 1. I am not sure I understand the way they have been trading mathematics but at least now we can clarify the situation and confirm that we are by far the leader in TD-SCDMA shipments. By the way in TD-SCDMA that also allowed us to extend our longstanding cooperation with Nokia by making a public announcement of the Nokia TD-SCDMA phone, which, of course, was based on our platforms. Let's talk a little bit about financials. I’m sure that you would have some interest into that as well. You’ve read the numbers, revenues $740 million, up slightly 2% sequentially. We have good momentum in China basically, especially TD-SCDMA, but not only but that was partially offset by a slower demand, that was our key concern in Europe and before you ask me after (inaudible) customers in the quarter remain the same as in the previous quarter in alphabetical order. Of course, LG, Nokia, Samsung, Sharp and Sony Ericsson. Our operating results – we have had $50 million operating loss before $27 million loss of amortization of acquisition related intangibles and $62 million of restructuring charges. That compares with the $77 million of operating loss in the third quarter of 2009. The improvements compared, explaining the difference between 77 and 50 may need you to of course ongoing tight control of costs and expenses. Of course, the cost reductions realized through the restructuring plans, actually to the tune of $14 million in the quarter and also the positive impact of some grants in R&D funding which were $16 million higher in Q4 than in Q3. The last quarter is mostly one-off, don’t expect it to be a recurrent item, unfortunately, although I wish, but we will see. We also continued positive trend in inventory reduction with an improvement in terms of turns. Our inventory has reached turnover of $44 million at the end of the quarter which is a further sequential decline of about $33 million. We feel confident that, that level of inventory we can secure good demand level fulfillment for our customers. So we do not expect to bring down this number further except of course because of seasonal variations but not as a contrast effort. We believe we are at the right level now. Net cash in the quarter was $229 million, which is a sequential increase of $13 million. The reason for that is mainly the benefit from a one-time payment of $53 million from parent companies, but that was already planned since the inception of the company and it is related to final matter of our transaction adjustments. The net cash position has also been helped from higher level of customer collections at the end of fourth quarter and improved working capital during the quarter. I will update you on the restructuring plans. All of them so as you may remember, the first one was the $250 million pulled on to leverage the synergies at the ST and XP level before the merge with Ericsson mobile platform. That program I can confirm now is fully completed and all the benefits are in (inaudible) are realized. Then we have announced on April 29 of last year, the Phase II, which was a turnover of $30 million saving restructuring plan which is due to be completed by the second quarter of 2010. It is currently in progress. It is tracking to its plan and especially its effects in the fourth quarter of 2009 was in line with the plan with approximately 18% of the savings that have been realized during last quarter. As you also heard on December 3rd of last year we have announced a third phase of proposed plan to further improve financial performance and increase competitiveness. The plan is targeting additional annualized savings of $115 million that are expected to come from reductions in pricing expenses spending along with an extensive R&D efficiency program and as part of this effort the company is also conducting a review of our global workforce which may affect up to an addition of 600-odd employees worldwide. The targeted time of completion of this plan is the end of 2010. And by the way as a final note, we are estimating that the remaining charges associated with the ongoing restructuring plans will be in the range of $40 million to $60 million and all charges will be substantially incurred this year in 2010. Let me conclude by making a couple of market observations. While first of all on how the market evolves short-term. As you know we do not provide outlook feasibility, but of course you have been in this market like me. So you know that the first quarter of the year is always showing a seasonal of decline and we expect the first quarter of this year to be no different than that. Nothing is changing here. However, may be more important. Let’s just give a couple of observations about what we are going to try to accomplish this year to enhance our position in this market. And that basically on the three big segments that we are addressing. You know we are still present in entry and low cost that require a single chip integration focused on cost and power as well as complete solution with multimedia, some development with multimedia integrated. Here, we are progressing a lot. Actually I would like you to pay a little attention to a device that we are ramping today, which is the entry level Android platform, the name is 6715 and that’s basically the NE [ph] device we know in the market which enables to have an entry Android solution to the final terminal comes up highs indoor so less than Android are up Android solution, pretty unique in my mind. The second is as you know very well to be successful in smartphone you need high performance modems and high performance multimedia solutions. We are bringing these in a lot of shapes or form. I will give you a couple of reasons why we believe that our multimedia application processing capability has talked a lot and actually really very good in the industry. And by the way just as a complimenting note, I would like to mention that we have recently brought into company somebody who I personally had been working with for many, many years. He has been among other things key architects of the (inaudible) application processor family at Texas Instruments for many, many decades. And he recently joined us and I am very encouraged because that will help us continue to strengthen our application processing capabilities and to deliver them to a leading customers. And third segment is the emerging and very promising connected device segment adding connectivity to anything on phones. For example, external modules or USB dongles, typically a market for which we could see in modems basically just modems without multimedia capabilities and actually we have created a new division to address exactly that market to focus into these very promising applications that we will have very interesting new lines of HSPA plus and LTE modems to promote to this market segment. I believe that will help us basically completely change the positioning of our company and address the higher end of the market, namely, smartphone and connected devices with solutions that we believe will be very, very competitive. In summary, this is the market context in which we see ourselves continuing to play. We want to play bigger role moving forward, of course. By the way that was just a small snapshot. You will hear much more of this, I hope when you come and meet us in Barcelona on the morning of February 16. We will say more about our portfolio of strategy and how we want to transition to our next generation offering. And of course although we are strongly committed to improving our financial performance as soon as possible and deliver on the improved profitability we continue to invest in innovation and we will not sacrifice our future and you will see more, for example about our latest LTE developments, demonstrations as well as our commitment to a new and another very innovative modem architecture, which we believe will change the landscape of advanced modems. I hope to see as you many of you as possible in Barcelona. And having said that I just want to conclude my introduction by restating of some commitments for this coming year. The first one is as I mentioned several times this is a key theme of the company transitioning a portfolio to our next-generation solutions. Again, we have great HSPA plus LTE application processing, video/audio, CD and so on. Technology, we need to put it to work. We will put it and introduce a lot of new solutions based on that. The transition will be not immediate so we need to work hard to make that happen. But we know exactly where we need to be and we know exactly where we are going. Second, we need to firmly execute in our restructuring plan. We absolutely want to have a competitive cost structure from which to grow. That’s a lot of effort and a lot of pain but we know that there is no other way. So we will firmly engage on that task and finish the job and prepare the company for future and profitable growth. With that, I guess we are ready to take your questions. Thank you very much for your attention.

(Operator instructions.) First question is from Mr. Ghana Plagay [ph] of Nomura. Please go ahead, sir. Richard Windsor – Nomura: Hi, it’s Richard Windsor here with Ghana Plagay [ph]. I was wondering to ask about your transition to the next-generation solution. I was wondering which baseband modem you’re going to use. Is it going to be the Nokia solutions, is it going to be the Ericsson solution? And also you mentioned not immediate. When might you actually be in a situation to be basically just running with a single HSPA LTE solution? Thanks.

Hey Richard, how are you doing? Good to hear you. Richard Windsor – Nomura: Long time I didn’t hear from you.

That’s a great question. Actually as you know we are very rich of a lot of modem expertise probably more than we need and that’s what I was mentioning when I was talking about the inception of the company when talking about the merging of the different product family. Actually I am happy to report that the progress even (inaudible) already the progress made in converging to unique modem platform was already impressive. Actually I don’t know if you paid attention. I mentioned the fact that in Barcelona we’ll talk about our next-generation of modem technology, which I said was innovative and maybe will surprise you and change the landscape. And actually that’s the convergence point of our modem technologies. All our modem solutions starting next year will be based on that new modem architecture. So you need to (inaudible) in Barcelona to know that. But I can tell you that we have taken what I believe was the best of each of the Ericsson modem and NXP modem and put that together in modem architecture, where again all of our new products will be based on and that I really would like you to pay attention because we believe it’s a big deal for us and that will bring us a very flexible solution and very applicable to the future of challenges in this market. Richard Windsor – Nomura: Okay. One quick follow-up. You mentioned the combination of EMP and NXP. Does that mean that your solutions for Nokia (inaudible) Nokia is going to be moving of its own modem and on to your EMP and XP next-generation solution?

I so just to discuss that with Nokia. I agree I don’t want to talk for them. You know that we have license, right. We are allowed to use that modem solution if we want and again we have that capability if you want to use it and if Nokia wants us to use it. But, of course, I know that the ability to discuss Nokia choices. Richard Windsor – Nomura: Okay, thank you, Gilles.

The next question is from Mr. DDA Sharma [ph] of RBS. Please go ahead, sir. DDA Sharma – RBS: Good morning, gentlemen. Thanks for taking my question. Other couple of questions if I may. To start with on the U8500, Gilles, you mentioned that you are making good progress with that shape and just wants to get an update on where we are in terms of number of customers you got in the bag into top five and perhaps outside of the top five? And also if you could give us a sense of when you think you are going to start shipping that product. I’ve got a follow-up. Thanks.

Yes. Hi, DDA, how are you? DDA Sharma – RBS: Good. Thanks.

Good afternoon, DD. (inaudible) is progressing, of course, I can only tell you what’s public, so we have announced that we have the first and then the second design win. I think we have not disclosed with the second, but it’s at a five of course. And that’s what we have announced so far. But I show you as soon as we announce new design win. I will make sure that we make a lot of noise about it. But we have not announced anything yet at this moment, although of course we are talking to a lot of people. What was the second… DDA Sharma – RBS: Ramp….

In terms of readiness we are basically executing that program on plan. I hope you know Marc is there, the division manager for modem and 3G multimedia solutions. So Marc Quiker [ph] there.

Yes, good afternoon, DD. We have actually two programs on 8500. One is on Symbian foundation and the other one is on Linux (inaudible). And both programs are set to believe on their smartphones in the market in the first half of 2011 embossed on type.

So FY2010 is a key transition year basically when we step to think this new solution we will look much better, but we need to get there and that’s our target and our focus this year. DDA Sharma – RBS: Great. Single chip edge, I think the product was announced by an XP (inaudible). What is your ST NXP? I’m just wondering if you are going to start shipping the product yet.

Okay, here is now that product belongs to the Amada [ph] of Cherry Tango [ph] who is running 2G and Edge and TD-SCDMA division. And he is getting a mic front to answer your question, GG.

Actually, the (inaudible) GG, we are going to start the shipping is 49 this year and we are trying to develop the chips and expect to go very quickly on the market with a device with several customers. DDA Sharma – RBS: Great. Thank you.

The next question is from Mr. Gareth Jenkins of UBS. Please go ahead, sir. Gareth Jenkins – UBS: Just on the TD-SCDMA market development you said 6.5 million with accelerating run rate. I just wonder whether you could give us a sense of what you are expecting in 2010 in terms of volumes and what the timing on TD LTE is.

I guess that’s, that’s (inaudible) again if you are kind enough to, but before I answer I know that the future is something that we not talk about a lot, because we cannot, so. Timothy Lucie-Smith: Yes, it’s what we can say is that there is a OCCR [ph], this is a pretty clear now and so far we have seen good growth during the second half of last year and therefore we are expecting to have a significant growth this year. But so far to make it clear information about the visibility of TD-SCDMA market is something that is difficult to predict right now. Gareth Jenkins – UBS: What about the LTE?

Jorgen Lantto, Executive VP will answer that question

So as Gilles mentioned in his introduction we are prepared for TD LTE in our first generation of LTE products. The commercial availability of this will be tuned to the market low on show of that technology.

Yes, I guess what to really understood is that he is trying to tell you is that when the market starts we will start with it and we are not exactly sure when China Mobile will decide to study. I think it’s fair to say that there will be demonstrations and events where they will display to LTE solutions and that’s we will be part of this. We are going to them after TD LTE this year but for them commercial onshore we will have to monitor that. Gareth Jenkins – UBS: Okay. Nice. Could you just follow up on the revenue growth? You touched on fact that China had been strong, Europe had been slightly weaker. Could you just let me know what’s going on in Europe, is that market share loss pricing pressure or just the general volumes in the market are not looking too good?

Well, again it has been (inaudible) we have – well how can I say that well I guess the best way to answer that is the combination of multiple factors. You know some, some European players are doing better than others and you know our fate is also linked with the genial fate of play as in this marketplace. I guess that’s, Jorgen, do you have something to add or….

No, I don’t want to say anything. Gareth Jenkins – UBS: Thanks.

The next question is from Mr. Jerome Ramel of Exane BNP Paribas. Please go ahead, sir. Jerome Ramel – Exane BNP Paribas: Yes, good afternoon. I just was wondering if you could tell us if you reiterate the target of being breakeven (inaudible) the lot of sales and having achieve all the (inaudible) or if anything has changed from that operations?

No, I don’t think that we want to give you a precise outlook. What we want to do now is again work and work and now Kirsten [ph] want to say then work enough to plan on the other side and make it sure that we get to that profitability timeframe as soon as possible. And again there are so many valuables that I’m not sure giving you the timeframe. I would have to give you so many qualifiers like last time (inaudible) and if we do that and that and this and this and that, so it doesn’t really make sense. So I mean but again you know better and I mean you look at our plans of restructuring, for example, and we have time them to as you can guess to get to breakeven there as soon as possible. So again in 2010 as opposed to working in a magic milestone we will work on executing in our style of restructuring to reduce or breakeven burnt and impose a competitiveness of our cost structure and also trying to transition to the new product line that will help us grow again faster. I guess that’s the best we can say right now. Jerome Ramel – Exane BNP Paribas: Okay. And just a quick follow-up, can you give us a rough idea what is the breakdown of your sales between smartphone, feature phone and entry level phone?

Well I guess I can see a lot of faces telling me that we don’t disclose this kind of breakdown. It seems empty learning, but sorry. Jerome Ramel – Exane BNP Paribas: Okay, thank you.

The next question is from Mr. Jonathan Crossfield of Merrill Lynch, please go ahead sir. Jonathan Crossfield – Merrill Lynch: Yeah, hi, good afternoon. A couple of questions, first one was given ST’s strong multimedia background and based on the very strong performance that you are describing for the year IC500 why do you think the business hasn’t had that much success in the applications process market historically and what really changed to make that different going forward?

I am sorry, can you repeat the last question, why do you think what, excuse me can you repeat that sentence? Jonathan Crossfield – Merrill Lynch: Why do you think ST didn’t enjoy that much success in the apps process as historically and what gives you confidence that the new developments around the codecs will now change that I guess?

I guess that’s a fair question, and I will try to answer that. You know in application process there is really a systems, system platform which is really a best sold by system companies and I guess ST has had great multimedia capabilities for Europe especially as applied to the consumer segment, but maybe it was more difficult in the general board ST environment to focus and to give enough priority and focus to assist in solution. I believe and I hope I am right. We will see I hope, we will see if I am not wrong. But I believe that in the frame of a company which is doing only that only system solutions for the wireless segment and which is the clear priority for the company, these solutions are clearly that have to of our product portfolio and we are maniacally focused in making them successful and again we are reinforcing if anything as I mentioned we are reinforcing that capability with having the key individuals in the industry that will even increase our capabilities here. So how to talk about the past? I tried to give it a shot but I can assure you talking about the future I think nobody takes to sell complex modems for smartphone solutions. We have really rich application processing capabilities and bringing, I think the capabilities of the company, all of the immense and I have been surprised to see how competitive well is our video solutions, audio solutions and imaging and so on. I can grant you that we will be very focused on that and we are really badly want to make it happen. Jonathan Crossfield – Merrill Lynch: Okay, and maybe, just a quick follow-up would be you talked about $40 to $60 million of further restructuring costs. Could you just give us an idea of how much cash restructuring is left to go and whether there has been any change in your approach on for the financing going forward given the level of cash in the business?

Sure. Timothy Lucie-Smith, our CFO will gladly take that question. Timothy Lucie-Smith: Okay, we are booking the costs of the restructuring before we pay out and this can happen quarter before two quarters before even three quarters before due to the timing of the restructuring program. So what you see in 2010 is that while we have additional costs to book between $40 and $60 million as we said we will see more than that in terms of cash outflow because as we complete the plan we will have to pay out what we have accumulated and booked as provisions and particularly we booked a substantial amount in Q4 relating to both the Phase 2 and the Phase 3 plan so you will see substantially more and basically a lot of that costs that we have taken in Q4 will be additional cash outflow during 2010. Jonathan Crossfield – Merrill Lynch: That’s great, thank you very much.

Thank you.

The next question is from Mr. Matthew Hoffman of Cowen & Company. Please go ahead, sir Matthew Hoffman – Cowen & Company: Hey, Gilles. Couple of questions. First on the relationship with Intel. Can you or Jorgen discuss how broad you see that cooperation becoming kind of a expanse in the first HSPA more sound cooperation into something wider perhaps extending into LTE? And also are they a target for the thin modem group you dealt out? And then I might have missed it could you also give us CapEx in the quarter? Thank you.

Yes, let me I’ll just (inaudible) to add something. Maybe it was not clear but actually the MIGs, LG MIG (inaudible) said to use most down in our modem and I am not going to comment in detail on what has happened to make that solution happen. Of course we are developing thin modem solutions so we will be glad to be in as many made it as possible and by the way we also happened to be in solutions with other application processors that happens at the reality of the marketplace. For example, I don’t know if I can mention. No, let’s say just other application processors, not only Intel if is that can answer your question. Matthew Hoffman – Cowen & Company: That’s good. Thank you. And could you give the CapEx?

Smith will take it. Timothy Lucie-Smith: CapEx in 2009 overall the full year was around $80 million and Q4 was no different from a normal level. Matthew Hoffman – Cowen & Company: I am sorry you said $80 million? Timothy Lucie-Smith: $80 million annually in 2009. It will be spread normally over the quarters. Matthew Hoffman – Cowen & Company: Is that level sustainable through 2010? Timothy Lucie-Smith: I mean we are not commenting in detail that, but I mean we are a fabulous company and so we don’t see you know massive changes in the requirements of CapEx going forward. Obviously there can be fluctuations up and down.

Yeah, yeah, we believe that’s the right level given I mean we don’t see a problem with that level. Matthew Hoffman – Cowen & Company: Thank you very much.

Thank you.

The next question is from Mr. Andrew Gardner of Barclays Capital. Please go ahead. Andrew Gardner – Barclays Capital: Hi, good afternoon, thank you. I had some more questions around your operating profitability. You highlighted in your comments most of the improvements or sort of narrowing of losses in the Q4 came through OpEx reduction as well as the one of grants. I just wondering if you can help us a bit more with phasing of further reductions in OpEx through this year 2010 as the restructuring comes through and also now that the business has stabilized and you’re starting to see revenue growth as well as stable inventory levels when can we expect to hear about gross margin progression and perhaps in addition to that do you have intentions to give us a bit more detail in terms of the break out on the cost front as well this year? Thank you.

Tim. Timothy Lucie-Smith: Yes, I think the first point is the restructuring savings, cost reductions coming from our restructuring program. So we have said that the Phase 1 program has been completed. The phase 2 program basically we have realized savings up until the end of the Q4 around 25% of the total savings so that means we have 75% left to go and on top of that we also have the Phase 3 which is $115 million of annual savings and that has fully to be realized. So the 75% of the Phase 2 and 100% of the Phase 3 should be realized during the course of the coming quarters and we should realize them as we can progress and as we will progress with the headcount reductions and other parts of the cost savings program over the next four quarters. That I think is on the restructuring program. We had a question on gross margin progression. I mean maybe we can just simply say that between Q3 and Q4 we see pretty stable gross margins in percentage terms on sales. We are not giving any guidance on how we expect our gross margins to develop to bring 2010, but obviously we are taking all of our actions that we can to manage that in the best possible way. Andrew Gardner – Barclays Capital: That was a follow-up question on the, if we are going to provide a breakdown of costs? Timothy Lucie-Smith: Yes, we are continuously evaluating what kind of financial information to provide. So far we have not taken any decisions regarding additional details on our profit and loss account. As soon as we make those decisions we will inform people. So as yet we have not made a decision to provide a further detailed information. Andrew Gardner – Barclays Capital: Okay, thank you very much.

The next question is from Mr. Janardan Menon of Liberium Capital. Please go ahead sir. Janardan Menon – Liberium Capital: Yes, hi, just one follow up on the cost reduction on the profitability side if I may. Without giving any specifics on currency and revenue and all that based on the design wins that you have and the time scale with which they will ramp and your cost reduction program this year can we assume that you can be profitable in 2011, is that part of your internal planning that you should be profitable in 2011? And a follow up I have is lot of your competitors with both applications processor and modem technology like Qualcomm or NVIDIA free scale are going for the net book market, the smart book market very aggressively. We haven’t heard much from you in terms of either going after those PC vendors or in terms of getting any design win. So is that strategically an important market and if not why not given that you have the kind of products within your portfolio to make that happen? And a last question if I might slip it in is you said you will have LTE shipments, commercial shipments in the second half of this year. Do you have any design wins outside of your sister company or would that be the primary ramp customer for the LTE design for the LTE shipment?

Okay, let’s try to take them in order, in the timing of profitability, again, I am sorry but I have told you that we prefer to not give a schedule but the actions that we are undertaking to get there and I can only tell you as soon as possible is our goal and we will not comment on any precise timeframe although I hope it’s really soon but that’s another question. The second one was, yes, connected devices, yes, actually, it is clearly a big priority for us. Last quarter, we have announced comparisons and design wins (inaudible) well as so we are clearly addressing this market. Jorgen, do you want to add something? We especially with our thin modems solutions for example, Jorgen will add maybe a couple of a little color to that

Yes, I mean, this market we are addressing mainly through our external OSP module-based business where we have announced a number of all customers in the net books and under notebook market, so we are very much present there in that market. We have also announced other customers like Sony recently and we are also present there so we think there is a lot of growth in this area. Janardan Menon – Liberium Capital: Will that be a market also for the nomadic in terms of apps processor market, so if you go through Ericsson are you not sort of a letting that opportunity go?

We have not announced, nomadic is a old product name where we have announced is an (inaudible) platform which combines both modem and application processor. There was another question and that…

LTE, we are, I said before I mean we are sampling or we have samples since already four last year, our first release of our commercial LTE offering and so far we have not announced any customers. So we can’t do that at this point we don’t disclose the customers but we expect a ramp in the second half of this year. Janardan Menon – Liberium Capital: Okay, thank you very much.

The next question is from Mr. Odon De Laporte of Cheuvreux. Please go ahead sir. Odon De Laporte – Cheuvreux: Yes, good afternoon, gentlemen. Your parent company Ericsson on (inaudible) say that earlier this week that they will be able to increase the speed of HSPA from 21 to 84 Megs, so I was wondering if this kind of speed will be supported by next generation of tube sets, if you already have plans to introduce such tubes, thank you?

Yes, so this announcement relates to the HSPA plus technology that is being standardized side by side with LTE and we are supporting this today the first generation as Gilles mentioned earlier supports 21 megabit per second that’s fully commercially available. We have a lot of good traction in the market with this solution and then we will upgrade this to reach additional higher data rates along with this kind of development. Odon De Laporte – Cheuvreux: But sorry, I am little bit confused, 8500, does it support 21 or 84 megs?

No, it was 14, that’s different, it’s a multimedia and modem integrated single chip solution what Jorgen is talking about here is what I called a thin modems, for example, M570 platform which is the 21 megabits. You want to continue Jorgen? And the evolution thereafter.

Can we have a road map to address. It’s two standards as they emerge. Odon De Laporte – Cheuvreux: Okay, thank you.

And actually I can maybe quickly comment that now that we have clear cut edge on thin modems we will probably see the latest interface solutions and the higher speed modems introduced as a thin modem and then merged to integrated multimedia and I mean application and modem solution. Odon De Laporte – Cheuvreux: Okay, thank you very much.

The next question is from Mr. Martino De Ambroggi of Equita SIM. Please go ahead sir. Martino De Ambroggi – Equita SIM: Yes, good afternoon and thank you for taking my question. I was wondering if you could elaborate a bit more on the pricing environment first and before that is on the Q4 guidance for the typical seasonality under your new perimeter inviting thinking it could be minus 6, minus 8 percent as a broad range for the (inaudible) of the new entity? Thank you.

I will just very quickly comment on pricing environment. We basically see pretty stable. I mean we have nothing to (inaudible) the pricing front, we do not see a stronger pressure, and of course there is always very strong pressure in this market, but we do not see stronger than usual and unfortunately we do not see less stronger unusual either, but nobody has well entire to increase the prices yet, but so nothing to report in that front. On the other one, on the seasonality what you are talking, Q4 scenario compared with Q3 or Q1 compared with Q4 or? I am sorry…. Martino De Ambroggi – Equita SIM: Well I guess current to the sequential growth Q1 versus last quarter last year?

Yes, first compared to fourth. As we mentioned in the market in our perimeter, I don’t know if it’s the new or the old but in our perimeter certainly there is a seasonal drop in Q1 has always happened, will probably always happen and certainly we believe that this year will be no different, so I guess that’s what we can say about that. Martino De Ambroggi – Equita SIM: Okay, thank you.

The next question is from Mr. Brett Simpson of Arete Research. Please go ahead. Brett Simpson – Arete Research: Yeah, thanks very much, good afternoon. I had a couple of product questions maybe first off for Jorgen, on the USB dongle and modules business. I mean this is an area which has been booming for a few years and is really only dominated by one player, Qualcomm on the chip side. Can you maybe just talk about is there any specifics that’s really held you back in this space you have been found to develop solutions here for a while now? Is it more because the data card guys was using well (inaudible) in DTE or competing with Ericsson and that’s a stumbling block or assuming specific, is 2010 going to see a change where this part of the market going to be meaningful volumes for ST Ericsson?

Maybe if you allow me, Jorgen, before you give the precise answer I will give you the first level, which is yes, it is true that before I wrote them clearly we have tried to penetrate that markets for long time but maybe not with the right tools because we did not really have thin modems before I mean we tried to put modems which were not really the best partitioning the best architecture into this application and that didn’t prove very successful, and again that we have not pulled it in yet, we hope that the proof will come this year that will be much more successful with the new familiar products like the M570, for example, or the 340 which are really thin modem platforms, so possibly more that to USB dongles. Jorgen, you want to add or you doesn’t want to add?

Oh, I think I mean ST, there are a number of factors why we have not penetrated that market so much previously but I think we are well equipped to go for that market now. There is a log of all going efforts to make this successful. Well I mean so that’s very important activity going on. Brett Simpson – Arete Research: And maybe just a follow-up question with the U8500, followed with a discussion about this platform coming on streaming, early 2011 I mean weighing up the switching cost involved and the time to market the business for an OEM to take your solution, you know, how much (inaudible) is there really to get an OEM to move away from (inaudible) platform or something equivalent and retool and re-port to U8500?

Marc will do, take the microphone and therefore he will tell you much.

Yes, good afternoon, probably, three things here. First of all we will I mean U8500 will have some I mean we will propose some discontinuity that will be interesting for people to make the switch and there will be some things that our competition doesn’t have and again as we progress along we will disclose more of those to you maybe even in Barcelona if we meet maybe under (inaudible). The second thing I would answer is that ongoing changes again there because again we can much easy, much more easy than the past change all the platform and under an ongoing multimedia framework now because of cross rewrite to the same Unix (inaudible) and the other additional obviously seen. So that certainly changes the game very significantly compared to a situation two years ago. And then myself point with that people want choice and there is not a lot of choices so they end at that level of performance both from the modem side and from the application side. Brett Simpson – Arete Research: Can I just make a quick follow-up question on the cost side? Can you maybe just give us an update as to where you are with headcounts end of 2009?

Yes, actually, I’ve been told that we can answer this question which makes me very happy. So, basically we are in the Q4 we have gone below 8,000 so we are around 1700-odd people total, but that includes not only our employees, but also all the competitors that we employ onsite. We do not include however outsourced labor when we use for example a self attitude sub contract them work but we do not include them but we include all of our employees and all of our subcontractors onsite. Brett Simpson – Arete Research: Thanks very much.

Thank you.

Now we go for the last question.

The final question is from Mr. Nicholas Von Stackelberg of Sal Oppenheim. Please go ahead, sir. Nicholas Von Stackelberg – Sal Oppenheim: Could you reconcile for us please how you went from a net financial position of 216 at the end of Q3 to 229 at the end of the current quarter given that you had clearly negative operating income even addressing for the restructuring charges assuming that for now most of those have been non-cash, yes, how that came about, some of them….

Certainly. Tim will answer that question immediately. Timothy Lucie-Smith: Yes, so we’ve improved cash position from 216 to 229 we see this prosperity. First of all we have to mention the $53 million that we received from our parents as an equity contribution as a one-time equity contribution relating to the initial merger agreement between the parents and adjustments relating to that merger agreement. So if we take that out we are at a cash negative cash flow of $40 million in the quarter. Now if you look at that $40 million we have roughly $16 million of restructuring payments and then we have the effect obviously of the losses in the quarter but we also have a positive effect coming from both reduction of inventory that we mentioned and also a reduction in our receivables position and we’ve become more efficient in our use of working capital during the quarter and that’s quite a significant effect in the quarter. Nicholas Von Stackelberg – Sal Oppenheim: And do you think that this new level of net working capital is sustainable or if I will add that in Q1 you have a seasonal downtick should we assume that you will free up some more cash from net working capital sequentially? Timothy Lucie-Smith: I think obviously we plan to sustain the level of working capital we have reached in terms of turns. That is our target, that is our objective to try and sustain that. I don’t believe that we could reasonably target much further improvement and some of these improvements obviously come from the fact that we have been coming from a very negative situation at the beginning of 2009 where we had excess inventory and that is a…. Nicholas Von Stackelberg – Sal Oppenheim: What are your inventory turns? Timothy Lucie-Smith: We don’t disclose the actual number of inventory turns in the quarter, but you can see that I think we are at a level which is comparable with our competitors and if we look at it with comparable or better than most of our competitors. We had basically flat sales a 12% reduction in inventory in the quarter so that has reached, we have reached a level where we should think we are comparable with our competitors and we target we plan to sustain that level going forward. Nicholas Von Stackelberg – Sal Oppenheim: What is the kind of the networking capital sales ratio that you feel at ease maybe you could share with us a range that you’re going after?

Well, the ease with I mean I think the current level of working capital is satisfactory result and we plan to try and maintain that going forward. Nicholas Von Stackelberg – Sal Oppenheim: Thank you.

Okay. So I am being told that this ends the question and answer session. By the way again we are hoping and expecting and looking forward to meeting you in Barcelona at the analyst and press event. In the meantime let me just conclude we have addressed (inaudible) competition of the (inaudible) coming from us but consistently joining these meeting today. We know that we are facing a great challenge. We know that the markets will be extremely difficult. It’s a very challenging environment. However, we know that we have all the technology, all the capabilities and the human and technical capital necessary to make a difference in this market, so (inaudible) this year is to unleash these capabilities, possibilities and realize our potential. And by the way to do that we first need to get to a competitive cost structure, so we will work enough of course with the restructuring program. And at the same time we will work and getting ready for our profitable growth. The readiness and the ramp of our newest programs that we will bring us into new areas where we were not able to operate before. Again, in particular in terms of (inaudible) media application processing solutions with advanced modems or even seen modems for our new kinds of end equipment. These are new markets for us. That’s our challenge. We are getting ready to penetrate those and that’s our key priority for this year. And with that I want to thank you very much for your attention. And wish you a very happy new year again. And see you soon in Barcelona or somewhere else next time. Thank you.

Ladies and gentlemen the conference is now concluded and you may disconnect your telephones. Thank you for joining and have a pleasant day. Bye.