Christopher Finelli, J.P. Morgan Gary Mobley, A.G. Edwards Bill Dezellem, Tieton Capitol Management Robert Toomey, EK Riley Advisers Maynard Tyler, Merriman Sonya Kometsigy, Morgan Stanley Alex Woodward, Madonna Capital

Good afternoon and welcome to today's conference call. Copies of the Lattice Semiconductor 2005 earnings press release may be obtained from the company's website, which is www.lscc.com. This call is being recorded and broadcast live over the internet by CCBN. A live broadcast and replay of the call will be available on the Lattice Investor Relation site: www.lscc.com At this time, I'd like the turn the call over to Chief Financial Officer, Jan Johannessen. Please, go ahead. Jan Johannessen, Chief Financial Officer: Thank you. I'm good afternoon, everyone. Joining me on the call today is Steve Skaggs, our President and CEO. Before we begin, I'd like to read the Safe Harbor statement and then give a financial review of the fourth quarter. And then Steve will provide a business review followed by our first quarter outlook. We will then hold a question and answer session. I will now read the Safe Harbor statements. This conference call may contain forward-looking statements within the meaning of the Federal Security's laws, including statements about the expected impact and timing of the restructuring of our business and financial results, future quarterly financial results, revenues, gross margins, customers, product offerings and the Company's ability to compete. Estimates of future revenue are inherently uncertain due to the higher percentage of quarterly terms business. Investors are cautioned that actual events and results could differ materially from the statements as a result of a number of factors, including the ability of the Company to successfully complete its restructuring without destruction of its business, the ability of the Company to realize the anticipated benefits from the restructuring and the timing of those benefits, the impact of the special litigation committee's investigation and the SEC informal inquiry and any resulting action, development in our pending security's class action litigation, overall semi-conductor market conditions, market acceptance and demand for the Company's new products, the Company's dependencies on its silicon wafer suppliers, the impact of competitive products and pricing, technological and product development risks, and the other risks described from time to time in the filings with the SEC. The Company does not intend to update or revise any forward-looking statements whether it's the results or circumstances after the date here of or to reflect the occurrence of unanticipated events. Now the financial review. Revenue for the fourth was $64 million, up 1% sequentially from the third quarter. Gross margin for the quarter was 49.1%. During the quarter, we took $2.2 million in one-time charges related primarily to the creation of our research and support in selections of certain mature products under a last time buy program. Excluding these one-time charges the gross margin would have been 53.2%. We'll discuss the gross margin later in this call. Quarterly, R&D expense was 23.7 million, up $1 million from the prior quarter. The increase in R&D expense was primarily a result of higher mass costs for the fourth quarter. Quarterly SG&A expense was $13.2 million, down $300,000 from the third quarter. The expense related to the previously announced corporate restructuring, which was implemented in the fourth quarter, was $11.9 million, higher then the previously announced range of 8 to $10 million. The difference that is part of restructuring we took an additional $2.7 million non-cash charge to write-off a previously acquired IP license. The write-off was necessitated due to a change in our product development plans resulting from the restructuring. The remaining $9.2 million restructuring charges primarily relate to separation packages and costs to vacate space under long term lease agreements. Other income for the fourth quarter was $2.8 million, and included a $400,000 gain related to the sale of marketable securities. We’ve reduced our tax for foreign taxes during the third quarter by $204,000 due to benefits realized in connection with last quarter's restructuring. Intangible asset amortization was $3.7 million for the quarter, down $300,000 from the third quarter. The intangible asset amortization for the first quarter will be about $2.9 million and a total for 2006, about $10.8 million. This compares to a total of $16.2 million in amortization for 2005 and $47.2 million for 2004. The amortization of intangible assets will be substantially eliminated in 2008. The December quarter net was $23 million or $0.20 per share compared to net loss of 7.1 million $0.06 per share for the prior quarter. These losses include charges of $3.7 million and $4 million for amortization of intangible assets. The fourth quarter net loss also includes restructuring charges of $11.9 million as discussed earlier. On a non-GAAP basis, which excludes the aforementioned intangible amortization and restructuring charges, we had a net loss of $7.3 million or $0.06 per share compared to a loss of $3.1 million or $0.03 per share posted in if third quarter on a comparable basis. Turning to the balance sheet, the cash and short term investments at December, 2005 were $264.2 million, slightly up from September, 2005. Despite our GAAP losses we continue to generate cash from operations, approximately $3.4 million operating cash flow for the fourth quarter. Accounts receivable decreased from $26.4 million to $23.6 million at December 31st and day sales outstanding remain he healthy at 40 days, down from the prior quarter. We spent $3.3 million on capital expenditures during the fourth quarter and depreciation expense was $3 million. Inventory declined $3.7 million to 28.6 million, and now stands at about 3.2 months on a cost of sales basis, which is the lowest it's been in many years. The Company made a decision in the past not to take an inventory write-off and instead gradually sold off its excess inventory. As I mentioned earlier, the Company has now initiated a last-time buy program to obsolete certain mature products. After further review we identified parts that require an approximate $2 million inventory serve for inventory to a level consistent with our expectations about what is required to support last-time buys. Collectively, these products represented less then 2% or for the 2005 revenue. We believe the impact to have last-time buy program on our future revenue will be immaterial. Beginning in 2006, we are, as you know, required to adopt the FAS123-R accounting for stock based compensation. These charges will include in our operations as a non-cash expense and allocated to R&D and SG&A as appropriate. Stock based compensation charges adds volatility of actual versus expected expenses due to volatility in our stock price which we cannot predict. We estimate that Q1, 2006, the fixed stock based compensation expense to be approximately $1 million. To conclude my remarks, I'd like to re-emphasize that during the fourth quarter we initiated and completed a number of very significant financial and operational measures that should benefit the company as we enter 2006. This concludes the financial review portion of the call. I would like now to turn the call over to Steve Skaggs. Steve Skaggs, Chief Executive Officer: Thanks, and good afternoon, everyone. Last quarter we posted sequential revenue growth for the fourth consecutive quarter as we experienced growth from our new products and also, from the consumer end market. Geographically, during the quarter, the Americas made up 28% of revenue, Europe, 23%, and Asia, 49%. North America declined to 8% sequentially. Europe was essentially flat while Asia grew at 8% sequentially. Growth in Asia was led by Japan, although we experienced positive business conditions across the entire region from both transfer business and consumption to support local design. Revenue by end market for the quarter was as follows. Communication, 49%. Computing 18%. And all other markets, 33%. We had a strong quarter in the other markets primarily as I said, due to a surge in consumer business which came from Asia. Although I will get to later, this had a negative impact on the gross margin percentage. The communication end market was down slightly, well while on the other hand the computing end market posted slight sequential growth. During the fourth quarter FPGA product revenue was $9.9 million or 18% of total revenue and declined to 3% sequentially. This decline was entirely due to our older ORCA products, these products declined at double digit sequential rate and now account for only approximately $2 million of quarterly revenue. PLD product revenue accounted for 44.1 million or 82% of revenue and grew 2% sequentially. This growth was primarily grown by the MACH 4000 CPLD products introduced into the 2002-2003 time frame. We posted another strong quarter of revenue from our new products as historic customer designs to into volume production. During the fourth quarter new products grew 5% sequentially and 66% on a year-over-year basis, and now make up 38% of total revenue. As several of these new product families are now well into the volume production phase of end customers and we have recently released a full portfolio of next-generation products, we plan to reclassify our products by life cycle category for the first quarter of 2006 earnings release. I believe this will also serve to provide you with better information regarding the revenue growth of our next-generation product. Revenue from mainstream products declined 4% sequentially and now accounts for 28% of total revenue. This decline was primarily driven by our ORCA-3 FPGA products. And finally mature products glue 3% sequentially and make up 34% of revenue. As Jan noted, our gross margin after adjusting for a certain one time reserve was approximately 52.3%, a decline from 56.2% we reported last quarter. This unforecasted change in gross margin was a result of several set and unpredictable events that occurred last quarter. The difference in margin equates to approximately $1.6 million in cost of goods and attributable to three factors, each of which accounts for approximately similar magnitudes. The first factor was a mixed change in our business. During the fourth quarter as I mentioned we had a large increase in consumer related business from Asian customers due to the rapid production ramp up on two high-volume designs. This business carried gross margins substantially lower then the corporate average. At the same time we experienced the decline in die sale business due to the customer cancellation. Die sale business carried a gross margin substantially higher then our corporate average, and the net affect, obviously, suppressed gross margin. The second factor relates to assembly prices. During the fourth quarter we received an immediate and unilateral broad-based price increase from the largest assembly subcontractor. Additionally, due to an industry-wide assembly and substrate capacity shortage and associated delivery issues, we spent more then normal on freight expedited other charges in order to meet the quarter-end customer shipment commitment. In fact, we left more shipments on the table than is normal at the end of the quarter. Lastly, we experienced a short term yield problem with one of our high-volume assemblies at our foundry. More importantly, looking forward, we expect the gross margin percentage to transact to its recent historic range. The yield problem has already been corrected and we're once again running production wafers for the affected product family. Secondly, we now qualified an alternative assembly provider for our cost sensitive packages and are shifting our build schedules accordingly. We'll also plan to build more finished goods to alleviate short term supply constraints in the back end. Lastly, during the first quarter, we'll benefit from wafer price reductions. I'd like now to turn to an update on our product development and customer design activity for our next-generation products. Last quarter we continued our recent track record of strong execution of new product releases. Before year end we had completed the full volume production release of our two non-volatile 130 nanometer product families, the Lattice XP and MACH XO. With these two complementary families, we have a comprehensive nonvolatile product portfolio, offering customers a cost effective and differentiated solution up to the mid-range of FPGA density. We're the only programmable logic supplier with 130 nanometer non-volatile devices in volume production. The distinct competitive advantage afforded by our foundry relationship with Fujitsu and cumulative design and manufacturing experience with non-volatile technology and products. These two families, paired with our previously released S-RAM based, ECP products, gives us a full 130 nanometer product offering. I believe our overall execution of the 130 nanometer process node, initial samplings of full production of full release of three product families with 21 total device devices in less then 18 months has been the best in the history of the Company at a given process technology note. We look forward to an even more rapid release of the new nanometer products and will detail the product plans in the important product area in the near future. In this forum, we've been providing the quantification of our customer design activity in order to provide the investment community with an early indicator of the potential market reception of our important next-generation products. When I say "next generation" I'm referring to the Lattice ECP, Lattice XP FPGA and also the MACH XO crossover programmable logic family. We feel this data can be useful as customer design tends to lead the volume production orders to support that design end by up to 18 months. Let me you an update on last quarter's customer design end results for our next generation products. During the fourth quarter we secured under 1,000 design ends at approximately 500 distinct customers. Now in aggregate, since the end of 2004, we have secured over 2,000 design ends at over 800 distinct customers for these products. Quarterly revenue from the new product families is still relatively small as a substantial majority of the design ends I referred to are still in the prototyping phase, however at this point, the first handful of design have moved to the production phase and we're beginning to see revenue. During the fourth quarter, the total revenue from the three families was just under $1 million. Additionally, during the last quarter, the ECP family, the first family to be introduced a bit over a year ago surpassed $1 million in cumulative revenue. Looking forward, our expectation is that the revenue from these three product families will double in the first quarter. Lastly, as Jan noted we booked $11.9 million charge due to the previously announced restructuring. I'm pleased to report that from an operational standpoint, this action is behind us. We've eliminated 14% to have workforce, closed four remote R&D centers, and consolidated and streamlined our R&D activities. This unpleasant but necessary action was implemented quickly and effectively. At present, the remaining engineering staff has been reallocated and is fully and productively engaged on our new product development road map. I don't plan to detail the road map in this forum, however, as I alluded to earlier, you can look forward to a major product announcement in the very near future. Turning now to the 2006 first quarter outlook. The first quarter is going on the seasonally strong quarter for programmable logic and we anticipate continued growth from our new product and as I mentioned and a meaningful revenue contribution from the next generation products. Consequently the current estimate is for total sequential quarterly revenue growth in a range of 2 to 5%. For the rest of the P&L we currently have the following expectations for the March of 2006 quarter. We expect gross margin as a percentage of revenue to be approximately 54 to 56%. Total operating expenses, including, as a $1 million non-cash charge for stock compensation expense that Jan discussed, are expected to be approximately $34 to $35 million. We expect intangible assets and amortization to be approximately $2.9 million. We expect the products between $2.4 million in other income. And finally, we expect the share count to be relatively flat. With that, I would like now, to open the call for questions and answers. Operator, you can go ahead. Questions & Answers:

Q - Christopher Finelli: Thanks, guys. Can you just go through why the margins are, I guess, at 1% below where they used to be where you expect them to transact that 56% level and then, also, go through your expectations for operating expense for the rest of the year or some kind of target? A - Steve Skaggs: Sure. I think I discussed in some detail why margin was different from where it was last quarter. It's obviously a very difficult to predict with the mixed situations and we didn't do a good job of forecasting that last quarter. Therein lies the large range. As we mentioned in the past we priced our new product for penetration but we expect with yield and wafer price projections to earn corporate margin targets which remain at 55 to 60% on those products. Our margin has the potential to increase with scale or revenue growth. And we expect to operate divisions on the targets that we gave. Your second question, I didn't get, Chris. Q - Christopher Finelli: For the rest of the year how do you expect it to trend? A - Steve Skaggs: We expect our R&D to be, you know, again, relatively flat at the new level. Plus or minus 500K or so depending on product development activity, mainly mass. And SG&A should trend up slightly with revenue growth, but there should be operating leverage there. And, you know, the stock option compensation expense, we've done our best job in providing that estimate for the first quarter and Jan mentioned there could be volatility around that depending on stock prices. So that's basically our current outlook for operating expenses through the year. Q - Christopher Finelli: That's great. My last question, can you give us what the book to bill was during the quarter and is backlog up or down versus last quarter? A - Steve Skaggs: Sure. Book to bill was slightly below one. Backlog was slightly down. And that's not a surprise given, you know, the nature of the typical seasonal pattern for the fourth quarter and as I mentioned, we did net some ship commits at the end of the quarter because o lead time issues in the back end of our process that we have to correct this quarter. So, the turns last quarter were about 46% to achieve guidance that I gave. And the turns need to be in the low 50s. We think that's, you know, a reasonable number for what typically is a seasonally strong quarter, the first quarter. Q - Christopher Finelli: Thanks, guys. A - Steve Skaggs: Sure.

The next question comes from Gary Mobley with A.G. Edwards. Q - Gary Mobley: Hey, guys, I was hoping that you could walk us through, perhaps, what the benefit was from doing a last-time buy program for the particular product you're referring to. Were there customers vying for a few years of demand, future demand in that product? And will there be any in the first quarter? A - Steve Skaggs: Let me just discuss these, the program. Historically it's not something the company has done. We still carry many parts today that we introduced 10, 15 or even 20 years ago. We do this for customer convenience. However, product obsolescence is a standard practice in the industry. Our competitors do it all the time and I believe these programs are well managed and communication, communicated customers accept them. From our standpoint, it becomes prohibitive from both a cost and logistic standpoint to maintain old fab processes, testers and managing multiple mass sets and package combinations while keeping the inventory lean. And as Jan pointed out the inventory is at its lowest level on a turns basis that it's been for quite some time. So for all these reasons, we've changed our business philosophy and plan to review our product line on an annual basis to make obsolescence decisions. We'll be announcing a last-time buy program this month. Under that program customer also have a defined period of time to place orders and take shipments and that will last through the year. We plan to obsolete several very old product lines, including most of the ORCA2 FPGA products, some older low volume CPLD families and certain very, very old proprietary simple PLD products. As Jan mentioned, collectively those products represent less then 2% of the annual revenue so the future revenue will be immaterial. The revenue impact. The inventory reserve we booked in the fourth quarter really represents just a write-down of the on-hand inventory to a level consistent with the expectation to have quantity to support last-time buys through the remainder of 2006. Q - Gary Mobley: Related to this, can you in the future, break out what the revenue contribution was from these products there on a last-time buy program and will you break out in the future what the gross margin contribution is from the reserve taken? A - Steve Skaggs: Well, we don't plan to as Jan mentioned. It was less then 2% of the revenue last year and that is shrinking. There is inventory that's still valued that our expectation of have amount to be sold this year, the reserve represents the amount that we expect to scrap at the end of the last-time buy program so we don't expect there'll will be, you know, a margin benefit from that reserve. Q - Gary Mobley: Okay. All right. I'll jump back in the queue. Thanks.

Q - Bill Dezellem: Thank you. We had a group of questions. First of all, relative to the shipments that, or committed shipments that you was not able to make in the fourth quarter and that slipped into the first quarter, what was the total dollar volume that those represented? And then, that might, to some degree, help explain the second question, which is: Now with the benefit of hindsight, from your perspective, what could cause the revenue to be at the lower end of the range that you had originally set out at the beginning of the quarter? A - Steve Skaggs: Sure. It was a few hundred thousand dollars to think about, $350 to $400,000. Essentially the difference in the guidance range, Bill. And hopefully, that answers both questions at once. Typically, we have very little delinquencies but, in the last quarter, it was difficult quarter given some constraints with regard to assembly capacity availability, substrate, supply and also, because the holiday period made it very difficult to expedite things. Q - Bill Dezellem: Thank you, that is helpful. One additional follow-up. I understand that you don't like to talk about product road map, but given the $2.7 million write-off of the intellectual property, and you mentioned that was due to a change in product strategy, what additional detail, or share with us the additional detailing that about that, please. A - Steve Skaggs: Sure. That was an IP license that we previously acquired and paid for several years ago. We planned to incorporate that type of IP in some of our 90 nanometer products, we developed our internal capability for all the IP and we'll use the internal circuits and not the licensed circuits so we made a slight shift in the product plan which really causes that license not to be necessary. Therefore, we won't be using that and it doesn't make sense to amortize it and that's why we've taken that financial decision. Q - Bill Dezellem: Thank you. A - Steve Skaggs: Sure.

Next question from Robert Toomey with EK Riley Advisors. Q - Robert Toomey: Hi, good afternoon. Steve, could I ask you about the design, design end, excuse me. You said they were just under a 1000 in the quarter and now, cumulatively they're around $2000. Did I hear that correctly? A - Steve Skaggs: You did. Just under is 1000 for the fourth quarter and cumulatively, since we've been disclosing they're now slightly over 2000, so we've been tracking on a pattern where we, in the current quarter generate as many designs cumulatively as we generated in all periods prior. I don't know how long we can keep that up, Robert, but we'll, a good quarter for design. Q - Robert Toomey: So, what do you think, why do you think you got such a large number in the fourth quarter? A - Steve Skaggs: Really, it was the first full quarter of designs in the XP and XO product family. In the third quarter, we had, you know, the first part sampling in that family. In the fourth quarter, as I mentioned, both those products moved to full production release status so really, that was the first quarter where the entire sales force was engaged in designing and all products in those families for an entire quarter. So really, the acceleration of design ends is, actually, ECP designs grew in the fourth quarter, but the large acceleration was due to the XP and XO product line achieving good success and the customer base in the fourth quarter. Q - Robert Toomey: When you say achieving good success, are you saying that you are seeing the design ends being implements in actual, you know, products and customers are going to sell? Is that…… A - Steve Skaggs: That's, yes. Again, to reiterate the definition of design end, a customer, we have what we believe to be a rigorous definition. A customer needs to implement a design of the software and take delivery of a physical sample of our chips. Solder it under a PCB board and, I guess, in some case, socket it, but build a prototype board with our device. And that the vast majority of designs are intended for production systems. Q - Robert Toomey: Okay. And so, Steve, would you say that if you look back over 2005, the design ends or the program for your new products are, you feel you achieved your goals or exceeded your goals for '05? A - Steve Skaggs: We, of course, have a design end plan and we're actually running slightly ahead of that. And you know, I said I think in this forum last quarter, that the design end pace of these next generation products dramatically exceeding the pace at which our first generation FPGA tracked to. What I've been a little hesitant to provide information on is the revenue potential because we don't have a lot of experience with the time to revenue and the revenue design for FPGA products but I did disclose some data in my prepared comments because we're beginning to see some material revenue from these products. Q - Robert Toomey: Okay. One last question, if I might. There was a substrate supply issue, is that continuing and, can you comment on what that looks like here in the first quarter? A - Steve Skaggs: We believe that issue is behind us and if the first quarter, we don't anticipate the type of constraints that I talked about in the fourth quarter. Q - Robert Toomey: Thank you. A - Steve Skaggs: Right.

Q - Maynard Tyler: A - Steve Skaggs: It was a little over $2 million. Q - Maynard Tyler: Okay. A - Steve Skaggs: Yes. Q - Maynard Tyler: And Steve, you mentioned that the ORCA product for FPGA down double digit. Can you share, share with us, if we take out the older ORCA products what kind of growth rate on the FPGA product actually in the fourth quarter? A - Steve Skaggs: We don't disclose, you know, specific product growth rates, but suffice it to say, with the double digit decline, the rest of the business grew. And, you know, that's the ORCA products have been in a decline mode for some time, depending on the specific state of customer, no new design activity with though, we're really just fulfilling business and those product will wind down. They're at a level now where hopefully, it won't have a downward impact and as I mentioned we do plan to obsolete most of the ORCA2 products because they're at a level where they'll really don't have any material revenue at this point. Q - Maynard Tyler: Okay. Also, you mentioned about the consumer product. Was that driven by the EC product line? A - Steve Skaggs: It's really CPLD type products. Really, we had some strong ramps on two customer programs, one was in LCDTV and the other was basically a portable MP3 player where there was, you know, strong consumption of devices in the quarter and as I mentioned, as is necessary in the consumer market, those price points were pretty aggressive Q - Maynard Tyler: And do you think that the consumer sector will be strong again going into the March quarter? A - Steve Skaggs: Typically, that's a seasonably slow quarter for the consumer product but the big driver that I've found is, I'm not sure of the overall market, but it's the ramp of an individual design, because those designs can consume hundreds of thousands or million of units fairly quickly. I don't expect to have such a strong growth quarter in consumer in the first quarter but, you know, that kind of remains to be seen. Q - Maynard Tyler: So that's why you kind of expecting a gross margin to kind of go back to the…… A - Steve Skaggs: I think there's, I mentioned that from an assembly cost increase. We mitigate that with a qualification of a new supplier so cost will go down. The yield issue we experienced with costs some additional costs has been resolved but don't expect to incur those. We also have achieved reasonable wafer price quarters which kicked in during the first quarter. So regardless to have mix change in the business there's a number of positive things that I expect to impact the gross margin in the first quarter. Q - Maynard Tyler: Thank you. A - Steve Skaggs: Right.

Next question is from Mark Edelstone with Morgan Stanley. Q - Sonya Kometsigy: Hi, this is actually Sonya Kometsigy for Mark. I had a couple of follow-up questions, just, you mentioned that inventories were at the lowest levels you've seen in many years, I was wondering if you could give guidance as to where you think that should trend next quarter? In addition, if you could make comments on your current lead time and finally, give some tax guidance for '06 and '07. A - Steve Skaggs: Sure. I'll address the first two points and I'll let Jan address the last point. Inventory is within our target range and we're actively ramping the wafers, particularly for the new products. So, I would expect inventory to plateau. It might shrink a little bit in the last quarter because there's a very long pipeline. We do plan to ramp our wafer starts and carry more inventory in the package form. Traditionally, we carry 70 to 75% of our inventory in die bank and we'll be modifying that because of some of the constraints I talked about. Lead times, we typically like to have our lead time in the two to four-week period. Some parts are in the four to six week period and we believe will be back to the two to four week period by the end of the quarter. And our new products lead times are not at the level yet because of the demand situation, we plan to drive those down during the quarter, to that level. That's our corporate goal, two to four weeks. Jan, you want to talk about that? A - Jan Johannessen: Yes. You refer for your planning, you can, we plan on basically booking a provisional about $200,000 a quarter in taxes for the next couple of years. We don't anticipate paying any income taxes in that period. Those are mostly foreign taxes. Q - Sonya Kometsigy: Thank you.

Next question comes from Alex Woodward, Madonna Capital. Q - Alex Woodward: Good afternoon. A - Steve Skaggs: Hi, Alex. Q - Alex Woodward: Just wanted to ask, real quickly, what were turns during the quarter and what kind of turns do you have factored in for your Q1 guidance. A - Steve Skaggs: The turns are 46% and factored in as turns to be in the low 50s. Q - Alex Woodward: What were returns last year in Q1? A - Steve Skaggs: I don't have that number offhand. Perhaps we can get it for you and give it to you offline if that's okay? Q - Alex Woodward: That's cool. It sounded as though, if I got this right, you did about a million dollars just under that from the new product families in Q4? A - Steve Skaggs: Yes. Two things happened. That's, you heard that correctly. And second, during the quarter at some point, I didn't keep track because we were pretty focused on the restructuring. The ECP product family passed a million dollars in revenue on its own, cumulatively. We would have done a press release but we were busy restructuring the company, I thought that was more important but I wanted to make sure people heard that in this call. Q - Alex Woodward: And the guidance for Q1 is roughly a double or almost $2 million? A - Steve Skaggs: Yes. Q - Alex Woodward: So is it a good way to think of that is you're going to get 2% sequential growth from the new products and then the rest of the business is kind of zero to 3% growth in Q1? A - Steve Skaggs: That would be how the math works. That's so, I would concur. Q - Alex Woodward: How many, to get to 2 million, how many different design wins is that going into production? A - Steve Skaggs: I don't have that quantified but, that's essentially if you look at the backlog for this part you look at the field forecast, that's what I suggested. Q - Alex Woodward: So, I guess, let me ask the question this way. How many of the new designs wins you guys have up to 2,000, have many of those have gone into production? A - Steve Skaggs: A handful. Q - Alex Woodward: Like a dozen? A - Steve Skaggs: I don't have the exact number, Alex, and I don't plan on generating it in this forum. If you look at the 2000 designs, some percentage won't go into production so there will be some yield fallout because the customer cancelled their product plans or they do a redesign for performance or some other future issue. We expect the majority of those will go into production. If you look today, the revenues being generated by a handful of designs that have moved into the production phase. That's really as granular as I can parse it at this point. Q - Alex Woodward: Okay. The last question I had is, do you have any updates that you might be able to us on the programmable analog products that you have? A - Steve Skaggs: Sure. We introduced two parts last quarter. One was basically, a cost reduced power management part. We feel we can expand the markets for power management circuits by reducing the cost points. And so that's, the Power Manager II. And then we've introduced a extension to our clock management products. So those were introduced last quarter. Fortunately, unlike the FPGA business the cost of introducing and designs those products was fairly low. At this point we've seen a lot of good design activity on those parts, but the revenue is, you know, reasonably immaterial but we do anticipate some growth out of that business as well. Q - Alex Woodward: Thank you. A - Steve Skaggs: Sure.

Gary Mobley of AG Edwards. Q - Gary Mobley: Jan, do you plan on making out the breaking out the FAS-122R option out of expense out of the, in the non-GAAP numbers in the future quarters? A - Jan Johannessen: No. Q - Gary Mobley: And going back to the topic of the IP write-off. Does that relate to a change in strategy to using an internally-developed soft process core as opposed to externally developed? A - Steve Skaggs: No. Q - Gary Mobley: Okay. Great, thanks, guys.

Next question from Bill Dezellem with Tieton Capital Management. Q - Bill Dezellem: Thank you. Following up on the 2 to 5% sequential growth, Alex dialed into the question I was initially thinking about. However, it's been so long since we had what we would consider normal seasonality. Would you please remind us, the March quarter relative to the December quarter, how you would characterize normal seasonality there and, are you anticipating normal seasonality this year? A - Steve Skaggs: Kind of a loaded question, but yes, we are anticipating normal seasonality. You know, we can, what's normal and it seems like we haven't had one for some time and particularly, as the PLD market diversifies and the application states were subject to the whole host of, you know, new market pressures. For example, the consumer market has a different seasonal pattern then, perhaps, the communications or computing markets. But in general, the summer quarter is a slow quarter because of vacations and holidays, particularly in Europe. And the winter quarter, in my experience, tends to be a slower quarter because of holidays, but also because there tends some inventory squeezing that occurs as people dress up their year end balance sheets, in my opinion. Typically, if you look at the sequential growth rates, I would characterize as the normal year as the Q1 and Q2 growth rates being approximately double the year Q3 and Q4 growth rates, as I mentioned, people's exposure to different markets, new products cycles, customer issues and all that, can definitely skew that type of statement. So, that's how I would answer your question, Bill. Q - Bill Dezellem: Not to get ahead of ourselves here, but if things come together as we would hope and since we've got almost 2% sequential growth built in simply from the new product families, really decent opportunity to be towards the high end of your sequential revenue guidance? A - Steve Skaggs: We'll have to see. I gave you the data I gave you and that's, you know, we see what we see. Q - Bill Dezellem: Thank you. A - Steve Skaggs: Sure.

At this time, there are no further questions. I'll turn the conference back over to you for any additional or closing remarks. A - Steve Skaggs: We have none. Thanks for attending. And as always, feel free to call the Company for any follow-up questions. Thank you.

This concludes today's conference call, you may now disconnect.