Jeff Palmer - IR Dr. Sehat Sutardja - Chairman, President and CEO George A. de Urioste - Interim CFO

Allan Mishan - Oppenheimer & Co. Uche Orji - UBS James Schneider - Goldman Sachs Srini Pajjuri - Merrill Lynch Shawn Webster - JPMorgan Craig Ellis - Citigroup Craig Berger - FBR Capital Markets Adam Benjamin - Jefferies & Company Arnab Chanda - Deutsche Bank

Good afternoon everyone. Welcome to Marvell Technology Group Fourth Quarter Fiscal Year 2008 Financial Results Conference Call. My name is Antoine, and it would be my pleasure to be your coordinator for today. At this time, all participants are on a listen-only mode. We will be conducting a question-and-answer session towards the end of this conference. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to Jeff Palmer, Senior Director of Investor Relations. Jeff Palmer - Investor Relations: Good afternoon everyone and welcome to Marvell Semiconductors' fiscal fourth quarter 2008 earnings call. On the call today is, Dr. Sehat Sutardja, Marvel's Chairman and CEO; and Mr. George de Urioste, Marvel's Interim Chief Financial Officer. If you've not obtained a copy of our current press release, it can be found at our company website under the Investor Relations section at www.marvel.com. Additionally, this call is being recorded and will be available for replay from our corporate website. Before we begin, we would like to remind all participants that this call will include forward-looking statements that involve risk factors that could cause Marvel's results to differ materially or management's current expectations. These forward-looking statements may include projections, estimates, and other commentary regarding sales trends, revenue growth, gross margins, operating and non-operating expenses. Such statements are usually preceded by, but not limited to such words as expect, anticipate, belief, should, may, will, or other forward-looking statements. To fully understand the risks that may cause results to differ, please refer to Marvel's fiscal 2007 Form 10-K and subsequent SEC filings. Please be reminded that the company undertakes no obligations to revise or update publicly any forward-looking statement. Throughout the call today, we will be making reference to certain non-GAAP financial measures, which generally exclude the effect stock based compensation, amortization of acquired intangible assets and other one-time charges. Marvell management release these non-GAAP metrics are useful as they best reflect how the business is internally managed. While Marvell uses non-GAAP financial measures as a tool to enhance its understandings of certain aspects of the financial performance, Marvell does not consider these measures to be a substitute for or superior to the information provided by GAAP financial measures. We have posted a historical reconciliation of our GAAP to non-GAAP earnings for your reference on our corporate website. I would now like to turn the call over to Dr. Sutardja. Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: Thanks Jeff. Today we reported fiscal fourth quarter revenues of $844 million, up 11% sequentially from the $758 million reported in fiscal Q3. The gross level achieved substantially with our previous guidance for a 3% sequential increase in revenues. The better than anticipated results in the quarter was due to strong demand for our system-on-a-chip products for the storage market, better than anticipated demand for our enterprise-class communication products and better than seasonal demand for our cellular products. We are pleased with the top-line growth we experienced in Q4, and believe Marvell has turned to the corner on improved profitability as pro forma gross margins improved sequentially during the quarter. Additionally, the close of fiscal 2008 is significant milestone as the company achieved full year revenues of nearly $2.9 billion, representing a 29% year-on-year growth rate, and positions Marvell to continue to growth at greater than a $3 billion a year annual run rate. George will go into greater detail on the drivers of our business later in the call. But we believe the financial results demonstrate our successful investment in a broad range of technology initiatives and our ability to efficiently integrate these technologies into superior products across many markets. Now, I would like to address how investors should think about the potential growth rate over the longer-term and several key drivers about business, which should positively affect our business over the medium-term. From a longer-term view, Marvell is inherently a product cycle company, our overall cooperate growth rate accelerates to a greater or lesser degree as we enter periods of marked by new product adoption and transition. Our focus continues to be on markets with large unique opportunities, which are experiencing growth rates better than the overall electronics industries and which we believe can leverage our unique expertise in the areas of mixed signal design, complex IP integration required for large scale SOC designs, and proprietary DSP algorithms. In maintaining this focus, we believe we can deliver growth rate to shareholders in excess of the overall semiconductor industry. Even now the current product portfolio in our areas of long-term investment, this focus translates into a business that we believe can grow on a top-line basis in the range of the high teens to a low 20s on a year-on-year percentage basis. In years, where our product cycles align with a strong economic back drop, we should be able to hit the high end of this range. While in periods of the economic uncertainty with less than ideal products cycle fraction, we may trend to the lower-end of this range. It would characterize the current period some way in the middle of the range. We acknowledge the economic backdrop is uncertain especially in the United States, but we believe we have positive products cycle fraction across a variety of end markets, which we believe should help to mitigate to a certain degree some over the current economy uncertainty. Our current view over the medium term horizon is generally positive regardless of the economic back drop. We see several key drivers of growth in fiscal 2009 as follows: one, within the storage segment, the drivers of growth we see are robust ASP expansion within the enterprise hard drives market due to the transition of our SOC platforms from our discreet regional products. Additionally, we see clear market share shifts among the hard drive vendors, which are benefiting our core customer base. This is especially through in 2.5-inch mobile drive format, which continues to rapidly accelerate on a unit basis. As the unit crossover from the desktop to notebook PC accelerates, the inherent differentiations of our products become clear to our customers. This is primarily due to the lower power consumption and the increased storage potential of hard drives based on our interactive video signal processing technology. This last trend could potentially have long lasting positive impact on the growth of our storage revenues. Lastly, we see moderate industry wide HDD unit growth rates in the range of 10% year-on-year. They come together; we believe the sales of our storage products can grow at least at the upper end of our previously noted growth range. Now moving to wireless, within our wireless connectivity portfolio, we see our investments in both the embedded space and in the next-generation wireless standards as the clear drivers of growth this year. We see growth driven by accelerating tractions of our 802.11n products. As we have key design wins with Tier 1 market leaders in both the enterprise and retail access point markets, where we believe will began to accelerate into production during fiscal 2009. Additionally, we see positive tractions of our combo wireless devices for mobile and handheld devices, including our 11BGA Bluetooth and FM-chips, which are gaining positive acceptance by OEMs. Put out in the year, we are confident that we will be... we will experience design win momentum for our PC client focus 11n products, a market segment, where we were not significant players with our standalone 11 ABG products in the past. Lastly, we see a long runway of growth for our current base of wireless business in game consoles, digital cameras, and multifunction printers. Taking together, we believe the wireless segment can grow at least at the upper end of previously noted growth range. In the area of our cellular communication products; we see continued strong unit shipments for our application processors and communication processors. As we have noted previously, we feel fiscal 2009 as a design win year in term of focus and activities for our cellular tip. Consequently, the growth we anticipate is more in line with our key customers' growth rates coupled with new design win ramps in the later half of the fiscal 2009, offset by some reasonable ASP compression. I would like to highlight, contrary to some analysts comments, we do not see any appreciable share loss within the... our cellular handset business during the next 12 months, especially for our communication processors, targeting next-generation 3G handsets. More importantly, we believe we have new designs, which will begin to contribute to growth of the group as we move throughout the year. We would hope investors understand that we are constrained by confidentiality agreements that limit what we can say about new design wins within our customer base. In summary, we are pleased by the overall results delivered this quarter. We view the revenue trends during the quarter as positive. We see the end of our contractual obligations with Intel enabling us improve our profitability, and we are optimistic about the growth prospects facing Marvell as we head into fiscal 2009. Before turning the call over to George, we would like to thank all of our employees of Marvell for their dedication, focus, and hard work over the past 12 months. Without the tireless efforts of our entire company, none of the results presented today would be possible. Now, I would like to pass the call to George to provide the financial update and guidance before attending to your questions. George? George A. de Urioste - Interim Chief Financial Officer: Thank you Sehat, and good afternoon everyone. Today, we are pleased to announce fiscal fourth quarter 2008 revenue of $844 million, a record high revenue for the company, representing a 36% growth over revenue of $622 million for the same quarter in the prior fiscal year. Furthermore, our fourth quarter results were up strong 11% sequentially from the $758 million reported in our third quarter and were substantially above our Q4 guidance of $780 million. For the full fiscal year, Marvell reported record revenue of almost $2.9 billion, a 29% growth over revenue of $2.2 billion in the fiscal year of 2007. Looking at gross margin non-GAAP gross margin for the fourth quarter was 48.7% in line with our guidance and up 40 basis points from Q3 and up 50 basis points from Q4 of the prior year. Turning to operating expenses on a non-GAAP basis, expenses were $310 million, which includes $23 million of one time charges included in the one time charges is a $60 million accrual for an anticipated payment relating to the tentative settlement of a derivate securities suit, which awaits a required court approval. Additionally, operating expenses were impacted by a $7.2 million IRS payroll tax penalty related to stock option backdating. If we look at recurring operating expenses, it is important to note that they were less than anticipated, primarily due to two items: first, a lower than planned payroll tax associated with the tender offer of stock to correct mispriced employee options; and secondly, Marvell had better than anticipated follow-on savings associated with our previously announced reduction in force. Next, let's look at interest and other income. The results here increased to $18.9 million due to slightly better investment to returns and a one-time positive event attributable to the conclusion of our contractual obligation under the Intel supply agreement. As we have mentioned in previous investor discussions, at the time of the acquisition of the Intel Cellular hand held business, a liability balance was created to reflect our obligation to purchase a minimum supply of parts at a predetermined price from Intel. The original liability was determined by the difference between what was to be paid to Intel versus the open market fair market value of the parts. Towards the key variables in this calculation, our estimates for wafer yeilds and the associated product mix. Now, as we have contractual obligations of the Intel supply agreement, the remaining liability balance has been eliminated and recognized as other income. This remaining balance was attributed to actual production results in different from original estimates as it related to the product mix and wafer yield assumptions. Okay, please permit me to emphasis a key point. Liability is now zero. Costs to contractual obligations have been met. The release of the residual liability created a positive one-time benefit of $22 million. Next looking at our effective tax rate, a negative 3% rate for Q4 was primarily due to two components: first, the benefit of net operating losses occurred from the merger of several international subsidiaries; and secondly, the reversal of several international reserves as a result of favorable tax audits and the expiration of certain statute of limitations. On a full year basis, our effective tax rate was just over 2%. Please note, since the beginning of last year Marvell and other public companies have adopted FIN 48 that are known as the standard for accounting for uncertainty and income taxes. This standard requires us to compute a tax return for each quarter based upon the income and tax events occurring within the quarter. The impact is that if we complete a tax audit or a statute of limitation occurs within a quarter, these events must be accounted for in the quarter of the event occurred. The net effect is that our effective tax rate will vary to a greater degree than in past years. Next, let's look at non-GAAP net income for the fourth quarter. Our result was approximately $123 million or $0.20 per diluted share compared to $86 million or $0.14 per diluted share during our fiscal third quarter. Shares used to compute non-GAAP net income were $627 million, down from $631 million shares in the prior quarter. The lower number of shares were due to a lower than anticipated share price when using the treasury method of computing diluted share account. Now I would like to offer some insights to revenue during the quarter. Our performance clearly came in better than we had anticipated in most areas. Order of linearity during the fiscal fourth quarter was balanced and improved both sequentially and on a year-over-year basis. Several product areas have strong growth trends both sequentially and on a year-over-year basis, revenue associated with the sale of our storage products grew over 20% sequentially, and grew over 30% on a year-over-year basis. This performance was due to accelerating industry wide demand for 2.5-inch hard drives for the mobile products. In addition to strong seasonal unit growth of 3.5 inch hard drives for both desktop PCs and consumer PVR products. Furthermore, within the mobile hard drive business, Marvell experienced a 39% sequential increase in unit shipments as ships in market share among major players in the hard drive industry had a direct positive benefit to our major customers. Nearly all of our major hard drive customers experienced double digit sequential growth on a revenue basis with Western Digital being the only customer exceeding 10% of our revenue during quarter. Sales of our cellular products were better than planned as demand for application processors accelerated in excess of seasonal demands. Sales of our communication processors were healthy on a unit basis, but we did experience some ASP compression during the quarter. Sales of our enterprise connectivity products grew sequentially in the high 20% range on a revenue basis due to strong demand for system controllers and Ethernet PHYs. Additionally, sales of our PC connected products accelerated roughly 20% sequentially as we benefited from strong unit demand within the PC industry, especially for mobile platforms. Balancing the positive product demand trends just noted, sales of our wireless connectivity products being less than anticipated. We have originally guided sales of our wireless products to be flat sequentially after a strong fiscal third quarter. However, demand from our game console and certain consumer wireless customers, was worse than we had anticipated. We view the down check in demand is temporary as we have many new designs for both existing and newly announced products, targeting both the access point, and the client side of the wireless market. Our design wins or expected to ramp into production beginning in the second fiscal quarter of 2009, and be a key source of growth later in the fiscal year. Lastly, sales of our printer products were relatively flat on a sequential basis during the quarter. Now turning to the balance sheet; cash in short-term investments were $631 million, up roughly $100 million sequentially primarily due to better total sales. Accounts receivable were $332 million, down $55 million sequentially, highlighting better collections and strong order linearity. Days sales outstanding for DSOs were 35 down sequentially 46 days reported in the fiscal third quarter, and lower on a year-over-year basis from the 48 days reported in the forth quarter of fiscal year 2007. Inventories at the end of the quarter were roughly $420 million, up $38 million sequentially. The increase in inventory was due to final receipt of wafers under our now completed Intel supply agreement, continued strong demand for storage products, and new product ramps of wireless products. Days of inventory or DIO were 86 days, roughly flat sequentially and equates to an inventory turns of roughly four times in line with historic norms. On a year-to-year basis DIO was up due to accelerating inventory purchases high to our contractual obligations under the Intel supply agreement, again which have now been completed. Accounts payable were $231 million, up roughly $22 million sequentially. In terms of cash flow Marvel, generated $163 million in cash from operations and used roughly $32 million for capital expenses getting a free cash flow from operations of approximately $131 million. This is a significant improvement on a sequential and year-on-year basis as we netted $8 million in free cash flow during the fiscal third quarter and were cash flow negative in the year ago period. We would now like to provide guidance for our anticipated performance in the fiscal first quarter of 2009. Please note, we will not be providing full year guidance on today's call, and cannot provide any additional commentary on our full year expectations. We would like to highlight that our guidance today is a result of bottom-up analysis of market demands and actual sales trends in conjunction with ongoing dialog with our customers about their expectations. This is balanced against the awareness of the current uncertain economic backdrop, especially within the United States, how this might unexpectedly influence our customers demand patterns within short periods of time. With that perspective as a background, it should be noted that Q1 is organically a seasonally weaker quarter. We anticipate revenues in a range of $775 million to $785 million, which represents a growth rate of 22% to 24% over the same quarter of the prior year. Now, to help you calibrate our anticipated revenue, we would like to share with you our backlog coverage ratio. Such ratio is determined by our 90-day backlog entering the beginning of the fiscal first quarter divided by midpoint of our revenue guidance. This ratio is approximately 70%, and is inline with historical patterns and takes seasonality into consideration. With regards to profit, we anticipate non-GAAP gross margins in a range of 48.7% to 49.3% ranging from flat to up 60 basis points over the prior quarter. Now, turning to operating expenses, we anticipate non-GAAP operating expenses in the range of $290 million to $295 million, slightly higher than anticipated operating expense guidance is due to a variety of factors including increased tape-outs of 65-nanometer products. Expectations of seasonality... excuse me, expectations of seasonally elevated payroll taxes increased costs due to weakened exchange rate of the U.S. dollar, and the required annual retirement benefit accruals for some of our international staff. In terms of our tax rate, we anticipate the effective tax rate to range between 8% to 10%. Lastly, diluted share count will approximate 633 million shares. At this time, we would like to invite your questions, and request the operator to open the process. Question And Answer

: [Operator Instructions]. Your first question comes from the line of Allan Mishan with Oppenheimer. Please proceed with your question. Allan Mishan - Oppenheimer & Co.: Hey, guys nice job. Can you give us a sense for when you will be recognizing revenue from 3G base bands? Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: Yes,Allan. Our expectation will be sometimes this year. We do have the early generation 3G base band on the standalone basis, but in terms of the integrated base band plus application processor will be sometimes this year. Allan Mishan - Oppenheimer & Co.: Can you say first half or second half? George A. de Urioste - Interim Chief Financial Officer: Probably later in the year. Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: Yes, to be on the safe side, I will say toward the second half, again to be on the safe side. Allan Mishan - Oppenheimer & Co.: Okay, great. And then on the enterprise SOC, how many customers will be shipping enterprise SOCs from you this year; is it one customer or more than one? Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: For this year it will be one; for this year. Allan Mishan - Oppenheimer & Co.: Okay, great. And then last question from me; you talked about traction on the WiFi plus Bluetooth; do you have firm design wins for this product just yet? Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: We haveseveral engagements, and we have... in various different stages. Allan Mishan - Oppenheimer & Co.: Is that something that could ship this year? Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: Pick it up, I will say second half. Allan Mishan - Oppenheimer & Co.: Great. Thanks very much guys.

Your nextquestion comes from the line of Uche Orji with UBS. Please proceed with your question. Uche Orji - UBS: Thank you very much. Two questions; first is how much of TSMCs can you... you will be expecting as a ratio of your whole... exiting 2009? Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: Orji, are you... I didn't catch the questions; was that... Uche Orji - UBS: If I look at the how much of the ESCO [ph] products that you've been shipping coming from TSMC, what will be the percentage really in 2009? Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: I would say, if I understood correctly, only about 70%. And the most of our communication processors will be sourced from TSMC while as you know, we do have our application processor inventory that we do have to burn half of them in the next four to six quarters. Uche Orji - UBS: Okay, that's good. Just look at very quickly on interest expense if I may just look at that quickly. If I look at your debt levels, is there any benefit for your company to carry that level of debt given what's happening? Is there any plan to use the cash you generated to like... bid on the debt and how should we be remodeling interest expense for next quarter for the rest of year? Can you just give us some guidance on that? George A. de Urioste - Interim Chief Financial Officer: Orji, thank you for asking that question. One of the key components of our debt is that there is a variable rate interest expense. And so it has been resetting to the lower rates as interest rates have trended down in the marketplace. And we periodically evaluate the potentiality of reducing that debt vis-à-vis other operating opportunities and growth investment opportunities. So... currently, because we are also benefiting from the trend of lower interest rates, we believe we have some flexibility in choosing the best use of our cash in the near-term. Uche Orji - UBS: And then just finally on that inventory side if I may. Could you clarify how much of the inventory we have now worth... can you speak up, it's in work in progress by the time you finish just for us, very expensive of what the components are for the inventory at least? [ph] Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: Did you get that question? George A. de Urioste - Interim Chief Financial Officer: Yes, I think so. Uche, if I understand, you'd like to understand what percentage of our total inventory is... [Multiple Speakers] Uche Orji - UBS: Yes, that is the correct, yes. George A. de Urioste - Interim Chief Financial Officer: Okay,it's somewhere in the range between 25% and 40% of our total inventory. Uche Orji - UBS: Okay, that's great. Thank you very much. George A. de Urioste - Interim Chief Financial Officer: Uche, just on a quick note, that is also down sequentially.

Your next question comes from the line of James Schneider with Goldman Sachs. Please proceed with your question. James Schneider - Goldman Sachs: Hi. Thanks very much. I guess first one is, can you talk about your order patterns from customers that you've seen so far this quarter and any strength or weakness from few different customer sets? George A. de Urioste - Interim Chief Financial Officer: Yes,I will take that one, Jim. At this point, as we mentioned in the prepared remarks, order linearity actually has gotten quite good on a year-over-year basis and a sequential basis, and continues to be that way into the first fiscal quarter. James Schneider - Goldman Sachs: And any strength or weakness relative to the storage or wireless end markets? George A. de Urioste - Interim Chief Financial Officer: No, in terms of the end markets, I would say that the... our disc drive market continues to be very strong based on what we see as share shifts going on in the end market. James Schneider - Goldman Sachs: Okay. And then next one would be can you comment on the progress towards your 50% gross margin target for the second half of this year? Are you still on tracks for that? Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: Yes, we are. James Schneider - Goldman Sachs: Okay, great. And then could you just give me a little more granularity on the strength you noted in enterprise communications and whether you think that's going to be sustained through this quarter as well? Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: Yes, in terms of enterprise, we continue... I guess you noticed that we didn't talk too much about the specific new product developments. But I can stress it to you that we continued to invest in developing events communications enterprise products. So, at last quarter, we talked about, I think the press release of design wins, so that would... we will hope over the next year to continue to translate into revenue increases in those markets. And we also continue to adopt our high-end application processor... I mean microprocessors to be embedded into some of those products that also would help our future growth in that segment. George A. de Urioste - Interim Chief Financial Officer: And I could add to also, Sehat, if you look at how the Ethernet products, enterprise specifically are going to contribute to our Q1 guidance, it's inline with the sequential guidance numbers, Jim. James Schneider - Goldman Sachs: Okay, great. Thanks very much. George A. de Urioste - Interim Chief Financial Officer: You're welcome, thank you. Next caller?

Your next question comes from the line of Srini Pajjuri with Merrill Lynch. Please proceed with your question. Srini Pajjuri - Merrill Lynch: Thank you. George, just a clarification, what was the non-operating line guidance for Q1? George A. de Urioste - Interim Chief Financial Officer: In terms of the interest income or... ? Srini Pajjuri - Merrill Lynch: Yes, expense or income. George A. de Urioste - Interim Chief Financial Officer: We didn't break it out at that level, but I would say that's the trend of the third quarter, the third quarter data point is representative. So we would expect a low level negative number similar to the third... Srini Pajjuri - Merrill Lynch: Okay, got it, thank you. And then on the OpEx, obviously it's going up a little bit and it looks like you have settled some of the back dating law suites. I believe you had some legal expenses in the OpEx. So, I am just wondering as you look out for the next couple of quarters, do you still got a positive benefit from the legal expenses coming down or is it mostly behind it? George A. de Urioste - Interim Chief Financial Officer: Generally speaking, that is correct. The trend is declining legal expense. There will be some aberrations in terms of potential finding of future settlements with regards to legal operating expenses; they are declining. Srini Pajjuri - Merrill Lynch: Okay, but the overall OpEx, how should we think about it? Is it going to grow as we look into the next few quarters or it's going to stay at this level? George A. de Urioste - Interim Chief Financial Officer: Certainly, OpEx guidance on this quarter's intentionality and you are aware that company has a reduction of course in the first and the last quarter, so the long-term goal is to keep operating expenses close to a low level and then flat. Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: We committed in the last quarter pretty flat and in this quarter basically is to follow-up of our commitment. [ph] Srini Pajjuri - Merrill Lynch: Okay, so 295 is the level that you want to maintain it, right? Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: I would think you... [ph] Srini Pajjuri - Merrill Lynch: Okay, got it, got it, great. And Sehat, you know, you have talked about different businesses and the growth rate, the potential growth rate. I am just wondering as we look into your new product, I mean you have a lot of them. And for 2008, which ones do you think will begin to contribute and which ones you are less certain about? Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: Well, if you look at storage, we continue to invest... I believe in balancing new technology... [Technical Difficulty] And then in the next generations, our applications continue to strengthening the application processors. That might have led more of the second half of the year. Srini Pajjuri - Merrill Lynch: Okay, and then final question, Sehat, as you move from EDGE on 2G to 3G, HSDPA, should we expect some ASP boost here, or do you think ASPs are going to be relatively flattish? Thank you. Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: Certainly, the 3G is going to be higher prices than the actual devices, but that... on the other hand, we have to balance against the transition how fast the 3G will go to replace the EDGE. As well as at the same time, it depends on our customers continue market share gain in the EDGE. After all, EDGE is still the predominance of solution in many countries. So, it's very hard for us to predict at this point, when that transition will occur, but my guess is the EDGE will continue... our customers will continue to deliver our EDGE solutions as well as deploying our 3G solutions simultaneously. Srini Pajjuri - Merrill Lynch: Thank you.

Your next question comes from the line of Shawn Webster with JPMorgan. Please proceed with your question. Shawn Webster - JPMorgan: Yes, thank you for taking my question, and also thank you for the clarity on the guidance. Can you talk about the leap times for your storage ship business; obviously you saw pretty good growth there. Are things getting tightened out there or lead times coming in, going out? George A. de Urioste - Interim Chief Financial Officer: In terms of lead times to our customers or lead times in terms of our supplier, Shawn? Shawn Webster - JPMorgan: The time that takes for you to fulfill our customer order? George A. de Urioste - Interim Chief Financial Officer: We are not seeing any impact to fulfillment time to our customers at this point. Shawn Webster - JPMorgan: Okay, so no changes there. How is the pricing environment for storage right now? George A. de Urioste - Interim Chief Financial Officer: Very good, we continue to be share gainers in that space, but we are not seeing any ASP pressure at this time. Shawn Webster - JPMorgan: Okay. And then can you either in terms of ranking it or maybe relative to your mid-point of your guidance? Can you tell us which of your key segments storage Ethernet, WiFi, your XScale business will grow relatively faster or slower than that for Q1? George A. de Urioste - Interim Chief Financial Officer: Into that Q1? Shawn Webster - JPMorgan: Yes. George A. de Urioste - Interim Chief Financial Officer: Yes, Shawn. I believe if you were to look at our different segments drives you definitely strong versus this period of time. We think we are going through an unusual time in the market. Our main customers are gaining share from our... not customer, sort of speak, so we feel that's going to be a real strength that normally into the first quarter. We believe the rest of the segments will tend to track the sequential guidance. But to look from a rank ordering perspective after drives probably got some decent Ethernet enterprise and also client growth going on; and than after that, it's all pretty evenly dispersed. Shawn Webster - JPMorgan: Okay. And then if I could drill down into the XScale business at the moment, can you talk about the supply agreement? I think as you left your October quarter, you had something like $125 million of wafers, you still have the purchase. By you telling us the agreements over; does that that mean you bottle those in the quarter or you also would be agreement in some way or can you extent on that a little bit? George A. de Urioste - Interim Chief Financial Officer: Shawn, the straight answer to it is we have satisfied that purchase obligation, and we have completed the requirement of all the purchases of the inventory necessary under that agreement. We are now contractually done with the agreements in terms of the purchase obligations. Shawn Webster - JPMorgan: Okay. And then as it relates to your XScale business, can you tell us at all or give us some kind of clue, you used to talk about the gross margins for the segment, can you may be give us an update on where they are now and how you expect them to evolve this year as you move more of your shipments from TSM into your mix? George A. de Urioste - Interim Chief Financial Officer: Yes, sure historically we've never broken our gross margins by our different segments and I think as we did the acquisitions, the Cellular Group, we tried to provide a little bit more transparency but, occasionally, wasn't always clear. On a go forward basis, we are not going to be breaking gross margins out by different product line. Shawn Webster - JPMorgan: Yes. Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: Well, if I can maybe just give you... as we've said in the previous quarter, there are several phases during the transition from... transitioning from Intel to the foundry, using exactly the same clone process. It will obviously help the gross margin. But, the real help will be, put it down the road when we completed the transitions, where we design things from the ground up in more advanced process technology at the foundry. So, those are the Phase III. So, we are done with Phase I, we are done with Phase II so, we are close to finishing up the Phase III in terms of the R&Ds and then and usually you are not very much in this business, it takes some times for the new products to go into productions at the customers. Shawn Webster - JPMorgan: Okay, thank you for that. And maybe just... Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: You don't know what is happening. Shawn Webster - JPMorgan: Yes. Maybe just one last question and you mentioned some pricing pressure I think on the communication processor side of that. Can you expand on that a little bit for us? George A. de Urioste - Interim Chief Financial Officer: Yes, Shawn. It wasn't anymore than abnormal than normal marketplace, not going to really put a percentage to it. Offset by there was a bit of all set by there was a bit of elasticity there also. So, we felt ASP compression to the down side, but we also are seeing some unit upside. Shawn Webster - JPMorgan: Okay, thank you very much. George A. de Urioste - Interim Chief Financial Officer: You're welcome. Thanks, Shawn.

You next question comes from line of Craig Ellis with Citi. Please proceed with your question. Craig Ellis - Citigroup: Thank you and good afternoon guys. First, just a clarification on the enterprise storage business; can you provide a little bit more color on how the mix breaks out between the re-channel component shipments and SOC? When will you be shipping 80% to 90% or more SOC? George A. de Urioste - Interim Chief Financial Officer: Yes, Craig. I think you can feel confident that we will be shipping greater than the majority of SOCs into the second half of this fiscal year. So, yes, you are right, there will be a tailing off of the discrete re-channel and an acceleration of the SOC, so it is kind of mid-year-ish type of crossover points. Craig Ellis - Citigroup: Okay, so you got the benefit of that steadily through the years, the other way to look at it, George? George A. de Urioste - Interim Chief Financial Officer: That's good way of thinking about it, yes Craig. Craig Ellis - Citigroup: Okay. And then, this next question is probably for Sehat. Sehat, when you look at the communications processor business and just the handset business in general, can you talk about how happy you are either qualitatively or quantitatively at the operating line with that business' profitability and if you are not satisfied with current profitability, when do you think you'll be at a point where that business for you will be at a satisfactory level? Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: Sure, Craig. Obviously as we mentioned over the last one year that when we... when we purchased this business we knew from the get go that we are going to face challenges in terms of the profitability getting to this business, not because the business is not a good business. This is a lucrative business if the business is done right, but when we enter this business, we were... we were faced, we were handed a business where there a certain things they are not optimal such as I have mentioned this earlier. 8-inch fab versus 12-inch fabs, such as lower yield of proprietary processes, so a few number of things that we mentioned earlier and if you look at just from the financial point of view, of course no body can be happy with about the financial performance during the time... during that time I think during the last few year, when we have made a little thing that they would do to change the financial performance of that business. But, I am glad that now we have finished the phase I transitions, I am glad that we finished the phase II transition where we basically are using the same design moving to TSMC 65 nanometer process. So, that will help the next like the end of this year or for sure next year's gross margins and also improve performance at the same time. And then once we finish the phase III then I will be really happy. So, I think we... I should characterize this as work in progress so, there are lot of work that we needed to do and everybody in the Group understand that the prospect... the future prospect for this business is actually is very good, we just have to execute it. Craig Ellis - Citigroup: Can you say when you would expect the business to be better than breakeven on the operating line Sehat? Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: I won't be able to say it at this point okay, I think sometimes hopefully by next quarter we can clear the picture. But I can say, it is going to be improving such as just to get precisely the time, if it really at the end of the day, depends on the volume as well. So getting better understanding about our customer's ramp up, I mean volume increase schedules would be important data point for us to make that projections. Craig Ellis - Citigroup: Thanks for the color there.

Your next question comes from the line of Craig Berger with FBR. Please proceed with your question. Craig Berger - FBR Capital Markets: Good Afternoon guys. Thanks for taking my question and congrats on the strong numbers. Can you update us where you are with your GPS efforts, whether you plan on pursuing standalone solutions or just embedding it in cell phone solutions and any other color there you can provide? Thanks. Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: Yes. We got this call Craig, I guess we got this questions over the last several... I think last really or the last quarter or two. So, there were very little that we could talk about it except this in a time till we mentioned that we were looking into it because we know that at some point in the near future or maybe in the next year or two that the GPS functionality will be needed, in a lot of these applications. But at the same time, we also realized that all these things are subject to the cost... the increase of cost structure of adding GPS functionality to let's say to your low end cell phones. If the increase of cost is significant, then there will be huge delay in terms of the adoptions of GPS that in the mainstream phone. But if the increase of cost is minimal then the adoption could be more rapid. So we look into this issue very, very seriously over the last year or so, and we came to conclusion that okay, the only way for us to really benefits of adding GPS functionality into our platform is to focus on rapid cost reduction. So the only thing I can tell you right now is we're right now focusing in developing technology that will achieve their target meaning adding incrementally minimal, absolutely the minimal cost to the platform to see large adoption of this technology into the mainstream products such as like cell phone. Craig Berger - FBR Capital Markets: So, When do you think that might drive revenues? George A. de Urioste - Interim Chief Financial Officer: Craig,do you have a follow up? Craig Berger - FBR Capital Markets: Yes, when you think that might drive revenues Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: Let's say next year. Craig Berger - FBR Capital Markets: Next year, so going back to the cellular gross margins, not to beat the dead horse here, but is it basically that you guys are kind of in the low 30s now and you think that can trend up a little bit over the course of the year, but its not really until next year, when you're in a 65 nanometer design hit that you'll see a larger increase or improvement in those margin? Is that the right way to think about that? George A. de Urioste - Interim Chief Financial Officer: You know Craig, you cut off a little bit, yes, I think I've got to adjust to your question. If you are asking is it there going to be a step function of the gross margins relative to the cellular group and the answer is no, it's incremental. Each quarter we'll get a little bit better improvement from that business on a standalone basis. We won't be happy to tell that business is a not diluted into our gross margins on the corporate level. Craig Berger - FBR Capital Markets: And then can I just ask one last housekeeping question? I know you beat your revenue guidance by over 8%, is there some threshold either above or below guidance of which you'd update the financial community or it's just or no? Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: No. okay no. I want to, I believe the bit on the GPS, since you asked for GPS earlier, technology demonstrations in the GPS to you know, some early customers. Craig Berger - FBR Capital Markets: Okay. Thanks a lot.

Your next question comes from the line of Adam Benjamin with Jefferies & Company. Please proceed with your question. Adam Benjamin - Jefferies & Company: Yes. Thanks, guys. A couple of questions on the storage side, you saw some really good growth in the January quarter, obviously you had some share gains there that was helping you, as you look out, you know into your guidance and you did bottoms of analysis as you indicated, how comfortably are you with inventory in the channel and what you are seeing out there? George A. de Urioste - Interim Chief Financial Officer: Yes, I'll take that one sure. So at this point, we were feeling pretty good about it, I mean, I am not hearing any commentary for the business unit about any inventory issues out in the channel, you know, we've got a pretty advanced supply chain model to the different ATV suppliers, so we we're not hearing of excess inventories, either finished goods or our overall components sitting down in the supply chain. Adam Benjamin - Jefferies & Company: Okay. Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: I think, It's also important to note that the supply chains between us to the... our customers are very sophisticated in this business. It's a very mature business to us. So it's, the customers will not intentionally over build products. Adam Benjamin - Jefferies & Company: Right. George A. de Urioste - Interim Chief Financial Officer: I would just add to that that we do by manner of mechanics and the interactive processes. We do receive formal weekly updates from the customers and the supply chain, and then in addition to that, there is ongoing dialog that happens in addition to the formal weekly update. Adam Benjamin - Jefferies & Company: Okay, I mean, the reason was that is, you know, there has been some concern out there just from some folks industry side with respect to June, how things could shape up and so I just wondering how you guys, I know you only give guidance out to the April quarter, but if you have any concerns as you look out a quarter beyond? Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: No that we're going so share on the call today by June, sorry Adam. Adam Benjamin - Jefferies & Company: Okay. Just a clarification on the enterprise side with the respect to SOC, I think, Sehat had mentioned that you'll be shipping to one customer, the SOC, and then Jeff, I think you said that by midway through the year you will represent greater than 50% of your mix, is that the one specific customer or is that the total for the enterprise segment? Jeff Palmer - Investor Relations: For that one particular customer. That one particular customer as you really well know Adam is the dominant player in that part of the business, so... Adam Benjamin - Jefferies & Company: Got you, I was just trying to clarify that, that's helpful, thanks. Jeff Palmer - Investor Relations: The customer that have as your lead dog, if you will on the SOC. Adam Benjamin - Jefferies & Company: Got you. And then one last question on the cellular side, you mentioned that there were some ASPs issues, as you move to TSMC with that ship being largely complete. How should we be thinking about ASPs, I know you talked on the last call about there being any change there about re-qualifying some of the carriers with you lead customer there? Should we be looking at any significant change to ASPs on that front including the fact we get some benefit as you move through 3G? George A. de Urioste - Interim Chief Financial Officer: No, no. As you can imagine, we definitely, as Sehat mentioned earlier, our cost model improved incrementally as we went from the Intel side to GSM side. We did feel a little bit of a, well let's call it one-time ASP pressure, but we think on a go forward basis the right size from a cost perspective ASP perspective that is and we do pretty well going forward. Adam Benjamin - Jefferies & Company: So going forward, can you think any about just normal sequential ASP declines of most semiconductor companies are baseband suppliers. George A. de Urioste - Interim Chief Financial Officer: Most application, more complex application communication process companies I think baseband might be a little bit more of a commodities that the product we sell. Adam Benjamin - Jefferies & Company: All right, that's helpful. Thanks, guys. George A. de Urioste - Interim Chief Financial Officer: If we got time for one more call right Anton.

Your final question comes from the line of Arnab Chanda with Deutsche Bank. Please proceed with your question. Arnab Chanda - Deutsche Bank: Thanks. Just quick a couple questions, either for Jeff, or George, or Sehat. If you look at gross margin guidance, was there any benefit on mix or is it or all on, all the benefit that you are seeing from the TSMC transition? George A. de Urioste - Interim Chief Financial Officer: Yes, it in terms of all of the benefit beyond mix, versus any thing from the TSMC transition. Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: Do you mean that's on a sequential basis, or Arnab what was the cost of the improved gross margins sequentially is that what your question is? Arnab Chanda - Deutsche Bank: Yes, your gross margin is going up from Q4 to Q1 and storage is doing better which should have better gross margins. I am just trying to understand how much of it is because of mix, and how much is because your transaction to TSMC? Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: Well I think it across the board we either, we have been more focused in let's say like the improving deal across the board, a lot of our operations are putting extra efforts that our engineers putting extra efforts why our yield is not as good as, let say as the defect down should be limit, so we spend more time in looking into those, and also the, also when we... okay, some of the newer products okay, that over the longer term. Some of the products that the new product definition say we look into we are now more focus on not implementing all the bells and whistles that some people needs, just some people needs were just focus on make sure that, that the features that we implementing the right future steps, so that we don't have bloated designs, testing... improving testing times. So they're in the short terms that they have incremental things that we have done and a long term let say there are a few more things that we could do. George A. de Urioste - Interim Chief Financial Officer: I would just add to that, that our internal process has evolved where we now have a heightened sensitivity for the review process of the determining any business just a vacation surround the any incremental cost particularly mote worthy in the last month and a half that I have been here I've seen the higher degree of awareness, and the greater business man like sensitivity to make sure that there is either strong justifications or not going to spend the incremental costs. Arnab Chanda - Deutsche Bank: Profits are good. Couple other ones Sehat you said your Phase III plan of moving around design and then eventually that production for your business. Should we expect that in calendar '08 or calendar '09? Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: '09. Arnab Chanda - Deutsche Bank: Okay, great. And then couple other ones question on Ethernet side it seems like your main customer Intel is on PC side gaining share versus their competitor, is that going to be a benefit for you this year or is it getting offset wise, please? Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: That's actually in our number or not that, that we do get some benefit from that. Arnab Chanda - Deutsche Bank: Okay. And then one last question Sehat, you didn't talk much of your video effort you talk in the past your optical storage as well as some of the other things you're doing on video could you update us on that, when the PC any potential on this calendar year? Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: Sure, I think we are... we would, you saw that demo at this, I don't know if you have seen the demo at the CES, so I can tell you that we have good progress and we hope that in the next quarter I... we can talk more about it. Arnab Chanda - Deutsche Bank: Okay. Thank you very much. Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: Thanks, Arnab. Jeff Palmer - Investor Relations: I think that's all the time we have everyone, just in closing we'd like to thank you for your time today, and in summary we are very pleased with the quarter we delivered today, and we believe we've turned the corner on profitability, and we are going to attempt to improve our profitability as we move forward. We look forward speaking to you at our next conference call. Thank you very much. Dr. Sehat Sutardja - Chairman, President and Chief Executive Officer: Thank you. George A. de Urioste - Interim Chief Financial Officer: Thank you.