Tait Sorensen - Group Vice President, Investor Relations. Carlo Bozotti - President & CEO Carlo Ferro - Chief Financial Officer, Executive Vice President Finance, Legal, Infrastructure and Services Jean-Marc Chery - Chief Operating Officer Georges Penalver - Chief Strategy Officer, Executive Vice President Strategy, Communication, Human Resources and Quality Carmelo Papa - General Manager, Industrial & Power Discrete Group.

Sandeep Deshpande - JP Morgan Gareth Jenkins - UBS François Meunier - Morgan Stanley. Andrew Gardiner - Barclays Amit Harchandani - Citigroup Adithya Metuku - Bank of America/ Merrill Lynch Stéphane Houri - Natixis Günther Hollfelder - Baader Bank Dan Gardiner - Arete Achal Sultania - Credit Suisse Gianmarco Bonacina - Equita Johannes Schaller - Deutsche Bank

Ladies and gentlemen, good morning. Welcome to the STMicroelectronics Fourth Quarter and Full-Year 2014 Earnings Results Conference Call and Live Webcast. I am Myra, the Chorus Call operator. I would like to remind that all participants would be in listen-only mode and the conference is being recorded. After the presentation, there will be a Q&A session. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Tait Sorensen, Group Vice President, Investor Relations. Please go ahead, sir.

Thank you, everyone, for joining our fourth quarter and full-year 2014 financial results conference call. Hosting the call today is Carlo Bozotti, ST's President and Chief Executive Officer. Joining Carlo on the call today are Jean-Marc Chery, Chief Operating Officer; Carlo Ferro, Chief Financial Officer; and Georges Penalver, Chief Strategy Officer. The live webcast and presentation materials can be accessed through ST's website. A replay will be available shortly after the conclusion of this call. This call will include forward-looking statements that involve risk factors that could cause ST's results to differ materially from management's expectations and plans. We encourage you to review the Safe Harbor statement contained in the press release that was issued with the results this morning, and also in ST's most recent regulatory filings for a full description of these risk factors. Also to ensure all participants have an opportunity to ask questions during the Q&A session, please limit yourself to one question and a brief follow-up. And now, I'd like to turn the call over to Carlo Bozotti, ST's President and CEO. Carlo?

Thank you, Tait. Good morning, everybody, and thank you for joining us, and for your interest in ST. Today, I will begin with a summary overview, and then Carlo Ferro will review our financial results in detail. I will then turn to a discussion of our two product segments with Jean-Marc Chery, reviewing our Embedded Processing Solutions segment, and Georges Penalver, discussing our Sense & Power and Automotive segment. Finally, I will conclude with our 2015 goals. So let's begin. In December of 2012, we outlined a new strategic plan for ST based on our aim of being an undisputed leader in Sense & Power and Automotive products and in Embedded Processing Solutions, through a more focused and market-driven portfolio. And it was about moving ST to sustainable profitability, with a solid mid-term financial model. During 2013, our first year of execution, the focus was on making a major transition. The wind-down of ST-Ericsson on-time and better than budget, and the resizing of our operating expense base. We well achieved both these objectives. 2014 was the second year of our new strategy implementation. Overall, I believe it has been a year, where ST has made significant steps forward along three main axis: product and technology leadership; customer expansion; and operational and financial performance. Let's go through them one by one. Product leadership is about ST focusing on the five areas we see as the most promising: Analog, MEMS and Sensors; Automotive; Power and Smart Power; Microcontrollers; and Digital Consumer and ASICs products. We have worked hard to refocus our product portfolio deemphasizing certain areas and redeploying our resources. As a result, we have become a much stronger company in terms of innovation and in-time to market. New flagship products in 2014 included among many others: our 32-bit microcontrollers for general purpose and automotive applications; MEMS microphones and motion MEMS; touch-screen controllers; ultra-high-definition products for set-top box and low-voltage power MOSFETs and IGBTs. We are excited about the opportunities these products bring, and I will ask my colleagues to discuss them in greater detail shortly. Our product leadership is built on a unique, strong foundation of proprietary and differentiated leading edge technologies. First, with our FD-SOI, we have developed technology that makes the benefits expected of next generation CMOS technology available faster, with low power consumption and at lower cost. This is a value proposition that resonates with many of our customers and has resulted in a broad design win pipeline for ST. Second, our BiCMOS and RF-SOI technologies allow us to develop solutions for high-frequency applications, such as in automotive radar, optical communications, wireless base stations and cellular phones. Third, our embedded Flash technology, with outstanding low-power characteristics is state-of-the-art and one of the reasons for the continuing success of our 32-bit general purpose, secure and automotive microcontrollers. Fourth, our MEMS technology and manufacturing mastery enable us to develop a very successful motion MEMS business. Now our efforts are focused on leveraging this know-how into additional MEMS areas, such as microphones and pressure sensors, where we have had recent successes with major OEMs. And last, but not the least, our smart power technology is second to none. Our BCD technology, we are now on the ninth generation, continues to be a key differentiator in our power, industrial and automotive businesses. Moreover, we have a number of other technologies, such as Vertical Integrated Power, Silicon Carbide, Power MOSFET, IGBT and Intelligent Power Modules that are at the core of our power product and application strategy. Turning now to customer expansion, in terms of diversification, the progress is evident. Our mass market initiatives have been very successful. Here we increased the share of distribution to 32% of revenues exiting 2014, versus 27% one-year ago. In fact, our design wins to distribution increased 50% year-over-year and this is a very positive indicator. Clearly, our microcontrollers, automotive products, industrial, power and discrete products were major contributors to this success. And there are a number of opportunities to drive a larger part of our portfolio to many more customers. For example, many of our products contribute to enabling the internet-of-things. Turning to our major OEM customers, we were very pleased with the solid performance in the automotive, clearly visible with APG growing 8.3% in 2014, thanks to our innovative products. On the other hand, 2014 remained a year of transition with respect to some of our consumer and smartphone customers. Here we anticipate the turnaround to come this year, thanks to the new products and functionalities we introduced to them during 2014. So let me turn now to our financial performance. In 2014, ST made solid progress on key performance and financial metrics. Despite lower revenues, we achieved a significant turnaround year-over-year with operating income improving by $633 million, net income improving by $628 million and free cash flow improving by $376 million. With respect to our mid-term financial model, we improved our gross margin and operating margins. Moreover, we reached our operating expense model more rapidly than expected. We also strengthened our balance sheet with the issuance of a $1 billion convertible bond. So overall, it was a year of sound operational and financial execution, while maintaining our financial flexibility. However, we are not where we want to be yet. It is therefore urgent to make another step forward in 2015, and we will. I will now hand the call over to Carlo Ferro, to go more in detail on our financial performance. Carlo?

Good morning, everyone. Thank you, Carlo. As mentioned, ST's financial performance throughout the year 2014 was solid. We made real progress, despite softer-than-expected revenue progression, and we met our financial outlook in each quarter of 2014. In addition, we began to generate a positive net income starting from the second quarter, and a positive free cash flow starting from the third quarter of 2014. So 2014 was a year of progress: Our net income had a significant positive swing, moving from a net loss of $500 million to a net income of $128 million. To be fair, we received $96 million pre-tax in R&D grants related to the prior year, but the swing is still quite remarkable. Our free cash flow increased to positive $197 million from negative $179 million. Our operating margin before restructuring and impairment improved to 4% and 3.2% in the third and fourth quarters of 2014 respectively, from negative in 2013. We will now accelerate our efforts to increase revenue growth in 2015, and to move ST closer to the trajectory we wanted to be on, at or above $2 billion revenues per quarter. The good news is that, despite lower revenues, we made improvements across the board in all the other key financial metrics during 2014. Looking at our product portfolio, our three largest groups; Automotive, Industrial & Power Discrete and Microcontrollers, Memory and Secure Microcontrollers MMS, represent 70% of our revenues and serve applications that are currently enjoying the largest growth in the industry. In addition, they are delivering profitability margins well above the ST consolidated average. Our fourth group; Analog, MEMS and Sensors at 15% of revenues, experienced a year of transition in 2014, pressuring the profitability. We are confident about the prospects of this business as you will hear later on in our Sense & Power and Automotive review. Our fifth group is the new Digital Product Group, which is a combination of DCG and IBP, and represented 15% of our revenues in 2014. Revenues decline reflect that, first of all, the ongoing phase-out of ST-Ericsson legacy products, the market softening and accelerated phase-out of DPG legacy products. This group is loss-making, and as you know we made important decision last year, including the discontinuation of our commodity camera module business and the implementation of a $100 million cost reduction initiative. Turning to our results. Revenues in 2014 were $7.4 billion. In the fourth quarter, they were $1.83 billion, well in line with our outlook entering the quarter, even a bit better. As Carlo indicated, there were several areas of very good forward progress for the full-year 2014. MMS, representing 20% of revenues, grew 10.2%. APG at 25% of revenues grew 8.3%. And IPD at 25% of ST's revenues grew 3.6%. In AMS, revenues decreased 15.6%, while DPG, in the current perimeter, decreased by 43%, including $548 million reduction due to the phase-out of ST-Ericsson products. We continued to expand our customer base. In 2014, our 10 largest customers represented about one-third of total revenues, and none of them exceeded 10% on an individual basis. Our large customers are important players in their industries: Bosch and Conti in automotive; Apple, Samsung and Microsoft in wireless; HP, Seagate and Western Digital in computer peripherals; Cisco in networking and Delta in industrial. We are now in a different, less concentrated, less exposed model compared to 2010 when the larger customers represented about 14% of the total revenues, but we are having to recover $1.3 billion of revenues lost with Nokia since then. Distribution plays a more and more important role in the evolution of our customer base, not only because we can address a very diverse and large number of customers, but also because ST can capture higher margin on sales through this channel. In 2014, revenues from distribution increased about $200 million, and exiting 2014, they were 32% of total revenues. Looking forward, we expect total revenues in the first quarter of 2015 to decrease sequentially by about 5%, plus or minus 3.5% points. This evolution is better than our normal seasonality and takes into consideration the fact that this quarter we don’t have the one-time licensing we experienced in Q4. In Q4, it occurred the Chinese New Year holiday and based on our accounting calendar we have about 8% less days in Q1 versus Q4. Moving to our gross margin. During 2014, we expanded it by 140 basis points, thanks to manufacturing efficiencies, as well as favorable currency effects. Unsaturation charges, largely related to our capacity in digital technologies have been a drag on our gross margin, and therefore unsaturation [ph] charges will continue to significantly impact the first two quarters of 2015. In that regard, looking specifically at the first quarter, ST gross margin is expected to be about 33.2%, plus or minus 2 points, and reflects still high unsaturation charges. We estimate they will impact the gross margin this quarter by about 120 basis points. Jean-Marc will shortly expand on all the actions we are taking to improve the loading of our 12-inch capacity. We continue to make progress towards our mid-term gross margin target of 36% to 38%, driven by: the completion of the conversion from 6-inch to 8-inch in our front-end fab in Singapore; by the pruning of low-margin products, including the phase-out of legacy ST-Ericsson products and the discontinuation of our commodity camera module business; by the improved saturation of the manufacturing capacity and the related manufacturing efficiencies; and importantly, by currency, which I will discuss in detail shortly. A highlight of our progress has been with net operating expenses. Here we were quite pleased to moving in our target range, which is as you know $550 million to $600 million per quarter, earlier than planned, as the fourth quarter gross operating expenses were $611 million, and net of normalized grants, they were $576 million. As we indicated last quarter, we are taking additional measures in our digital business to extract about $100 million of operating expenses and savings on an annualized basis, which will take effect as we move through 2015, particularly in the second half of the year. Turning now to the balance sheet. ST has maintained a solid net financial position throughout the macroeconomic and industry turbulences, the difficulties with the joint-venture, the cost to exit the ST-Ericsson joint-venture. This has enabled us to make the appropriate level of investment in capital expenditures. CapEx totaled $496 million in 2014, represented 6.7% of total revenues in the year and averaged 6.3% of revenues over the last three years, well within our targeted level. Finally, free cash flow in the fourth quarter of 2014 has been positive by $200 million, after $140 million positive in the third quarter. During 2014, we enhanced our liquidity by taking advantage of a very favorable convertible debt financing for the amount of $1 billion. At the same time, we protected our equity shareholders from dilution by completing a $20 million share repurchase program. Also today, I’m pleased to note that our convertible securities are trading at attractive levels in the marketplace, so really a win-win for all. Finally, let me conclude this financial review with some comments on the currency exposure. As you know, we have seen dramatic shifts in the euro/dollar rate, which today stands at about 1.13. We have not seen this level since 2010 and this is a very welcome change. While a stronger dollar is certainly a tailwind for ST, please consider that ST hedges its costs, so we use a combination of currency forwards and collar options. I am sure you are interested in the projection of effective euro/dollar rate for the next quarter. Maybe before announced, as the company has evolved its cost structure, a revised sensitivity analysis has slightly adjusted the quarterly effect of plus or minus 1 percentage point of change in the euro/collar rate, and this is the effect on the cost structure before the short-term impact that we experienced on revenues. Now the sensitivity model is $4 million to $5 million on gross profit. This has not changed. $3 million to $3.5million on net operating expenses, I mean net of the grants. So the total impact on the EBIT of plus or minus $7 million to $8.5 million per quarter per percentage point. So you will see the benefit of a stronger dollar, but it will take a few quarters for the full effect to materialize in our financial due to existing hedges. Additionally, please note that 14% of our revenue is billed in euro. So over time, normally prices are adjusted to the US dollar equivalent amount. But due to the sudden shift that recently occurred, it will take time to adjust. On the other side the good news is that the effective rate for the cost structure is dramatically improving, assuming the current rate, we estimate the effective rate for the next quarters to be 1.24 for Q1 ‘15; 1.19 for Q2; 1.17 for Q3 and 1.15 for Q4. On this positive note, I turn back to Carlo.

Well, thank you, Carlo. Thank you for your comprehensive review of our financial results. And now let's turn to our product segments, beginning first with the Embedded Processing Solutions segment. This part will be covered by Jean-Marc Chery. So Jean-Marc? Jean-Marc Chery: Thank you, Carlo, and good morning, to everybody. Our Embedded Processing Solutions segment is now comprised of two product groups; Microcontrollers, Memory & Secure MCU and the newly formed Digital Product Group, where we combined our former DCG and IBP organizations, to create more focus in the businesses and to better leverage synergies between them. Looking at the financial results for the EPS segment, revenues were $2.61 billion in 2014, down 20% compared to 2013. This is largely driven by the wind-down of ST-Ericsson. Excluding this anticipated decrease, EPS revenues were down 4.4%, as a result of two opposite dynamics within this segment. Turning first to MMS. The group grew 10% in 2014, continuing its strong expansion, thanks to the General Purpose 32-bit Microcontrollers families. As a reminder, MMS is composed of General Purpose and Secure Microcontrollers, as well as EEPROMs. During 2014, we built on our 32-bit leadership with the STM32 General Purpose MCU family, growing revenue over 50% year-on-year. We expanded the product range with new low-power and high-performance families, such as the industry’s first microcontroller based on ARM Cortex-M7, while strengthening the surrounding ecosystem with the launch of STM32 Open Development Environment. We had success across a broad customer base, including important wins in sensor hub applications. In Secure Microcontrollers, we maintained a solid Secure Element business, while in the banking market we deployed the STPay program, boosting support for the U.S. switch to highly secure EMV chip payment cards. For 2015, we expect that MMS will benefit from our investments in product innovation and ecosystem to further expand the STM32 family across a full spectrum of applications, enabling us to expand further our customer base. In addition, we expect the deployment of new Flash-based dual interface Secure MCUs for banking and ID, as well as new high-density EEPROM products to contribute to our revenue growth. Let's now turn to DPG. In addition to the $548 million decrease in revenues from the wind-down of legacy ST-Ericsson products, DPG has also saw a decline in the area of commodity image sensor products and in the set-top-box business, due to faster than anticipated decline of our prior-generation products. During 2014, we have made the decision to discontinue our commodity camera module business and to focus on FlightSense proximity and specialized imaging sensors. Last quarter, we also launched cost reduction initiatives targeting about $100 million in annualized savings. At the same time, we focused on ramping up new families of innovative products. These included; the Liege family of broadcast set-top-box products in 40 nanometer; 32 nanometer ASICs for networking; and our FlightSense proximity sensor, which went into volume production with a major smartphone maker. We also continued to focus our efforts on innovation and new products to boost our future revenues. We introduced Ultra High Definition p60-enabled 4K2K solutions in our 28 nanometer Cannes and Monaco families, and started shipping to lead customers. In addition, we won a number of important sockets with major operators, both for the area of cable and satellite. We demonstrated full speed DOCSIS3.1 as key technology for cable operators. Our FD-SOI technology progressed well and we received first design awards in 14 nanometer for networking. In addition, we were awarded more than 20 new ASIC designs in BiCMOS, RF-SOI and Silicon Photonics. During 2015, key products we expect to drive growth includes the new products for set-top box and home gateway markets, as well as a broad range of ASICs in 32 nanometer CMOS, BiCMOS and Silicon Photonics technologies. If we look now into the margin profile of EPS, we see significantly decreased its operating loss from $399 million in 2013 to $103 million in 2014. The progress came first, principally from the wind-down of ST-Ericsson; second, from the Nano2017 funding, including of course the catch-up fundings, sustaining our effort to develop our differentiated technologies roadmap; and third, from the benefits of 2013 cost reduction initiatives. Our EPS operating margin mid-term target is confirmed at about 5%. We will drive improvements in 2015, thanks to new product introduction in MMS and DPG, strong improvement in the manufacturing performance, and of course, the already announced cost reduction initiatives. Since I just mentioned strong improvements in manufacturing performance, let me conclude here with our manufacturing strategy. Our Crolles 12-inch fab is engaged in an important technology diversification strategy to better balance and optimize its capacity loading, with a significant payback and much reduced unsaturation costs for the second half of this year. Indeed, over the past two years, we launched a set of action in Crolles to better balance that with our current product portfolio, and of course, to mitigate the short-term under loading situation. The exposure to Advanced Logic has been reduced and Embedded Flash for Microcontrollers and Automotive has been qualified and started production. Therefore, we are now at a time where Crolles 12-inch is under transition, and we expect to see progressive improvement as we balance and optimize the loading of the fab.

Well, thank you, Jean-Marc. And now, I would like to move to our Sense & Power and Automotive Products Segment. I think we are well positioned here from a technology perspective, from a product portfolio perspective, and from a customer expansion perspective. In short, we have many opportunities for growth. Looking at our results last year, we saw excellent revenue growth in APG, well supported by IPD. Moreover, we saw very significant improvement in the operating income and operating margin of SP&A on overall flat revenues. And in AMS, where ST has shown strong leadership, we have the opportunity to return to a positive momentum in 2015. So let me ask Georges Penalver to join us to review the results and plans for SP&A. Georges?

Thank you, Carlo, and good morning, everyone. SP&A represents about 65% of ST revenues, with the three product groups. It is managing four manufacturing sites, including our mega-fab in Singapore that we are currently converting from 6-inch to 8-inch. SP&A revenues were $4.77 billion in 2014, flat compared to 2013. APG grew over 8% broadly based across all applications. IPD grew also close to 4%, despite the softening in the second part of the year, reflecting the market conditions. And AMS revenues were down 16%, due to low-margin product pruning and product transition. In AMS, microphones and touch-screen controllers, two recently added product families, both recorded very strong growth, becoming significant contributors to AMS sales during 2014. The group also pursued expansion in key customer and application diversification, with a leadership position in MEMS for wearable devices, expanding from motion to environmental sensors, with the ramp of MEMS for automotive and a first design win for a combo motion MEMS for active safety. On a regional basis, it recorded strong growth in China, where ST MEMS were adopted in over 60 new phone models from 12 companies during 2014. AMS also launched the Open.MEMS initiative toward the mass market, providing easy licensing for sensor fusion software. The group continues to innovate, introducing new technologies such as Piezoelectric for micro-actuation, where we announced a partnership for a new smartphone auto-focus application. And, importantly, setting new benchmarks in motion MEMS with a new generation of 6-axis motion sensors, with ultra-low-power and leading noise performance for the consumer market, as well as the industry's smallest 6-axis sensor, qualified for non-safety automotive applications. Revenues for 2015 are expected to return to growth, boosted by this new generation of 6-axis motion MEMS with key customers, and by continuing to ramp up Automotive MEMS. We expect further expansion of the touch-screen and microphone businesses, together with a wider adoption of environmental sensors. Our STM32 Open development Environment and open software solutions initiatives will help us address mass market and internet-of-things applications, with products like our Bluetooth Low Energy solution. Let's turn now to IPD, where we recorded solid growth in a number of applications in LED lighting, digital and analog solutions, motor control ICs, IGBT and Intelligent Power modules for appliance and industrial applications, and Field-Effect Rectifiers Diodes to leading mobile phone charger manufacturers. We also ramped production of high-voltage rectifiers and transistors at a leading electric car manufacturer. Among the many innovative, best-in-class technologies and products brought to the market by IPD last year, I would like to mention our power management chipset for servers, the galvanic isolation technology for industrial applications and our 1200 volt silicon carbide transistors. The group also expanded the automotive product portfolio with rectifiers, with IGBT, silicon carbide diodes and thyristors. Revenues for IPD will continue to grow in 2015, through customer base expansion, with important initiatives in distribution and mass market, as well as through a wave of new leading products, such as advanced low-voltage trench MOSFETs for industrial and server applications, Intelligent Power Modules for industrial, AMOLED power supply and power management ICs for smartphones, various components for RF applications, and silicon carbide schottky diodes for servers, telecom and automotive. Turning to the Automotive Product Group. Revenues in 2014 were strong, thanks to growth across all customers, including distribution and across applications. From a geographical perspective, we expanded our footprint with key OEMs, while also strengthening our leadership in China in engine management, body and audio applications. And our independent manufacturing strategy and secured supply chain helped us continue ST's strong momentum in Japan. APG's success leveraged ST technology leadership in power with VIPower in BCD products, and expanded the portfolio of 32-bit microcontrollers doubling shipments, as design wins started to ramp. In the infotainment area, APG introduced industry-leading digital radio, class D audio amplifier and global positioning products. And in the very promising ADAS Vision Processor product family, the group reached production maturity of the third generation, and is now developing the fourth generation in FD-SOI. In 2015, APG will continue to benefit from its broad based portfolio strength and particularly from active safety products, thanks to growing penetration and new products in that market, as well as from gaining market share in 32- bit microcontrollers and growing in infotainment. We also expect to further leverage our capability to support full system development to broaden the customer base with distribution. From an operating margin perspective, SP&A had a year of great progress, reaching a 9.4% operating margin from 5.7% in 2013. This was driven by improvements across a number of product families. Entering 2015, the segment is pursuing further progress towards its operating margin target in the range of 10-15% by improving its product mix, by continuing expansion in the mass market and distribution and by improving manufacturing efficiency. Now, before turning the call back to Carlo, let me comment on ST's efforts in the mass market. One of the ways to increase mass market penetration is to expand our customer base by growing the number of channel accounts. Another key effort is on promoting leading applications and products through initiatives such as the STM32 Open Development Environment, exploiting our success in microcontrollers. More than 80,000 STM32 Nucleo Development & Expansion boards were shipped in 2014. And in 2015, we will further develop these initiatives, and in addition among our actions expand our online presence with enhanced support capabilities for mass market customers. Thank you and now let me give the floor back to Carlo.

Thank you, Georges, and let me just add that our mass market initiative spans across all the product groups and leverages the multiple synergies among them to serve growing applications to many more customers. And the results were evident already last year, making us a leading player, present in many, many devices such as in the internet-of-things as you can see on the chart here. Before closing, let me share a few final comments. First, allow me to thank all our employees. It is their talent and determination that have enabled ST to come through the difficult transition in 2013 with the energy and drive to turn 2014 into a year of good progress in terms of product leadership, operational improvements and a financial performance turnaround. We have developed process technology leadership second to none, introduced many new flagship products across our product portfolio and built an expanded customer base. We see opportunities to continue to expand in automotive, in the mass market, where our design wins increased very significantly during 2014, and I am optimistic that this year we will see positive steps forward, also with major consumer and smartphone customers. Our path going forward is clear, return to growth and reach the cost structure that we have outlined in our financial model, to continue to achieve year-over-year improvement in our financial performance. And now my colleagues and I would be happy to take your questions. Thank you.

The first question is from Mr. Sandeep Deshpande from JP Morgan. Please go ahead.

Thanks for letting me on. I have a couple of questions, if I may. My first question is regarding Analog and MEMS. You have a major customer there, which has had a very good quarter last quarter, whereas you seem to be seeing essentially flat lining sales in Analog and MEMS. Can we try to understand the project - rather revenue trajectory in that business, and how that development will continue this year? And secondly in the digital - in your newly merged Digital Convergence Group, the revenues are lower than the disappointing second quarter of last year. So how - and this was a revenue business which was expected to more double the revenues. So can we understand project trajectory here as well? Thank you.

Yes. Thank you, Sandeep. I think we already described during the course of 2014 and even today. 2014 was a year of transition for our AMS business. On one side, we had some reduced revenues in the area of our traditional motion MEMS; on the other side, the introduction of new successful products like the microphone MEMS and our new touch solutions. Moving on in 2015, we want to be successful with major customers, with the new products and with our traditional products. I think we have all the ingredients to be successful here, and clearly we see AMS as an important driver for growth in 2015. We also want to be successful in our diversification efforts. I have mentioned before that we have won for the first time a very critical MEMS device for safety applications in the automobile. We want to be successful of course also in the diversification strategy in China in the more fragmented smartphone market. And we also want to be successful in the internet-of-things. I think I want to mention here for instance our Bluetooth Low Energy, where we had a very important win with a significant customer in United States on internet-of-things applications. So clearly 2014 was a year of transition. Many, many new products, many new products. And this year will be a year of growth. And this would be on our traditional products of the past and on many, many new products, and of course, continuing to differentiate and drive the diversification. If we move into the DPG part, we believe that the gaining and the pruning of the products is almost completed. We need to go through some more in the area of what we have announced last year in the commodity camera modules. And for all the rest, we expect good growth. We expect growth with our new Time-of-Flight, the proximity and other applications that we achieved with our Time-of-Flight technology, in the smartphone but also in the industrial market. We see good growth with our ASICs, particularly in the area of 32-nanometer this time. We have several products here for communication and infrastructure applications. And with all the new set-top box products - the decline was really on the legacy products, on the previous generation products. The new families is very successful. We are expanding on the 40-nanometer that is more for a fragmented base of customers, but also in the - with the new technologies the 4K, with new for us major operators and customers. So clearly, we are hitting the bottom. And I think we already described this, but in our model of $2 billion per quarter, the contribution of DPG is around $300 million. So we will have another final effort to prune on the camera modules, but then all is done is both new products and starting to grow again.

Thank you.

Thank you, Sandeep. And also we have Carmelo Papa, who is our General Manager of the IPD Group that is joining us for the Q&A session as well. We’ll move to the next question please.

The next question is from Mr. Gareth Jenkins from UBS. Please go ahead.

Couple if I could. I just wondered, gentlemen, you obviously laid out the currency movement for this year, which is quite helpful. I wonder if you could give a sense of your OpEx guidance that you’ve given historically under that new currency regime, obviously it’s going to be impacted. So I just wonder whether why not lower your OpEx at this stage? And then just secondly on FD-SOI. I wondered whether you could give a sense of whether you’re licensing out that beyond just ST products. And if so, who you’ve licensed beyond this foundry agreement with Samsung? Thank you.

Yes, Carlo will take.

Good morning, Gareth. I guess your first question is about the currency impact. I hopefully in the chart that you have now on the website and in the presentation, we offer you all the detail. At the end, we have outstanding currency contrast. We have an opportunity at that level ultimately what counts is the effective rate, including the current hedging and assuming that currency level remains at the current exchange of 1.15. So you see that we have some advantage, but not so significant in the first quarter to 1.24 expected effective rate, and then progressively we will start to take benefit in the cost structure with 1.19 for the second quarter, 1.17 expected for the third and 1.15 for the fourth quarter. So second half will take advantage of that. I’ve also mentioned this is important at the end not to [indiscernible] as depending how the change has been despite to the revenues impact. Our revenues are - 14% of our revenues is built in Europe. In a normal trend, there is some progressive realignment of pricing to that dollar equivalent. In a certain trend this is safe time [ph] and as you can expect that being a part of semiconductor industry customer is really answer to price increase as much higher than customer pressure on price of adjustment goes on the other way. And this is another reason why we tend to be prudent on the short-term impact, given that the revenues - these are revenues implications. To make sure that on your question for the operating expenses, on the current quarter first. On the current quarter, at the end we have a number of positive, the currency we have mentioned. We have a shorter calendar that maybe a bit mitigated by the fact that the classification in Q1 than in Q4. We have further step of progression on the restructuring of EPS. On the other side, last quarter which ended in OpEx we have reported about $6 million that has been a one-time recovery of patents made in our costs associated with the sale of - some sale of patents by ST-Ericsson. And this of course is no longer in Q1. Then there is some inflationary impact on the labor cost issues also. Again I would expect both gross and net operating expenses to go down sequentially in the range between $10 million to $20 million dollars in Q1. So they would move the net operating expenses towards the low-end of the range in quarter, which is expensed over short-term. Then going forward, the only thing we can add is at the end of the day, we’ll continue to execute our plan and we will take benefit of the currency impact on the expenses in clear direction from [indiscernible] is that any penny of savings in the currency environment will translate into operating income for the company. Your last question was about the licensing in the fourth quarter.

On the SOI license.

Yes.

Yes. More of FD-SOI actually just in terms of licensing out beyond rather than the one up in Q4?

Yes, I would say that at the end of Q4 have marked another opportunity in respect to our licensing strategy. There is, I would say nothing particular relevant to report on this respect, and to have view on the modeling, please consider it mostly a one-time effect.

The next question is from Mr. François Meunier from Morgan Stanley. Please go ahead. François Meunier: Yes, thanks for taking my question. A question about the utilization charge you’re still having on your gross margin. I don’t know, Carlo, if you could give us maybe the level of sales you need to achieve to have zero impact on gross margin from those lower utilization charges in the factories?

Yes. Maybe first of all, I came to say from times that not necessarily the answer could be meaningful in respect to the question. And the problem we are currently facing in terms of saturation is spotted on a limited number of technologies and effects. Unfortunately perhaps that those that are the most expensive in term of fixed cost. So at the end of the day, it’s not so much related to the overall revenues of company is related mostly to the loading of our 300-millimeter fab. And in this respect, at the end there is an evolution associated with revenues in the DPG area that we have been talking, but there is more important, and Jean-Marc as I believe will explain it before, there is an opportunity with growing the revenues in a new product, a new technology that are now qualified in Crolles 300 for embedded non-volatile memories by group like MMS and APG. So at the end of the day, the step we have to do is to increase the loading of Crolles 300. This is going to take a few more quarters. All the actions are in place. We may expect, and you should expect please still some significant revenues lower than Q4, but still significant in this current quarter and in the second quarter. It’s a bit earlier now for talking about Q3, but Q3 for sure will be much less than that and we will update that quarter-after-after. François Meunier: Okay, understand. Very clear. Thank you.

Thank you François. Next question.

The next question is from Mr. Andrew Gardiner from Barclays. Please go ahead.

Good morning. Thank you for taking my question, perhaps following on from that last one. If you go back to your mid-term targets. So you’ve set out, I believe $2 billion in quarterly revenue and you mentioned again counter of that $300 million is from DPG. Previously you had been aiming at that for the second half of ’15, but have recently acknowledged that’s going to be a bit of a challenge. I’m just wondering if you can give us any sense as to how the pipeline is building and how close you might be able to get to that level in the second half of ’15, or whether it really is some more of a 2016 target at this point? Thank you.

Well, of course as you say, there is a degree of challenges in getting to this level of sales during the course of this year, but we are all focused. And I would like to make a comment here, trying to position in terms of customers and markets rather than products. I mean, we had last year I believe a great performance in the area of mass markets. And this has worked out very well, particularly in America and in Europe, and a solid performance in the automotives, some significant product pruning in the area of AMS. And now as I said before the remaining product pruning is on the digital - I mean the digital camera modules from DPG. And the remaining tail that is still going down of ST-Ericsson, but then we rose up [ph]. And we expect that this product pruning is completed by Q3 this year. And then there is - but of course this has been driven by us. And then there is a fourth portion where I believe last year was not good, and this was on particularly in the area of consumer customers, and in general in the smartphones. We expect to have - thanks to all the new products that we have introduced last year, a very significant improvement in general in the area of consumer customers and the smartphone customers with all our new products and technologies. So what we want to do this year? Of course is to complete the product pruning. This is driven by us. And I expect that for us this will become the fastest starting from Q3 this year. So we’ll not talk any longer about wireless or camera modules or thing that is involved in the past, and we want to continue this year to be successful in the area of mass market. We are launching Munich at the Electronica Show, our new system based on the STM32 Nucleo boards with a number, increasing number of expansion boards with many other peripheral products to be used together with our microcontrollers. So we want to expand the customer base [indiscernible] to continue with our solid progress in the automotive, with automotive customers and to turnaround what was the weak spot last year in the area of consumer and smartphone customers. The products are there. I think we have successful new products, wider range and this is valid for the set-top box, it’s very valid for all our sensors, the touch etcetera. So we expect this to be an important ingredient to our growth this year. We need also to consider that there would be some negative effect in terms of euro/dollar rate, but of course more than compensated by all the benefits that we have in terms of cost and expenses. So challenging with - we want to drive this strongly. We know what is the area of focus and what we need to do in terms of turnaround as I said, and we are very motivated. As Carlo said, we will not leave any penny on the table that is coming from the advantage of the euro/dollar rate and very motivated to clean what we need to clean still and to go back to growth.

Thank you. And just quickly as a follow-up. I mean, in terms of your - if I can rephrase it in a different way, you sound very confident in terms of the customer engagement in the contract. So just perhaps a question of end-market volume, where the uncertainty lies. Is that fair?

Absolutely. It is clearly the case I think with sometimes, I mean not this time in my script, but in three quarters ago, I mean we made an example of very important phasing for us that we have time, I mean the execution in terms of R&D has been working well, but there is a postponement, this is material, but I mean all the evidence and this is a very important program that we have. And I think it’s also the number of new products that we have introduced that last year is giving us confidence, but as you said, we also have some resistance in terms of customer on some of these new products.

Understood. Thank you.

Thank you.

Thank you Andrew. Next question please.

The next question is from Amit Harchandani from Citigroup. Please go ahead.

Good morning gentlemen. Amit Harchandani from Citigroup. Thanks for taking my question. A couple if I could. Firstly, my first question on the broader bookings and backlog trends that you have seen during the quarter. If you could shed some more light on what you are seeing across the various segments, how it trended during the quarter? And what are the other potential dynamics underpinning this above seasonal guidance that you have for Q1? And just a perspective on the broader demand environment as you look forward to the next 12 months? Maybe that’s the first one, and I have a follow-up.

Yes. Let me cover maybe bookings, and then can cover Q1 guidance. In Q4, we have experienced significant improvement of the booking conditions when comparing to Q3. It’s not yet at the level that we have in Q2 last year, but definitely it was a material improvement of the boarding [ph] during the course of last quarter when we compare to Q3. It was across the range of the products. I think it was for both Sense & Power and Automotive, but also in the area of Microcontrollers and in general in EPS. Geographically, of course we see America very, very strong. But again I think if wins compared to Q3 improved on a global base and this is giving us of course some encouragement and the fact that for instance and now we’re turning to Carlo, the guidance that we have been giving for the first quarter is based on our historical results is better than seasonal effect with billing per day that is higher than in Q4. Carlo?

Hi, Carlo. Maybe I start from this point again that you may have your own track record or statistic. In our statistic at the end, normally Q1 is weaker with respect to Q4 by about 7%. Another way of addressing the question is at the end we have the cut-off on December 31, this makes Q4 longer, Q1 shorter. And when you compare the two, you take the combination of the two and this makes an 8% difference in the number of days. So if you run math expecting a sequential decline of revenues at midpoint at 5% associated with a shorter number of days by 8% at the end makes as a quarter which is in the shipment higher than the third quarter somehow. So it’s never going to happen. So if revenues are moving in the expected direction in this respect, then how to characterize the guidance. At the end, we have had maybe some group that had a particularly weaker Q4 for some reason like automotive. And for automotive for instance in Q1, despite seasonality, we do expect that some revenues in the positive sign - with a positive sign and we expect no major changes for the AMS Group, which is another indication at the end that - on what Carlo said earlier about the trend in AMS, which is again the average of the company and again the seasonality. And then eventually in the area of EPS that offset DPG had has in Q4 some one-time and we will see the effect in the Q1. And by the way, let me take the opportunity to specify that this license that has contributed to the fourth quarter revenues did not came as a surprise in respect to our low initial guidance was in the forecast.

Great. And maybe as a follow-up just if I could go back to the automotive division, if you could just talk a little bit more - we have heard a lot of positive commentary around demand on the automotive side and you too seem to have enjoying lot of strength over there at least over the past 12 months. Could you maybe give a brief comment on how do you see the various areas within automotive shaping up as you look towards the next 12 months, and do you think you will make gains versus competition? Thank you.

Yes. Well, first of all, I mean this is - we have not - I have not mentioned this today, but it is in our press release, I’m sure you have read. I mean, we had a little glitch in manufacturing, and I think in Q4 we have less than the table about $10 million of billings that of course is a temporary delay. So we are catching up in that. For the rest, I think our core business remained very solid. Everything that we see coming from our - for instance, German customers is pretty solid, same in United States. We see some softening in Japan and if we look - if we talk about China, some areas in China that is softer which is more of the infotainment part, of the more of the automotive business. So I think for us of course the core is very much centered around the performance of our German customers. I think there is a solid demand. As I said, U.S. is performing well, and some softening in Japan. But we also have many new products here. And this I mentioned before in the text there is the expansion of 32-bit microcontrollers business last year. We doubled this business with our 32-bit microcontrollers for automotive, and we want to make another important step this year.

Thank you.

Thank you.

Thank you, Amit. Next question please.

Next question is from Adithya Metuku from Bank of America. Please go ahead.

Yes, good morning. Most of my questions have actually been answered. Just a couple. If you could - just wanted to be honest, if you could just give us your views on CapEx for the next year, that would be great.

At this stage and we have usual caveat on the modularity of CapEx. Depending on demand we see the year a level of CapEx in the range of $600 million for the full-year. It is expected to be an year of growth, is an year of investment for expanding capacity to support growth and also to support the technology changes in important fab as we have already talked. And this is you see I believe a level of CapEx higher than the prior year and still very well within our financial books.

Yes. And of course we will see the evolution of the business. We were talking about $2 billion before, so it depends a lot on the way the business will move.

Understood.

Thank you, Adi. Next question please.

Next question is from Stéphane Houri from Natixis. Please go ahead. Stéphane Houri: Yes, good morning. Actually I’ve got one very quick question and a follow-up. The first question would be to understand - I’m sorry I’m going to make you repeat why the impact of the dollar is lower. You were talking of a range of $8 million to $10 million throughout that quarter for each change now you’re talking of a lower range. Could you just remind me why that is lowering?

Well, not too much indeed, because in the past it was $9 million per quarter and it was about 50/50; 50% on the gross margin and 50% on the expenses. I think in the gross margin we have no change. I think what we are giving today is in the range between $4 million to $5 million. Right, Carlo?

Yes.

And the expansion is, in the mean time we manage to become a little bit smaller with our particularly of course with the exit from ST-Ericsson etcetera and this is the root cause of this - I think that the average that we are giving today that you can read on this table that we have led to you I think the average is $7.75 million per point per quarter, and this is really very much related to the expenses and the fact that we have in these quarters and years we have reduced our base of expenses. Is that right, Carlo?

Absolutely Carlo. Maybe what I believe so that Stéphane to highlight when presenting before this on the chart you have on now on the lower side is that the euro exposure has a bit declined to 46% of the total cost. And this is thanks to initiative of cost reduction of course, but then as you can expect, there is also a mathematical effect that the lower euro/dollar rate, the cost structure balance changes. I would not make that - and the other important point is given out attention and the focus we want to have with you in respect to the net of balancing expenses to monitor quarterly, our ability to achieving the target of $550 million to $600 million of net operating expenses, net of the grants. I thought it was appropriate to give you the sensitivity net of the grants as well, and as you know the grants are in euro. And there the reason is mechanical. Frankly, I will not expect it the major change. The key point also we wanted to pass which is important is that while in a normal and a smooth evolution of the exchange rate we believe that the impact our revenues could be absorbed in a couple of quarter with these sudden change in the direction against customer resilience on pricing adjustments of course may take a bit long. Stéphane Houri: Understood. Thank you. Now the other question was about the notification to IBM of intention to end the participation to the IBM Alliance. Could you come back on the reasons of this choice, and if it has a consequence I would say to your implication, to your involvement in the FD-SOI development process at 10-nanometer as you had suggested in Q3? Jean-Marc Chery: Okay. So it’s Jean-Marc. I will answer the question. So our agreement with IBM provides us the right to end the participation in this Alliance under certain condition. And we made the decision during the quarter to exercise those rights. Of course I cannot comment more, because the terms of the agreement are confidential. Maybe also I would like to say we will continue to work closely with IBM and the other member of the Alliance on ongoing projects until we leave the Alliance. And today, we are in discussion with IBM to plan for smooth wind-down of our participation in this Alliance. Now up on technology. Now if you remember in the fourth quarter of 2014, ST has reviewed the application to process technology following the announcement by IBM and the global foundries. Although our technology review remains ongoing and we anticipate our process technology are not especially in digital, we’ll continue to focus on our differentiated external like CMOS FD-SOI for 2014, NF-SOI, embedded non-volatile memory for microcontroller and specialized camera sensor, our FlightSense and BiCMOS and Photonics. And we are, let's say convinced that it will enable innovative solution, providing consistent payback of the similar market waves. So this decision is independent of the technology roadmap and we conservatively focus on this specialized technology. Stéphane Houri: And does this have an implication on the R&D spending results for the full group?

That is part of the model that is given, and of course we cannot comment on details, but this is part of the model. And I think we cannot provide more information here. Stéphane Houri: Okay. Thank you.

Thank you.

Thank you, Stéphane. Next question please.

The next question is from Günther Hollfelder from Baader. Please go ahead. Günther Hollfelder: Thank you. Two questions. First one, any guidance or indication for restructuring charges in 2015 what to model in? And the second one a follow-up on the IBM question. You had said continued to focus on differentiating technologies. Are there any advanced CMOS technologies that you used in the past from the Alliance, maybe which in future there could be potential to outsource these technologies to foundries maybe also with a positive impact on the capital intensity and R&D? Thanks.

I think today, we outsource of course a part of our CMOS. Clearly, it would be possible to in-source this quickly, we would have done because we had still material unloading cost in the product. I think there is today - I think today if we look at the CMOS, our outsourcing is more than 20% and something like this. And there will be - there is and there will be an effort to outsource a part of our CMOS. I think we announced for instance an agreement with Samsung on the 28-nanometer FD-SOI and Samsung will play a very important role in this respect for manufacturing these products. And of course this is also an opportunity as you said for us to mitigate our capital investment. If we now go to the other point, Carlo?

So around the restructuring how to recommend to model about $30 million to $40 million restructuring charges to the P&L to go for the next three quarters of the year, mostly concentrated in the second and the third. Günther Hollfelder: Good. Thank you.

Sure.

Thank you, Günther. Next question?

Next question is from Dan Gardiner from Arete. Please go ahead.

Good morning, gentlemen, and thanks for taking the call. I wondered - a couple of questions, if I may. Firstly on distribution. The revenue there looks to be obsolete, 9% year-over-year. It looks to be mostly kind of an environment market growth. Can you tell me - are you driving increased range of existing products amongst distributors, or are you broadening the range of distributors? Do you think the less further potential for that distribution channel to grow in 2015, and what sort of order of magnitude would that be?

Yes. It’s true, it may be aligned, but consider that we had also some material product flowing. And this of course is impacting particularly distribution. And so if we exclude this part, I think our performance was very material. I also believe that in distribution I think we have a faster increase of the point of sales compared to the billing that we report and you are referring to. Yes, this is an area where we want to push more. We want to push more, and I underline with other key initiatives. The first one is our target accounts and this we are doing with our distributors. We have 1,600 customers that are target accounts that we want to focus on supporting our distributors to develop these customers. The second target is really the number of channel accounts. So we are talking about many, many accounts here, thousand and thousands of accounts, and it is important that we have the opportunity to expand the number of these customers. I think we are also making a major effort with the new generation of ST online during the course of this year. This is another effort that this instrumental to what we do in distribution. As I said before in Munich, we have launched this new system of development board, that’s centered around our STM32 with Nucleo boards and a number of expansion boards or shield boards. So these are both including many other products from sensors to power to, for instance connectivity products, and it is kind of lego approach [ph] and all the software is compatible and our customers starting from the Nucleo board for the microcontrollers, they can plug-in the other boards and develop their applications in a way that is very, very effective. I think also our product portfolio I think is more and more intended to what we want to do in the mass market. So indeed, this is a very, very important priority for ST. And there is nothing special that we want to do in terms of channel or changing our channel. I think we are working with the leader today and they are major American and Asian companies and we will work with these companies.

Okay, thanks. And can you talk a bit about APG? I was interested in your comments around the softening in Japan infotainment market. And if you look at your fourth quarter numbers, shows a significant slowdown in terms of year-over-year trends. Is that related to - and also that sort of seems to be underperforming the rest of the infotainment guys, Maxim and TI and so forth. Can you tell me if there is something specific at your customers, or is there market share loss or is this currency-related? And do you expect that to recover in the first quarter?

Yes. Well, as I mentioned before in DPG - in APG, we had manufacturing problem in Q4 that has impacted our sales by about $1 million. And in the year we grew I believe 8.3%. I think is a solid growth, likely better than the market despite this level of change. What we see in market softening today is two areas without specific, and also be a little bit less material for us, thanks to the fact that our core business is really centered around the major German industry. So the first one is in general in Japan, this is what I said before. And the second is part of the business in China where we are number one in the automotive and this part is the infotainment in China, right. So this is the situation. I think in Q1, we expect to grow in APG, despite significant shorter quarter. And I think what we see that we have overall a robust demand in this business. So we are confident that it would be another year of good growth and good financial performance.

Okay, thank you.

Thank you.

Thank you Dan. Next question Myra?

The next question is from Achal Sultania from Credit Suisse. Please go ahead.

Thanks. Just a quick one on APG long-term. Can you just give us some sense of have you seen significant improvement in the semi-content that goes in automotive for 2014? If you were to look back last few years, we’ve seen 2%, 3% content growth. And has that been significantly increased in ’14, and how should we think about this trend more longer term if you look out two, three year out?

Yes, I think there is a continuous process and improvement and improvement here. Of course there are important drivers or important new drivers. I mean one important driver that I would like to mention is about the so-called, ADAS, that is the advanced entity, everything that is there to assist the driver in the driving and even the autonomous driving. This is an area where ST is very strong. We have partnerships here. As I said before, we have our third generation of products and we are developing the fourth generation of products that is in ST’s line. So this is one area where we see a very, very important trend evolution and growth. Another area of course is the electrification of the car and here is platform of products which is very important to also empower to many power discrete products and both rectifiers, but also IGBT products. And so this is another plan. I would like also to make sure the fact of course that electronic is more and more pervasive also in the low-end car and this is also very, very important to us. We want to cover all. There are very few things that we are not doing in the automotive. I mean, I mentioned before in last quarter, we won our first major MEMS for a safety application. This is a big program. It’s a big win. It’s a very complex device. So of course, it’s a custom device for a major customer and this will be a significant business in the future. It will take some time because times in automotive are a little bit longer. So we cover pretty much everything in the car with exception of two things. So we do not have the finishing model and we do not - we will not add that. And what we do not have is that is for the very high end, the major application processor for car infotainment for the rest overall from LED lighting to RF radio solutions, powertrain, MEMS, discrete products for application, the most advanced products for safety applications. So it is very broad. And of course we are very encouraged by that pervasiveness and the increase of semiconductor content in these applications.

Thank you.

Thank you.

Thank you. At this point, we’ll take two more questions please.

Next question is from Gianmarco Bonacina from Equita. Please go ahead.

Yes, good morning. Basically I see that in the Q4 your performance phase for the new digital group is about $260 million if I add imaging and the old DCG. Can you tell us how much of this $260 million is represented by the legacy Ericsson and by the commodity camera business which you’re going to discontinue? And is it safe we can expect basically to be close to zero by the end of 2015? Thank you.

Yes. I think this is - if we look at this $260 million of business and you mention the remaining part of ST-Ericsson and the activity related to the model and the camera modules. I think overall it’s about $50 million. Okay? And now $50 million is a lot, but please consider the margin is very, very low and is not really contributing to the gross margin of the company. There is almost no contribution. And we expect to clean it up. As we said before at start, finally very clean and focused by Q3 this year. This is what we want to do and complete this phase, and of course we want to replace this business and then grow with many new products in the area of ASICs, in the area of the Time-of-Flight sensors, in the area of the new set-top box solutions and grow from there.

Thank you.

Thank you, Gianmarco. Next question please.

Today’s last question is from Johannes Schaller from Deutsche Bank. Please go ahead.

Yes. Hi there. Thanks for taking my question. You mentioned some good momentum in some of your silicon carbide product earlier. Could you just maybe talk a little bit more broadly about silicon carbide and also gallium nitride, just how you look at this market, if those are better margin products for you than say traditional IGBTs, and then also [indiscernible] situation for both is strong and you entail that will develop? And then also a quick follow-up on China automotive. The weakness you are seeing there, could you just be a bit more specific is this factory fit or aftermarket, and is it right to assume that this is mostly with the local brands? Thank you.

Yes, Carmelo - I mean, we have not introduced, but Carmelo Papa that is managing IPD is here with us. And well, first of all we are very pleased with both our PowerMOS and IGBT business. I think we can do better in terms of top-line evolution that is a very important contributor, very good products with an excellent level in terms of excellent financial performance level. So Carmelo, why don’t you comment on the silicon carbide and what we are doing there?

Yes, the first thing is that I would like to say that silicon carbide we are now in the third generation of the 600 and 650 volts diodes. We are the first generation of the 1200 volts of diodes. And we are the first product, the only one on the market now dealing with 200 degrees of junction temperature, so we’re the only one in the market that is making very important inroads. I’m talking - I’m referring to PowerMOS. This is the first one on the market, currently the 200 degrees at junction temperature. These will enlarge enormously the range of application so we can cover today with MOSFET high voltage in also IGBT, because it can work at very high frequency and it improves enormously the - let's say the efficiency of frequency converters and the likes. So we have all the weapons that the market requires to be competitive and we are producing the 6-inch, which is don’t be amazed - this is we are not - this is true power. We are talking of 111PS [ph] and hundreds of volts. So working today the state-of-the-art is doing the four and six-inch. You will never reach the 12-inch. So we are moving it into 6-inch to be in the forefront of the market. And the first preliminary feedback we have particular for the MOSFET which is new to the market from some major customer and some from smaller customers are these are excellent. So I hope that with these and with the full range of low voltage of MOSFET that are adding to the high voltage, a new range of field IGBT, I think we have all the ingredients including the manufacturing capabilities that we have with 8-inch in Singapore to be competitive this year. So I expect that our market share this year will grow.

So we are happy about silicon carbide is doing well is I think is we are very strong. We are in production with rectifiers and we have now this 1200 volt MOSFET is a great device. And we are also very, very structured and then mature in manufacturing. That was well structured and matured manufacturing. That is one of the challenge in this business. So we believe it’s becoming more and more real industrial program, and of course the benefits are evident.

Thank you. That’s helpful.

If I can add one more point. There will be new applications for power that traditional technologists cannot afford today, those of the frequency and everything.

Also in terms of cost reduction, we are making some major steps here. So it’s going to paying off. So on the automotive, yes, you’re right. I think this is really more the aftermarket. There is a fragmented market in China in car infotainment, but maybe we spend too much time here. We are still very pleased about the backlog that we are in the automotive. There is a very solid backlog even for Q1. We had this little glitch in manufacturing in Q4. We left on the table $10 million. And now we want to grow in Q1. We see solid demand, particularly from U.S., from Germany, some softening in areas that are a little bit less important for us like Japan. And so overall it’s good as we see a good trend.

That’s very helpful. Thank you gentlemen.

Thank you.

Thank you, Johannes. At this point, we’ll go ahead and close the conference call. Thank you for your participation and please note ST’s next event will be at the Mobile World Congress on March 3. And we’ll send out details shortly. Thank you very much. End of Q&A:

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