David Pasquale – Global IR Partners Darin Billerbeck – President and Chief Executive Officer Joe Bedewi – Chief Financial Officer

Richard Shannon – Northland Capital Sanjay Devgan – Morgan Stanley Ruben Roy – Pacific Crest Securities Nick Clare – Robert Baird Sujeeva De Silva – ThinkEquity David Duley – Steelhead

Good afternoon. My name is Leonard and I will be your conference operator today. At this time, I would like to welcome everyone to the Lattice Semiconductor first quarter 2011 conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) I would now like to turn the call over to David Pasquale with Global IR Partners. You may begin. David Pasquale – Global IR Partners: Thank you, operator. Welcome everyone to Lattice Semiconductor’s first quarter 2011 results conference call. Joining us from the company today are Mr. Darin Billerbeck, the company’s President and CEO, Mr. Joe Bedewi Lattice’s CFO. Both executives will be available for Q&A after the prepared comments. If you have not yet received a copy of today’s results release please email Global IR Partners using lscc@globalirpartners.com or you can get a copy of the release off of the Investor Relations section of Lattice’s website. Before we begin the formal remarks, I will review the Safe Harbor statements. It is our intention that this call will comply with the requirements of SEC Regulation FD. This call includes and constitutes the company’s official guidance for the second quarter of fiscal 2011. If at anytime after this call we communicate any material changes to this guidance, we intend that such updates will be done using a public forum such as a press release or publicly announced conference call. The matters that we discuss today other than historical information includes forward-looking statements relating to our future financial performance and other performance expectations. Investors are cautioned that forward-looking statements are neither promises nor guarantees. They involve risks and uncertainties that may cause actual results to differ materially from those projected in the forward-looking statements. Some of those risks and uncertainties are detailed in our fillings with the Securities and Exchange Commission including our fiscal 2011 10-K and our quarterly reports on Form 10-Q. The company disclaims any obligation to publicly update or revise any such forward-looking statements to reflect events or circumstances that occur after this call. Our prepared remarks also will be presented within the requirements of SEC Regulation G regarding Generally Accepted Accounting Principles or GAAP. I would like to now turn the call over to Mr. Darin Billerbeck. Please go ahead, sir. Darin Billerbeck – President and Chief Executive Officer: Thank you, David, and thanks to everyone for joining us on the call today. The first quarter was a strong one for us across the board. Results came in at the high end of our prior guidance as we benefited from our competitive product lineup and market growth. Our revenue came in well above the high end of our prior guidance. We did not see all of the upside is fallen driven. Based on our customer feedback, we believe that only one $2 million of the upside came in from unexpected Japan related safety stock buying. The rest of the upside reflects the continued strength in our business, along with a higher than anticipated demand from our mainstream products. In terms of specific results for the quarter, revenue of $82.6 million was up 13% from the $73.1 million in Q4 of 2010 and up 17% from the $70.4 million in Q1 of 2010. Gross margins came in at 60% compared to the 62.7% in Q4 of 2010 and the 58.5% in Q1 of 2010. Positive demand trends in the consumer, industrial and other end-markets were bolstered by a pickup in the communications market. Additionally, we are pleased with the design win momentum for our recently launched MachXO2. PLD designers have praised MachXO2 for its unprecedented mix of low power, low cost and high system integration. Let me now give you some additional color on the quarter. The revenue mix of new, mainstream and mature was 44%, 32% and 24% of revenue respectively in Q1. This compares to new at 43%, mainstream at 30% and mature at 27% in Q4 of 2010. New products were up 16% quarter-on-quarter outpacing the company’s over all growth of 13%. A particular note in the new category was our LatticeECP3 family, which grew 32% quarter-on-quarter and our programmable mixed signal families, which grew 28% quarter-on-quarter. The mixed signal family now account for 6% of our total revenue. Mainstream products were up 20% quarter-on-quarter with growth in all the one product family. Revenue from FPGA products represented 38% of the total revenue in Q1 compared to 33% in Q4. PLD products represented 62% of the total revenue in Q1 compared to 67% in Q4. On a geographic basis, revenue from Asia including Japan decreased to 61% of the total revenue compared to last quarter’s 66%. This decline was primarily due to Japan. Revenue from North America increased quarter-on-quarter to 18% of revenue compared to 15% in Q4. Europe also increased coming in at 21% of revenue compared to 19% of revenue in Q4. On an end market basis all markets increased on an absolute dollar basis. Communications was 44% of revenue in Q1 compared to 46% in Q4. Computing was unchanged at 13% of revenue in Q1 compared to 13% in Q4. Industrial and other came in at 31% of revenue in Q1 compared to 29% in Q4. The increase reflects the sequential increase in sales of our mainstream products. Consumer was unchanged at 12% in Q1 from 12% of revenue in Q4. We see the consumer market as a growth segment, especially for MachXO and MachXO2 product family, along with 4000ZE CPLD family which is ideal for ultra low power, high volume portable applications. Finally, let me take a minute to comment on the situation in Japan and the restructuring noted in our Q1 release. In terms of Japan’s severe earthquake and tsunami we express our deep concern for the people of Japan and the difficult situation surrounding the affected nuclear power plants. We continue to prioritize the safety of our partners and our employees. Despite the severity of the post earthquake and tsunami conditions, we have not experienced any material impact on customer deliveries and our lead times. With regard to the restructuring noted in our Q1 release, the actions that we are taking will better position Lattice for short and long-term success. The steps we are taking follow a very deliberate, strategic planning and review process conducted over the past few months. As a result of the output of the strategic review, we are taking the opportunity to refocus our research and development site competencies to accelerate our product roadmap. Our model is simple. For each core competency we would have a single U.S. site aligned to a single low-cost site. In short-term we’re well positioned for continued growth with our current product lineup. Our restructuring actions will make us even more competitive in the long-term. There have been several other positive outcomes of our strategic planning process. During the quarter we completed the restructuring of executive team. In that regard we now have a single business group led by Sean Riley to better prioritize our corporate strategy to our sales force. One keynote, we have not made any changes to our sales force or our outward facing customer engagement processes. In addition, Joe Bedewi has joined us as our CFO. Joe’s extensive operations and supply chain expertise will help us attain our aggressive manufacturing and operational goals Focusing on the bottom-line will help us both expand our top-line business into new markets along with creating a clear focus on maximizing margins. Importantly, all employees at Lattice understand the company’s strategy and what they needed to do to make our company successful. That concludes my initial comments. I will now turn the call over to Joe for additional color on the financials. Joe? Joe Bedewi – Chief Financial Officer: Thanks Darin. As noted earlier, revenue for the first quarter was $82.6 million, an increase of 13% from the prior quarter and up 17% from a year ago period. This is above the high-end prior guidance for revenue to increase 2% to 7% sequentially. Gross margin for Q1 was 60% compared to 62.7% in the prior quarter. This is at the low end of our guidance reflecting product mix. Total operating expenses for the first quarter came in at $39.1 million compared to $32.4 million in the fourth quarter. As the company discussed on the Q4 call, the increase reflects the shift in timing to Q1 ‘11 from Q4 ‘10 of engineering mask costs which taped out in early January. The balance of the increase is related to restructuring charges in Q1 of approximately $1.8 million and labor related charges. We do not expect the level of tape out expenses to reoccur in any other quarter in 2011, although we are working on several new products that will have R&D tape outs during the year. Our Q1 net income was $10.9 million or $0.09 per diluted share, as compared to $13.9 million or $0.11 per diluted share in the fourth quarter and compared to $11.1 million or 10% per diluted share in the year ago period. Q1 2011 financial results include approximately $1.8 million or $0.02 per diluted share of restructuring charges related to the actions taken in Shanghai and Pennsylvania noted earlier by Darin. Based on the current plan, we expect to have restructuring charges of approximately $900,000 to $1.4 million in Q2. Restructuring charges will decline as we move forward and are expected to be substantially completed by the end of the year. At the current share price, we expect diluted share count to be approximately 122 million shares. The share count reflects our purchase of approximately 709,000 shares valued at approximately $4.3 million under our $20 million one-year share repurchase program. This follows our purchase of 371,000 shares in Q4 valued at approximately $2 million. The program continues to be active. Moving on to our balance sheet. Our balance sheet was further strengthened in the quarter. We generated an additional $1.2 million of cash from operations ending the quarter with cash, and cash equivalents and short-term marketable securities balance of $235.7 million and we continue to have no debt. Accounts receivable at April 2 were $49.9 million compared to $41.2 million at the end of last quarter and days sales outstanding were 54 days compared to 51 days last quarter and 62 days in Q1 2010. Inventory at April 2, 2011 was $38.1 million up from $37.3 million last quarter and up from $24.7 million the year ago period. Months of inventory now stand at 3.5 months compared to 4.1 months at the end of Q4 2010. The majority of the increase is in new products needed to meet expected future demand. We spent approximately $4.1 million on capital expenditures during the first quarter down from $5.3 million in Q4 with quarterly depreciation and amortization expense at $4.2 million compared to $3.8 million in Q4. This concludes the financial review portion of the call and I’ll now turn things back over to Darin for the first quarter business outlook. Darin Billerbeck – President and Chief Executive Officer: Thanks Joe. In summary, Lattice remains on track for continued success and market segment share gains. We continue to leverage our competitive product portfolio and to gains at existing customers and new customers. We also continue to actively pursue new market opportunities. We have a great team in place and look forward to another strong year. Let me now turn to our second quarter expectations. We expect revenues to be flat to up 5% as compared to Q1. Q2 gross margins are expected to be in the range of 60% to 62%. Total operating expenses are expected to be approximately $38 million including approximately $900,000 to $1.4 million in restructuring charge. This concludes our prepared remarks. Operator, we will now be happy to take any questions.

(Operator Instructions) Your first question comes from the line of Richard Shannon with Northland Capital. Richard Shannon – Northland Capital: Hi guys. Congratulations on this very nice numbers here in the first quarter. Guess I got a couple of financial related questions. I guess first on the gross margins, it seem like if we compare the fourth quarter to first, both quarters had some pretty strong benefit from your mainstream kind of products, we had a very divergence pattern in gross margins. I kind of curious what gives you the confidence that you’re still seeing in that range and maybe understand a little bit about the mix that’s driving it in each direction in those two quarters would be great to know. Thanks.

Yeah, so let’s talk about that a little bit. So, as you know mix affects our gross margin significantly. This quarter we had an actual, a very large percentage going to consumer which is one of the markets we are going into, plus our ECP3 product line, right, which is again our FPGA new entrant products are usually lower margin than our mature products as you know that well Richard. So the bottom line is that we are going to expect that we won’t ship as much in consumer. We got a pretty good pop this quarter. We won’t be shipping as much next quarter. But all in all it’s really going to come down to us controlling really the cost structure so that the new products and also some of the consumer products have lower cost structure that we have to be able to keep the margins up in those high 50s and 60% range. So we feel confident about the product mix that we have next quarter associated with that and then the associated gross margins that we are forecasting. Richard Shannon – Northland Capital: Okay, fair enough. Next question also on the financial side on OpEx, it’s got a number for the second quarter which I guess I’m kind of looking at it stripping out the restructuring and still a number certainly elevated from the levels we saw in 2010. You mentioned that you don’t expect any major mask costs. I guess how should we think about this going beyond the second quarter? We are going to see numbers that get at least into the mid 30s, low 30s or how should we think about this?

From the operational perspective?

OpEx. Richard Shannon – Northland Securities: Yeah, OpEx, yes.

That’s good question. As we go forward, w are thinking in the mid 30s range is about, where we expected to be through this year. There are some transitional elements going on this year as we do the restructuring. So, you are going to see some, I’d say some lumpiness in those numbers as we transition. Richard Shannon – Northland Securities: Okay.

But it’s going to be in that range. You won’t see any good savings this year. The restructuring really wasn’t designed to do a cost savings exercise. It was more of a strengthened our operational capabilities and efficiencies exercise, but we do expect to see benefits of that as we move into 2012. Richard Shannon – Northland Securities: Okay. Can you describe any more detail these transitions and improvements in anyway, they help us to understand I’m assuming you’re thinking that you are spending a little bit money this year and hopefully we will leverage that to a greater extent in 2012 then?

Are you talking about the restructuring? Richard Shannon – Northland Securities: More on the R&D side, it seems like more of the OpEx figure related to the R&D side so I’m kind of curious. If we kind of understand some of those transitions?

Yeah, I mean the transitions are pretty simple. We are trying to go to more of the single US side to the low cost geography and to do that it means you are going to have to doubled up a little bit on the competency as you move forward right, because you have certain competencies that existed one-side that don’t exist to another and so we are having to do is build those competencies and get center of excellences aligned to that strategy. So, we’re really doing a lot of that and so this year is really that transition, where you have to spend a little bit more money to put it in place, but anymore very efficient later on, because we don’t have the structural issues that we have today. Richard Shannon – Northland Securities: Okay, all right. That makes sense. Maybe two quick questions are remaining from me. Darin, what’s your view on in general the communications market in 2011; obviously, you had a good start of the year with nice sequential growth rate. Any thoughts in terms of the spending plans that might drive improved results throughout the rest of the year specifically on wireless?

Yeas, I mean I’ve seen a lot of different dialogue out there on the web about China crashing and everybody crashing. We haven’t seen that today as far as our demand. The India built-up sales team to be solid and I really think there is probably a couple of different market dynamics going on. You have the midstream market like the 3G market I’d call it today and those are the markets, where people have ARPUs of $4, $8, $10 that are going to go to 4G anytime soon. And then you have the high end 4G market, which what I can see Verizon and others already marketing that in the US. So, I think you really have to look at those markets separately. As I said our products are more in that midstream 3G moving to 4G long-term. So, we may not be seeing the impact others do as they build out some of the, I want to call it emerging economies and so the emerging countries that are coming up with 3G. I think we’re seeing more of that, but we’ll see. Again I think it’s anybody’s call on that second half of the year if things continue to roll. Richard Shannon – Northland Securities: Okay. Fair enough. I appreciate those thoughts and I’ll jump online. Thanks guys.

Thanks, Rich.

Your next question is from the line of Sanjay Devgan with Morgan Stanley. Sanjay Devgan – Morgan Stanley: Thank you so much for taking my question. Just a quick question on your FPGAs, the ECP3 product, you talked about the kind of the midstream 3G kind of in the, it gave us a price range there. I was wondering as we transition to LTE-based solution. Can you talk about the content opportunity per box that you have there, kind of going forward relative to what’s you have today?

Yeah, I’ll talk a little bit about. So, the fact that our ECP3 product fits within 3G, it doesn’t excluded from the 4G LTE market, right, because there is a lot of opportunities. Remember we play in that last mile of the infrastructure, right. So we’re not in the backhaul and we are in this. So, we play with quite a few different products. We play with our ECP3 product. We play with our XO2 product and XO, and we also play with our power management product. And in the new piece of block approach is where they have more of the distributing wireless networks. There is some multiple of those products for piece of box. So there is a lot of opportunity for us to grow and even within the 4G stuff there is different versions of 4G some use very high-end products, we don’t play in and others use more of a moderate product mix that we do plan. So we have three to four different product types that play in that. It’s not ECP3 only. It’s XO and XO2 within all of those different architectures. So we feel comfortable about the product mix that we have in that area and we feel confident that we’re well positioned from that mid density on down. Sanjay Devgan – Morgan Stanley: And then I guess just as a follow-up, sticking on with the LTE theme, there has been a lot of discussion – one of the benefits, reason why FPGA seemed to be taking share from ASICs is just a programmability that allows kind of in a hardware solution. But I was wondering if you could talk to kind of the guys with multi-core solutions they’ve also talked about kind of going after this LTE market and if you just at a high level talk about the trade-outs between the FPGA versus a multi-core solution and your thoughts in each of that, you could share there will be appreciated.

Yes, remember that we’re not the processing part in a lot of these applications. Right, there is a lot of applications that do have like backhaul and other things have monster microprocessors and that are driving a lot of the data and the infrastructure and we’re playing more in that extension of that out to the wireless network or the wireline network, both of those, right. So I think in our particular area, it’s probably not these monster microprocessors that we’re competing again. It’s more really the functionality and it’s called reliability and reasons where if they have an upgrade or they want to do something with FPGA, given the ability to reprogram on the fly and there are a lot of things you could do in the field. Some of these other systems, I think there will be a complementary systems within each part of the designs being there will be high performance processing that have those when you have people like us that do this transceiver receiver stuff that it will still be in the system. So there could be a shift over time if it gets very high-end, but I think you are always going to see the extensions of that being FPGA. Sanjay Devgan – Morgan Stanley: Okay, thank you very much.

Your next question is from the line of Ruben Roy with Pacific Crest Securities. Ruben Roy – Pacific Crest Securities: Darin, I was wondering if you could comment a bit more on the customer feedback that you got around safety stock buying. Can you iron that out into or flush that out in terms of if that’s related to any specific end market or how that’s working out and do you see that carrying on safety stock buying into Q2?

Yeah, I mean, it’s a hard one to call, because I think what happened was we saw a couple of customers that were very concerned. It’s usually the larger customers are very concerned about their supply, and so some of the buying patterns that we saw were huge orders all the way. So if you ask me turns versus backlog that the turns are probably going to go down, because everybody is ordering way ahead of time to ensure they have their, they get what they need for their supply. We’ve talked to a couple of our larger customers and have those discussions and don’t worry we have plenty of supply. And let’s not forget that we came out of Q4 with inventory with a slight softening in some of the markets. So we were buffered because of that. But what we don’t want to see is that somebody come in and do this rash buy and then you end up with a giant quarter and the next quarter is really small and then because they don’t know what inventory they really need. So what we’re trying to do is work with the run rates that people have, work with the lineary that we have, and then make judgments based on what they really need, what demand they have from an end customer. We are not trying to manage anything. We are just trying to manage to ensure that we don’t get an over-demand in certain situations, further situations. So we are working closely with the big guys and that’s most of the difficulty we have today. I think the moderate and small players aren’t being as irrational, I would say, as some of the bigger customers. And the irrational stuff is normal right, because some of the products that they have in their end products are constrained and then we know that, so we’re trying to balance that and also see who else is in the systems that we’re in. Ruben Roy – Pacific Crest Securities: So, thank you for that. And is there an assumption for some safety stock in your guidance that you provided for Q2?

Yeah, I mean, Q2 we’ll see a little bit. I would argue that we’ll see a little bit of that. But who knows because we saw a little bit of it in Q1, which we called out, right we said hey we saw $1 to $2 million that maybe should have been in Q2, that could have been in – that is in Q1. I think as after you have all the discussions and people recognize, it maybe the situation for some suppliers isn’t as bad, I think some of that will pull back. So I think this quarter probably in the first half, you will start seeing people say, okay, these guys are shipping linear to us, I’m not going to worry about them as a supplier. So we might see a little bit, but I don’t think it’s going to be material. Ruben Roy – Pacific Crest Securities: Thank you. And in terms of lead times, your comment in the prepared remarks around no impact to customer deliveries or lead times was that specific to Japan or I mean the broader Lattice portfolio of products, you’ve not seen any changes to lead times Q1 versus Q4?

That’s correct, the entire company. Ruben Roy – Pacific Crest Securities: Okay.

It’s not just specific product, right. Ruben Roy – Pacific Crest Securities: Right. And then finally in terms of the restructuring and kind of the acceleration of some of your products roadmap, over the past, I would say five, six years, Lattice has carved out more of a focus on not so much competing against the larger programmable logic device manufacturers and maybe aiming more at kind of lower end and mid end applications, which in some cases, kind of the expensive application specific products etcetera. So in terms of the accelerated roadmap, has that thinking changed at all or if you can give us some incremental detail on how you expect to accelerate roadmap, that will be great?

Yeah, I think the first way that you do is use some of the innovations that are out there today. And we haven’t traditionally been as good on a B grade or at cadence rate of how we deliver our products to market, right. And a lot of the times it’s taken us multiple stepping. So there’s things we can do there that are just some basic things that you want to do. But I want to be very clear that our market segment that we focus on is still the same market segment. We want to be excellent at the mid range and below, which means and in any one of the market segments the more products you have, the better. So our plan is really accelerating a lot of the derivatives that we had on the roadmap such that we can expand our market segment share in those markets we’re playing out. We don’t want to try to accelerate up on a rocket pace to be one of the big guys that’s still not the intention. We’ve made that clear to everybody. Right, so it’s really within the portfolio of products we have. We want to spend more derivatives to expand our market segment share in the market that we plan and we think that will help us grow a lot. Ruben Roy – Pacific Crest Securities: Okay. That’s all I had. Thanks Darin.

Yep.

(Operator Instructions) The next question is from the line of Nick Clare with Robert Baird. Nick Clare – Robert Baird: Hey, guys this is Nick Clare calling for Tristan Gerra. I was just wondering if you could comment at all on the Huawei and ZTE is inventory deleveraging. I know, you had mentioned that you guys hadn’t seen in some of the markets just because you’re a little bit more a niche market provider. But I guess if you could any color you saw there if it did have any impact on your 1Q results are kind of moving forward would be helpful?

Yeah, I don’t think we want to specifically comment on any one customer, but I can tell you this. I think that there’s customers out there that maybe using the opportunity of some of the constraints to gain market segment shares. Right, I mean, I think there are people out there that are trying to do that. But I didn’t see – I mean, we didn’t see anything that was really out of the norm from our suppliers although, we’re starting to see people that are actually going back, people came in and ordered a bunch of step-up and in many cases everyone got a lot of backlog, which I think is normal on these situations and I think now people are saying, all right, that’s pretty good. So I don’t think it’s – I think it’s smooth out in the last probably two to three weeks, whereas the first two to three weeks of the situation people were just calling everyone what’s the situation and some of it was the big microcontroller and microprocessor groups that got hit and you guys know who those guys are. So we’re looking more of that. Do we get constrained by somebody else on the system on the bill of material in their system versus if somebody trying to really do something different here, but I think there might be a few people out there trying to gain share at this time. We don’t see that as being significant in Q1 and we don’t see it being significant in Q2. Nick Clare – Robert Baird: Okay. And then the other thing was, I guess, beyond 2011 then, just because you mentioned your – the restructuring charges were necessarily kind of implemented as a cost reduction opportunity. But as those kind of taper off here in 2011, did you see kind of further cost reduction opportunities for the company going forward as a result or in other words?

Yeah, absolutely. I think the plan that we have right now is again when you try to short things up, your spending goes up a little bit as you’re trying to take its sight down or take a situation down or you’re trying to bring one up in a different competency. And so what we’re trying to do is as you align those competencies to the center of excellence, we really got to focus on being able to then take the R&D model and switch it over time. We won’t get there probably this year and next year to drive R&D, but as our revenue grows, you would expect us to be a lot more scalable, so we’re not spending as much from that perspective. You’ll get more out of R&D that you did in the past. So, I would expect our models on percentage of R&D as we grow revenue to go down. This year and probably part of next year we’re going to still be going to that transition. Nick Clare – Robert Baird: Okay great. That was it from me. Thanks guys and nice job in the quarter.

Your next question is from the line of Sujeeva De Silva with ThinkEquity. Sujeeva De Silva – ThinkEquity: Questions on the restructuring, is there any up opportunity benefit for the gross margin on a secular basis. I know it moves around with mix, but its there anything you can do that that would help that trend upwards over time?

Through the restructuring? Sujeeva De Silva – ThinkEquity: Yes or just any efforts in general help the gross margin not just move around to mix.

I think yes so let’s talk about a little bit. I think in the front end of this, no the front end is really focused on research and development because I think that’s what we’re trying to focus on right, just get more products out. I think bringing Joe in is going to be huge for us because we’ve been we’re going to focus on the bottom-line and also on the ability for us to get more out of the operational side, right. So right now the biggest what you want to do first and foremost, which is in the priority orders you want to get more out of R&D and then as you’re growing this thing you can be taken stuff out of the ops, right and we see opportunities in both of these areas as we move forward. We don’t have solid plans at this point to restructure anything beyond what we said so far. Sujeeva De Silva – ThinkEquity: Clarification and then competitively in the market you’re focusing on the mid and low end are you seeing any changes competitively from your larger competitors?

Oh yeah, I think by the way competition is great. I mean I love the fact that you create a market in certain areas. I think we created a market with ECP3, which was a mid range comps part with 30s and a lot of people went “wow” that’s a pretty interesting way to approach it. So I think I would expect them to respond, the question is really can they execute, who can execute and can people ramp and get the design wins because these things they don’t happen overnight design wins don’t. So we got to be prepared for the next wave of design wins that we’re looking at and again the 3G extension and then eventually we have to be looking at that 4G market. Sujeeva De Silva – ThinkEquity: Great and last question, the MachXO2, what market is new or what markets are those end-markets that product is focused on or is it broad-based?

It’s pretty broad-based. I want to make one correction is that XO2 is a ship release not launched. Sujeeva De Silva – ThinkEquity: Sure.

Right, so we launched that last year. We ship released it this past quarter, which is huge for us that thing goes everywhere. I mean it’s a great, as we marketed as a Swiss Army knife it does a ton of things. It’s a very, very low power. So you can find its way into anything from smartphones to office automation to hard disk drive. You name it that thing can go over. So we’re really comfortable with that. It’s a product that will open new markets for us and also help us to expand our reach with the low power applications. Sujeeva De Silva – ThinkEquity: Great. Thanks.

Your next question is from the line of David Duley with Steelhead. David Duley – Steelhead: Congratulations on a nice quarter. Thanks for letting me to ask a question. I was wondering I notice that your sales in the United States were up I think they are 36% sequentially. Could you talk a little bit about what the driver was there?

One big consumer application that we had one of our military upsides that we didn’t expect. So we’ve got some stuff that went in there, but big consumer pop and the military pop. And I argue this it probably wouldn’t have been up that high had Japan not been down so low right, because Japan again we got hit there was a lot of issues there. So all-in-all I think we faired pretty well on that we expect Japan to do quite a bit better next quarter. David Duley – Steelhead: Okay. I’m sorry if I missed this, but have you seen any sort of supply constraints from either any of your test and assembly partners particularly with either the BT Resin or anything like that, were you having troubles getting substrates during the quarter or do you see any troubles get going forward?

Just first time, I think there was a lot of constraints from thin copper substrate to BT laminate that you named, and we called those organic laminate substrates. But the bottom-line is yeah, there were all sorts of things out there, but the key is, it’s been on industry standard product lines. So that one that something like does happened you shift over to another supplier. I think when people had customized solutions they got nailed then you have a problem. But a lot of these things and you’ve seen by the way, you’ve seen other companies bought with the thick PCN it’s a take it or leave it, convert here is what I got because reaction is pretty bad right. So I think there is the mix of that. There are so many different types of laminates out there today, they’re industry standards. That you just got to make sure, when you build your manufacturing flow that you qualify quite a few different ones, upfront so if situation happens, you just move to the next supplier, right. David Duley – Steelhead: Okay so you can switch off between Mitsubishi and Hitachi without any problems or your substrate to that [account]?

Yeah, right and then the other is that people haven’t alluded to a lot is that you got things like molding compounds, right. David Duley – Steelhead: Yeah.

That got hit, right and that’s another one. If you really qualify, you cross qualify early up and then those things just become simple PCN that aren’t a big deal. So I think what happen is there is probably a lot of people that were single sourced in certain areas and they are like, oh my gosh what do I do. We have experience with a lot of different – the older the company, the more experience you have with the more different assembly test suppliers. And so you kind of have an advantage there where you know what the molding compounds are, who builds and all that stuff. David Duley – Steelhead: Okay. That’s good news.

Yeah, we’ll have to do some simple things as backups just in case something doesn’t come up, but more of our qualifications are just backups to things in case because we feel comfortable with supply plus a lot of these things, you have six months, people have to build these things probably six months in advance. David Duley – Steelhead: Yep.

You have to keep six months of inventory. So we feel comfortable with where we’re at, that’s why we said we‘re not going to have any real impact. David Duley – Steelhead: Great. One final question from me. You’ve touched upon it a little bit, but I am just little confused about the operating expense guidance. Essentially you just, you did like 39 million in operating expenses, without the restructuring it was 37 million and you’re guiding to 38 million in this upcoming quarter and there is about $1 million of restructuring. So it looks like the operating expense levels are flat net of the restructuring. And since there was left, $3 million left mask cost in this upcoming quarter than last quarter, I am wondering what the incremental $3 million of spend is actually on?

Hold on a second. Yeah, I think some of that 3 million, 3 million was clear mask that’s right because we had a bunch of the mask sets that went out last quarter. This time -- here is what’s interesting, we have a lot of wafers that we’re loading out for some of the new products which are classified there plus – yeah, okay so bottom line is we’re going to get some spending from new products which was good. We have some restructuring in there which is good and the rest of it is all labor and things like that that we’re using plus some additional contractors that we have because what we did in order to do a shore up as we’re doing some of the restructuring and building the competencies we had actually used outside services. Right, so we had to go to other places to go in there and say okay we’re contracting stuff out as a backup and accelerate it to our product roadmap. And so that ended up kind of showing up in Q2, which is what we’re going to have to do. That’s why I was talking about there is an interim kind of process we’re going to go through. What I can tell you is that the basic run rate that we’re seeing as we move through is not going up a lot. We’re keeping that in check, but we are putting variable on top of it to short some of our gaps. So no products… David Duley – Steelhead: It will be more like the September quarter, when we see a more normalized level of operating expenses then?

Well, yeah, I would expect it to get better, but remember these new products – our new products that’s coming out, the next product after ECP3 comes out in that again. So we may have one more quarter or so and then we should start seeing it come back to normality, right… David Duley – Steelhead: Okay.

Again, we are spending a lot of time doing that right now, because again there are certain competencies that as you redeploy in one area and you’re moving them to buildup the next area, you’ve got us buffer that, that’s how we’re doing it. We’re doing it with outside contractors. David Duley – Steelhead: Thank you very much.

Yep.

(Operator Instructions) Your next question is from the line of Richard Shannon with Northland Capital.

Rich, you’re back? Richard Shannon – Northland Capital: I am. Just one last question on your second quarter guidance, I’m kind of curious, kind of the puts and takes in terms of the end markets and also on the product age, whether there is any large divergence in any of the categories relative to the midpoint of guidance?

Yeah, I don’t see a lot. I mean, today – if you are talking about its comps going up or down or things like that? Richard Shannon – Northland Capital: Exactly.

Right, yeah. I think it’s going to be pretty consistent with what we saw this quarter minus some of the little pops here and that we talked a little bit about the military and some other things that we had right, but I think it’s going to be relatively fixed. Okay, if there is anything that will be hard to call it probably would be variability and comps, right. Richard Shannon – Northland Capital: Okay. All right, fair enough. And then product age, we’re expecting to see a good quarter image in the mainstream like we have a past couple?

We don’t really see anything, we tell us anything different. Richard Shannon – Northland Capital: Okay. All right, great. That’s all from me guys. Thank you.

All right. Thanks Richard.

(Operator Instructions) There are no further questions. I would now like to turn the call back over to Mr. Darin Billerbeck. Darin Billerbeck – President and Chief Executive Officer: Okay. I just want to thank everybody, great quarter. We feel really comfortable with the strategy. We spent a lot of time on it. And we have some restructuring that might be a little – create a little anxious, but it’s all for good especially in the short-term and long-term. So again thanks for the call. Thanks for everybody asking really good questions and onward to next quarter.

And this concludes today’s conference call. You may now disconnect at this time.