Tait Sorensen - STMicroelectronics NV Jean-Marc Chery - STMicroelectronics NV Lorenzo Grandi - STMicroelectronics NV Marco Luciano Cassis - STMicroelectronics NV

Achal Sultania - Credit Suisse Securities (Europe) Ltd. Aleksander Peterc - Société Générale SA (UK) Sandeep Deshpande - JPMorgan Securities Plc Anthony Joseph Stoss - Craig-Hallum Capital Group LLC Janardan Menon - Liberum Capital Ltd. Jérôme Ramel - Exane BNP Paribas Andrew M. Gardiner - Barclays Capital Securities Ltd. David Mulholland - UBS Ltd. Stéphane Houri - Oddo BHF SCA Amit B. Harchandani - Citigroup Global Markets Ltd. Francesco Previtera - Banca Akros SpA Günther Hollfelder - Baader Bank AG Robert Sanders - Deutsche Bank AG (UK) Lee Simpson - Stifel Nicolaus Europe Ltd. Adithya Metuku - Bank of America Merrill Lynch Gianmarco Bonacina - Equita SIM SpA

Ladies and gentlemen, good morning or good afternoon. Welcome to the Second Quarter 2018 Earnings Release Conference Call and Live Webcast. I'm Moira, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. After the presentation, there will be a Q&A session. 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. Tait Sorensen - STMicroelectronics NV: Good morning, everyone. Thank you for joining our second quarter 2018 financial results conference call. Hosting the call today is Jean-Marc Chery, ST's President and Chief Executive Officer. Joining Jean-Marc on the call today are Lorenzo Grandi, President of Finance, Infrastructure and Services and our Chief Financial Officer; Marco Cassis, President of Sales, Marketing, Communications and Strategy Development. This live webcast and presentation materials can be accessed on ST's Investor Relations' 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. I'd like to now turn the call over to Jean-Marc Chery, ST's President and CEO. Jean-Marc Chery - STMicroelectronics NV: Thank you, Tait. Good morning, everyone. Thank you for joining us on our call today. I am very pleased to be here to talk with you together with my colleagues in my first earning results call that leading ST. So, let's begin with an overview of our Q2 performance. Our second quarter results were solid and in line with our expectations. We had another quarter of double-digit, year-over-year revenue growth, balanced across all product groups, regions and end markets. And we drove another quarter of improved performance across key financial metrics. Looking at our Q2 business results, both revenues and gross margin were above the midpoint of the company outlook. We grew revenues 18%, our seventh consecutive quarter of year-over-year, double-digit sales growth. The revenue growth was broad and balanced. This is important to achieving sustainable revenue growth. From an end market viewpoint, Industrial was particularly strong during the quarter. Our gross profit increased substantially, $911 million, up 24% over the year. Our gross margin was 40.2%, increasing 190 basis points year-over-year, largely driven by improved manufacturing efficiency and by a favorable mix shift toward higher value products. Operating expenses were $622 million, above our expectations, mainly due to one-time, non-recurrent items that were not embedded in our Q2 expected launch. Importantly, our sales growth translated into operating leverage, driving expansion of our operating income, margin, and net income. ST's operating income increased 60% to $289 million. Our operating margin improved 330 basis points to 12.7%, and our net income increased 73% to $261 million. Turning to our cash and investments, our profitable growth is driving improvements in our net cash from operating activities with an increase of over 36% on the trailing 12 months basis. For the quarter, net cash from operating activities was $360 million. Free cash flow was negative $40 million in Q2, mainly due to two elements: a high level of CapEx in the quarter above the annual run rate of our expected 2018 CapEx range between $1.2 billion to $1.3 billion; and change in working capital, mainly due to inventory increase to support demand in Q3. We expect to return to a positive free cash flow for the third and fourth quarter and for 2018 to generate free cash flow well above the dividend paid during the year. Our goal is to exit 2018 with higher net cash position compared to 2017. Let's move to our product groups' performance starting with Automotive and Discrete. So, during the second quarter, ADG revenues increased 15.2% year-over-year on a double-digit growth for both Automotive and Power Discrete. Operating profit increased by increased by 20.8% (sic) [28.8%] to $84 million, and operating margin increased to 9.7% from 8.7%. On a sequential basis, ADG revenue increased 6.5%. Revenue growth did not immediately translate into an improvement in operating profit and margin during the second quarter. This is mainly due to some temporary manufacturing efficiencies and extra costs in the supply chain. In term of ADG's operating margin looking forward, we confirm that this will be in the low teens for the second half of 2018. Turning to the Microcontrollers and Digital ICs Group, MDG posted a strong year-over-year increase, with revenue up almost 28%. This double-digit sales growth came from both Microcontrollers and Digital ICs. In term of profitability, MDG's operating margin increased sharply year-over-year to 20.3% from 11.7%. On a sequential basis, MDG's revenue increased 4.3%, and its operating margin also expanded. Our Microcontroller business remains the main driver of operating profitability. The Digital business contributed to the operating margin improvements on a sequential and year-over-year basis. We confirm that MDG's operating margin will be about 20% for the second half of 2018. Finally, Analog, MEMS and Sensors. AMS revenues increased 10.7% year-over-year on a double-digit growth for both Imaging and Analog. In term of profitability, AMS operating margin increased to 10.5% from 9.4%. On a sequential basis, AMS revenues decreased 6.4% as anticipated, on lower smartphone activity. Analog and MEMS revenues posted sequential increases. The improved product mix led to a sequential operating margin progression. For AMS, we anticipate second half operating margins to move into the mid-teens as we benefit from revenue leverage, specifically from smartphone application. Let's now discuss how this performance translated in new business and product leadership across the end market we serve. In Automotive, we serve most of the electronic applications in the car, with a particular focus on car electrification and autonomous driving. In car electrification, during Q2, we continued to expand the design win pipeline for our silicon carbide products. And we achieve an important galvanic isolation technology design win for an electrical vehicle. Galvanic isolation is one of the focus areas for us in expanding our portfolio of differentiated high-value products for Industrial and for Automotive. We also continued to win business in more traditional automotive application areas like braking, engine management, and body control. Industrial is a very broad area for us with many customers and many different applications. Here we focus on smart industry, where we built on our leading position in general-purpose 32-bit microcontrollers and on our strong portfolio of power, analog, sensor, and connectivity products. We also deploy our system solution expertise to deliver multiple products and complete solutions. Some examples this quarter include awards for a satellite tolling module and a custom power line modem. Moving to Personal Electronics, our main focus here is on smartphones. In Q2, we expanded our reach with customers, in particular in Asia. We had design wins for time-of-flight sensors, touchscreens controllers, motion sensors, and protection devices. We also won a design win with our STM32 microcontrollers at a key Japanese OEM for high-definition televisions. This is an expansion for us into a new market that was traditionally difficult to penetrate. In Communication Equipment, Computers and Peripherals, we are leveraging our in-house processes in a number of focused application areas. Examples this quarter are designs for fiber optics infrastructure with our BiCMOS process that is optimized for high-frequency communications applications, and an ASIC design for 5G infrastructure with a silicon-on-insulator process that meets the latest cellular RF requirements. Let's conclude with our Q3 guidance. We expect revenues to increase about 10% at the midpoint on a sequential basis. This would represent year-over-year growth of about 16.8%. By end market, in Q3 we expect sequential strong growth in Personal Electronics. We also anticipate solid growth in Automotive, despite the fact that we will normally see some seasonality here. And we are expecting normal seasonality for Industrial. By products, we expect sequential revenue growth to be driven by Imaging, Automotive and Power Discretes. We anticipate normal seasonality in Analog and Microcontrollers. We anticipate a third quarter gross margin at about 40%. This is in line with our communication at our Capital Market Day that in the second half of 2018, we see revenue growth as the main positive driver for the gross margin, substantially offset by the product mix evolution. As a result, we expect to maintain our current level of gross margin, which will drive gross profit increases in line with revenue growth. Adding together the different ingredients, including OpEx discipline, we expect to continue to make steady year-over-year progress at the gross profit, operating profit and net income levels. So, I would like to reconfirm our top priority, deliver our 2018 objective of making another step forward in term of year-over-year revenue growth and profitability. Overall, we are on track with the goals set at our Capital Market Day in May: grow 2018 revenues between about 14% to 17% versus 2017; and in the second half of 2018, ADG operating margin to be in the low-teens, AMS operating margin to be in the mid-teens, MDG operating margin to be about 20%. We are also on track with our longer-term goal of sustainable, profitable growth, to continue to create shareholder value and to make ST an even stronger player in the semiconductor industry. Now we are happy to answer to your questions. Thank you.

The first question is from Achal Sultania from Credit Suisse. Please go ahead. Achal Sultania - Credit Suisse Securities (Europe) Ltd.: Hi. Good morning. Two questions. First on gross margins. Jean-Marc, you mentioned that there is some headwind from product mix as we go into Q3. Just can you give us some color as to – is it one particular product in a high-end smartphone application or is it like multiple products which is impacting gross margin headwind? And then secondly on the inventory, we've seen inventory rise for a couple of quarters now by about -more than $100 million. So just wanted to understand, like is it again – is it driven by just one or two specific projects, or is it broad-based inventory increase across different products? Thank you. Jean-Marc Chery - STMicroelectronics NV: Thank you for the question. So, I address it to Lorenzo and I will make a complement, okay, if needed. Lorenzo Grandi - STMicroelectronics NV: Good morning to everybody. Lorenzo Grandi speaking. About Q3 gross margin, as we said at our Capital Market Day, we have on the gross margin for Q3 definitely in part related to the product mix. In particular, we are growing significantly in Q3 and also in Q4 in Personal Electronic, in particular in smartphone. This growth, of course, from a point of view of gross margin is not accretive. Gross margins will be impacted by this ingredient of product mix. On the other side, we will have a positive effect related to improve manufacturing efficiency that will substantially offset this negative impact. So, that's why we are guiding in the range of 40% as was already anticipated on our Capital Market Day. In respect to the inventory, we grew our inventory. You know that we were smoothing somehow our production over Q2 to fulfill the demand in Q3. We have a strong demand definitely in Personal Electronic, in the smartphone, but as well also in Automotive. We do expect to see a normalization of inventory in Q3 and in Q4. Tait Sorensen - STMicroelectronics NV: That answer your question, Achal? Achal Sultania - Credit Suisse Securities (Europe) Ltd.: Yeah. Thank you. Thanks a lot, Lorenzo. Thanks. Tait Sorensen - STMicroelectronics NV: Okay. Thank you. Next question, please?

The next question is from Aleksander Peterc from Société Générale. Please go ahead. Aleksander Peterc - Société Générale SA (UK): Yes. Good morning and thank you for taking my question. I just have two. The first one would be, if you could come back a little bit on ADG margins that went down despite a sequential revenue growth. You mentioned some input costs there, anything else going on in terms of mix and why exactly that is reversing in the second half? Then, secondly, more general question on how the current trade war rhetoric coming out of the U.S. could influence your perception of risk for the semi industry as a whole for yourselves and for some of your key end markets, particularly in Automotive? Thanks. Jean-Marc Chery - STMicroelectronics NV: Thank you for the question. So, the first one will be answered by Lorenzo, and I will take the second one. Lorenzo Grandi - STMicroelectronics NV: About the deterioration in ADG, there is a not – let's say, not the improvement in ADG. You are right. You know that in ADG, both in Automotive and Power Discrete, we're encountering a very, very strong demand. This strong demand, let's say, we – to follow up this demand, we are investing significantly and we encounter during the quarter some temporary manufacturing inefficiency due to this increase of investment that we have done in order to follow the demand, the investment that are not yet at full speed. And on top of that, we encounter also some increased cost in the supply chain. This temporary inefficiency will be fully reabsorbed in the course of Q3 and definitely also in the course of Q4. So we do expect actually to recover in term of profitability for ADG. And we confirm what we have said at the Capital Market Day that we do expect the ADG to be in the low-teens in the second half of the year in term of operating margin. Jean-Marc Chery - STMicroelectronics NV: About the second question, I have to say that, at this moment, okay, the direct impact on our company is really negligible. However, like a global companies, we are monitoring the situation. First, we are very attentive about any potential impact on our own customers which is, let's say, a normal attention. But if the trade war escalates, we are more concerned, I have to say, about the consequences that this can have on the global macro-environment. But I guess, okay, this is a common concern, well spread across our peers. At this moment, okay, I have no more to add on top of that. Tait Sorensen - STMicroelectronics NV: Thank you, Aleksander. Aleksander Peterc - Société Générale SA (UK): Thank you very much. Tait Sorensen - STMicroelectronics NV: Next question, Moira?

The next question is from Sandeep Deshpande from JPMorgan. Please go ahead. Sandeep Deshpande - JPMorgan Securities Plc: Yes. Thank you for letting me on. My first question is regarding the automotive market and your ramp-up of silicon carbide. Jean-Marc, can you comment on the ramp-up of that revenue – of silicon carbide revenue in the first half of the year and how you see that progressing in the second half? And secondly, with regard to the margin, can I ask a question on the currency that whether the currency – the shift that has taken place year-on-year is impacting your OpEx which is reducing to some extent your leverage associated with the operating margin? Thank you. Jean-Marc Chery - STMicroelectronics NV: Well, thank you, Sandeep. So, I answer the first question and Lorenzo will answer the second question. So I really confirm that we expect our revenue from silicon carbide to be about, okay, $100 million in 2018, and I have simply to say we are on track. Second point, we are engaged, okay, with key players in car electrification, supporting car makers with power modules on a world-wide basis. Today, we have more than 25 project in discussion and I have to say that 85% are about silicon carbide. And as the industry, okay, has been adding capacity, so we are securing what is needed to serve our customer in term of substrate for the short term and we have several silicon carbide substrates, and we are preparing our capital expenditure, okay, for the next quarters and months to support, okay, all the demand we have. So in a nutshell, okay, Sandeep, we are really on track on silicon carbide. And I confirm I am fully convinced it will be important game-changer for the industry. Sandeep Deshpande - JPMorgan Securities Plc: Thank you. Lorenzo Grandi - STMicroelectronics NV: I think the second question was about expenses, the impact of the exchange rate in our expenses. If I look the expenses, yes, indeed – let's say, if I look at on a year-over-year basis, last year our expenses – our effective exchange rate in Q2 was $1.09. This year in Q2 has been $1.19. On the expenses, of course, we had an impact and this impact is in the range of $35 million or something like that. If I look forward, our effective exchange rate moving from Q2 to Q3 is substantially flat because we stay at $1.19 with the current spot rate in the range of $1.17. If I look at Q4, we do expect that with the hedging contract that we have in place to be in the range of $1.18. So I would say that moving forward, there will not be a significant impact on expenses related to the exchange rating if we stay at this level of exchange rate. Sandeep Deshpande - JPMorgan Securities Plc: And in absolute amount, will the OpEx remain at these levels? How do you look at that? Lorenzo Grandi - STMicroelectronics NV: Well, in term of expenses, in Q2 our expenses came up to $622 million, net expenses. This was a little bit higher than what we were anticipating because our range, if you remember, we were more in the range of $610 million and $615 million. Q2 expenses were, I would say, impacted by a couple of one-time events. Actually, we had a loss of credit in one of our jurisdiction, plus some termination benefit costs related to a certain number of our former executives. These two impacts were not in our, let's say, guidance at that times. And if I exclude these two impact, I would say that we were in the range that we were communicating. What it will be – the evolution of our expenses entering in the Q3 and in Q4. Moving in Q3, the expenses will be impacted by two negative effects, let's say, and one positive. On the negative side, there will be the impact of annual salary increase, and this was, of course, a factor in 2017 (27:00) in our model, and also by one-time expenses related to the social charges on vested share that are distributed to our employees that are accounted for the full year in Q3. On the other side, on Q3, we will have the positive impact of the seasonality. You know that in Europe there are a lot of – number of days of vacation. So, we do expect in the range for the next quarter between $615 million and $620 million. When we move forward in Q4, we expect a similar amount with – on one side, let's say, an unfavorable calendar in respect to Q3. That is offsetting by the benefit not to have any longer the social charges. So at the end, we do expect substantially to be in that range Q3 and Q4. Sandeep Deshpande - JPMorgan Securities Plc: Thank you. Tait Sorensen - STMicroelectronics NV: Thank you, Sandeep. Next question, please?

The next question is from Anthony Stoss from Craig-Hallum. Please go ahead. Anthony Joseph Stoss - Craig-Hallum Capital Group LLC: Good afternoon, gentlemen. If you wouldn't mind commenting about your biggest customer in the smartphone side kind of on a year-over-year basis to your total content, I think in the last quarterly conference call you talked about expectations of having more content than a year ago. So I just want to confirm that that's still the case. And then secondly, for Q4, can you confirm that you expect all three of your business segments to grow sequentially in the December quarter? Thank you. Tait Sorensen - STMicroelectronics NV: So, Tony, just as a clarification, I think we – on our previous calls with our largest customer at the time, we talked about having increased revenues, not necessarily content. So, just a clarification there. And then, let's answer that, and then we'll come back to your second question, Tony, just as a clarification. Anthony Joseph Stoss - Craig-Hallum Capital Group LLC: Thank you. Tait Sorensen - STMicroelectronics NV: So, Jean-Marc? Jean-Marc Chery - STMicroelectronics NV: So, can you clarify the second question exactly? Tait Sorensen - STMicroelectronics NV: So, Tony was asking in terms of our largest customer and how that is evolving on a year-over-year basis. Jean-Marc Chery - STMicroelectronics NV: On a year-over-year basis, now, we do not comment at this level of detail, okay, with our major customer because first, we do not comment. However, okay, you know that they will introduce, okay, (29:33) phones, okay? This is well known everywhere. And they will announce it basically in September, and we will see. And our (29:47) is encompassing this acknowledgement. And for the full year, okay, I confirm what I have said during my address, we see year-over-year growth for ST from 14% to 17% end of 2018 versus 2017 well across end market we address and product group. And we are convinced, Personal Electronic end markets and our sensor will basically be in line with this target. Tait Sorensen - STMicroelectronics NV: And, Tony, on your second question, you were asking for Q4 if all the product groups were going to grow sequentially, was that your question? Anthony Joseph Stoss - Craig-Hallum Capital Group LLC: That's correct, Tait. That's correct. Tait Sorensen - STMicroelectronics NV: Okay. That's a Q3 call. Lorenzo Grandi - STMicroelectronics NV: You have to wait for Q4. Anthony Joseph Stoss - Craig-Hallum Capital Group LLC: Just checking to see if you expect a normal seasonality. Lorenzo Grandi - STMicroelectronics NV: I would say that – Lorenzo speaking – that our expectation is to have a growth. At the end, what we do expect for the year, and was mentioned by Jean-Marc just a minute ago, was to be balanced across the various groups. So we expect, let's say, to grow in the range of 14%, 17% with a growth that it's quite balanced across our groups. For sure, let's say, now guiding Q4 is a little bit too early. Tait Sorensen - STMicroelectronics NV: Yeah. I think, Tony, as Jean-Marc already got the question on the trade war and things of that nature, there are some uncertainty out there, so we'll just talk about Q3 on this call. Jean-Marc Chery - STMicroelectronics NV: Now, we... Anthony Joseph Stoss - Craig-Hallum Capital Group LLC: Understood. Thank you. Jean-Marc Chery - STMicroelectronics NV: ...we simply want to be consistent and we are on track again with what we say at our Capital Market Day in May. We will grow this year, okay, between 14% to 17% year-over-year. Anthony Joseph Stoss - Craig-Hallum Capital Group LLC: Thank you. Tait Sorensen - STMicroelectronics NV: Thank you, Tony. Next question, please?

The next question is from Janardan Menon from Liberum. Please go ahead. Janardan Menon - Liberum Capital Ltd.: Hi. Good morning. Thanks for taking my question. Just back on the gross margin side, if I remember, at the Capital Markets Day, you had pulled out both smartphones as well as Discrete as having a mix impact on your gross margin into the second half and you were talking mainly about smartphones just now. So I was just wondering is Discrete also still having a negative impact from mix point of view in the second half. And on those product segments, I was just wondering what the outlook is for gross margins going, let's say, over the next 12, 18 months or so. Is it likely that gradually you will be able to achieve some cost reduction in those product areas which is having the lower gross margin and therefore you could bring those gross margins up, or is it that you would be facing, let's say, price pressure there and the gross margins in those kind of segments are going to be sort of structurally lower than some of your other businesses even on the longer term. And as a follow-up, you said – you pulled out Industrial as being specifically strong in Q2. I was just wondering what part of the Industrial market that refers to. Was it broad or was it predominantly sort of IoT products from the distribution channel or was it something from the larger industrial companies, et cetera? Jean-Marc Chery - STMicroelectronics NV: So, thank you for all the questions. So, Lorenzo will answer the first one, I will take the second one. Lorenzo Grandi - STMicroelectronics NV: About gross margin, you are right. When we were at Capital Markets Day, actually we underline the fact that the gross margin for our Personal Electronics, Specialized Imaging Sensors and also Power Discrete are below the average of the company. The Q3 revenues (33:54) strong contribution coming from these two product family. And as I said in term of gross margin, these are not accretive. On the other side, there are the other products that are improving their product mix inside the various family, contributing, let's say, to mitigate the gross margin impact. On top, we have also improvement in term of manufacturing. The gross margin of the company was enjoying, if you look, at quite a significant growth moving from last year to this year, mainly driven by manufacturing that now is running at full speed, fully saturated. Moving forward, of course, we will work in order to have some improvement that will, for sure, not a big step, but it will be a continuous improvement, as well as we will work on the product mix. Today, the market condition are such that we may, let's say, really work on the product mix, we may work in order to optimize. And so we think that we can somehow to have a mitigation related to maybe the growth of some product family that are not at the average (35:15) gross margin of the company. Anyway, as we said, the progression in term of operating margin will come in short and medium term more from the leverage on the revenues than the improvement in the gross margin. Janardan Menon - Liberum Capital Ltd.: So just to paraphrase what you said, if I look forward, can we assume, let's say, into 2019 that your higher gross – you would expect or try to achieve a situation where your higher gross margin products are growing faster than your lower gross margin products? Lorenzo Grandi - STMicroelectronics NV: No, as I said, let's say, what we see in the short and medium term is to stay in the range of the 40s, let's say, in term of gross margin. Janardan Menon - Liberum Capital Ltd.: Got it. Jean-Marc Chery - STMicroelectronics NV: So about your second question, I would like to say that from a sales channel side, it is really a broad launch, okay, (36:15) through distribution channel or key OEMs, so we don't see a specific point to mention. As far as for the group are concerned, this is the same because, of course, I get you take note our MDG, okay, growth year-over-year. So our STM32 contribute a lot, okay, to this industrial end market growth, but I have to say Analog as well, and it's exactly happening what we expect, okay, leveraging our STM32 but our Analog – strong portfolio in Analog, strong portfolio in Power Discretes and Sensor as well. So simply to say that it is really broad launch from both side channel distribution and our key OEM, and product as well. Janardan Menon - Liberum Capital Ltd.: Understood. Thank you very much. Tait Sorensen - STMicroelectronics NV: Thank you, Janardan. Next question?

The next question is from Jérôme Ramel from Exane BNP. Please go ahead. Jérôme Ramel - Exane BNP Paribas: Yeah. Good morning. Two questions. The first one is, Lorenzo, how should we model the depreciation and amortization going forward? I saw the increase in Q2 and with your strong CapEx you already spent in Q1 and Q2, how should we model for the rest of this year and maybe for the full year? And maybe one question for Jean-Marc. Could you update us on your manufacturing capabilities with the new fab you have qualified with your foundries and the ramp-up in Singapore? Thank you. Lorenzo Grandi - STMicroelectronics NV: I take the question about the depreciation/amortization, Jérôme. Yes, there will be an increase. This year, we model in the range – for the full year, we see this amortization and depreciation in the range of $780 million, $785 million. That may be an increase in respect to last year. And for the second half, it should be in the range – around $200 million, $210 million per quarter. Did I answer your question? Jérôme Ramel - Exane BNP Paribas: Yeah. Thank you. Jean-Marc Chery - STMicroelectronics NV: So, about your second question, well, first about Ang Mo Kio technology transfer... Tait Sorensen - STMicroelectronics NV: Singapore. Jean-Marc Chery - STMicroelectronics NV: Singapore. Yeah. Sorry, Singapore. Ang Mo Kio is the name of – where the fab is located. More clearly, they are on track. They are really doing a fantastic job. Of course, we know very well this fab. So there is absolutely no learning curve, okay, from ST to take back this fab in our Industrial footprint. So they will be perfectly on track to continue to support us on our growth both for STM32 low-power microcontroller and STM8 microcontroller. So this is really a good news. They are supporting us as well on some Power Discrete and Vertical Intelligent Power, and this fab will be really instrumental starting to support the overall revenue growth of ST starting Q4. About our strategy to increase our, let's say, outsourcing for wafer fab which currently are 20% more, as you know, we have decided to outsource now technologies for embedded Flash. 80 nanometer is already done and engage. And we have decided 40-nanometer as well. So, let's say, all the program are agreed and the transfer have started and they will support ST medium term growth in order to mitigate our capital expenditure. And as I told you during my various address, again, to support our next three year growth, ST is not intend to add any additional infrastructures on top of the pilot line in Agrate. And, of course, I also mentioned that we can add an additional capacity in Crolles, but within the current infrastructure. So really I am pleased to say that we are totally on track with our strategy to say ST in term of manufacturing focus on (41:21) processors, standard processors or advanced CMOS processors are totally outsourced, and mixed processors, derivative processors from CMOS or power will be outsourced 50/50 with a flexibility to go up to 80 or to go down 30 according the market situation. So, we are totally on track with this strategy. Jérôme Ramel - Exane BNP Paribas: Thank you. Tait Sorensen - STMicroelectronics NV: Thank you, Jérôme. Next question, please?

The next question is from Andrew Gardiner from Barclays. Please go ahead. Andrew M. Gardiner - Barclays Capital Securities Ltd.: Good morning, gentlemen. Just two quick ones, firstly just to try and address some of the cycle concerns a bit more, I was wondering if you could make a comment on inventory levels you see through the channel, particularly at distribution and whether there's any change there. And also, on the silicon carbide wins you mentioned in Asia and Europe, can you explain where in the car these wins are? Is it just charging? Is it the inverter? Is it both? Just a bit of detail around that would be helpful if you can. Thank you. Jean-Marc Chery - STMicroelectronics NV: So, thank you for your question. So I am pleased to address the question to Marco Cassis. Marco Luciano Cassis - STMicroelectronics NV: Good morning. So on the first question about the level of inventory in the channel, I have to say that, first of all, in Q2, we had a high record level of sales through the distribution channel. And this means that our level of inventory now is very healthy. It's less than three months and so we do not see any increase or dangerous increase of inventory at distribution level. For the silicon carbide, we cannot go too much in detail, but it is... Jean-Marc Chery - STMicroelectronics NV: So, usual subsystem. Okay. You know that silicon carbide power MOSFETs are instrumental between inverters and onboard charger. At ST, we address all the subsystem of the electrical cabinet (43:32). Andrew M. Gardiner - Barclays Capital Securities Ltd.: Okay. Understood. Thank you, guys. Tait Sorensen - STMicroelectronics NV: Thank you, Andrew. Next question, please?

The next question is from David Mulholland from UBS. Please go ahead. David Mulholland - UBS Ltd.: Hi. Thanks. Just two quick questions. Firstly, as you look into Q3, you made the comment that you expect sequential growth in Automotive. And I guess typically it can sometimes be a lightly softer quarter. And in the last couple of months, given what's happening with the new testing cycles and the tariffs, potentially there have been some concerns what would happen from production. So, can you maybe just drill in a little bit to what's giving you the comfort that sequentially the Automotive business can grow? And then, secondly, on the – can you possibly comment on your bookings performance in Q2? What was the book-to-bill in the quarter and how that broke down by product area if possible? Jean-Marc Chery - STMicroelectronics NV: So, I think – I'll take the first one about Automotive confidence level, and you take the second one. Tait Sorensen - STMicroelectronics NV: Yeah. Lorenzo Grandi - STMicroelectronics NV: Okay. Jean-Marc Chery - STMicroelectronics NV: Okay. No, about the first one, we are really confident the demand is really strong on Automotive and again whatever is legacy part of the Automotive application, so body, engine controls, braking, lighting, this kind of stuff. And electrification of the car, as you know, is really moving and pushing, and connected car and ADAS as well. As Lorenzo said a few minutes ago, we have prepared our-self, okay, second half last year and first half this year to support, okay, this growth with our capital expenditure. So that's the reason why our capital expenditure, I confirm, will be in the range of $1.2 billion to $1.3 billion, but is a bit front-loaded in order to prepare this growth of H2 on Automotive. So, our confidence level is very high, okay, to see this end market and our ADG Group to achieve growth consistently, okay, with the overall objective of the company. Lorenzo Grandi - STMicroelectronics NV: And coming to your question about book-to-bill, this confidence is confirm also from the order entry that we see in – during the quarter and we continue to see. Our book-to-bill is above parity – it's quite above parities, 1.1. So it is quite strong, I would say, definitely in the area of ADG, in the area of Power and Discrete. So we see actually a quite strong and healthy demand that, as underlined, make us confident that, that in the third quarter against the normal seasonality we should see Automotive really grow. David Mulholland - UBS Ltd.: Can I maybe just follow up, and just specifically on the seasonality into Q3 because guiding for growth sequentially in a quarter when normally a lot of the European customers' facilities take a bit of a break, I know last year you saw the ADG Group up sequentially, but the two years prior was normally down. So just specifically on Q3, what's different this year and what's driving that? Is it just the structural growth drivers coming through or what's driving the adverse seasonality as such in Q3? Jean-Marc Chery - STMicroelectronics NV: So it is clear that for the fast growing and innovative application, the seasonality effect do not play, okay, because you are growing so fast that absolutely, okay, the car marker and the Tier 1 is they do not slow down their demand. And then again, on the legacy, okay, we are really seeing a strong growth in the legacy because also simply (47:41) of the semiconductor and electronic system. So, the content of semiconductor, especially, okay, with the smart switch, okay, enabled by our Vertical Intelligent Power technology are really moving. So, this year, we see a clear effect that first, the silicon content increasing in the legacy, offset a lot the seasonality effect, and the fast growing application definitively are totally offsetting the seasonality effect. So, that's the reason why we are in this position to confirm that, okay, on Q3 and H2 overall, we will see sequential growth on Automotive and year-over-year growth for the Automotive completely aligned with overall objective of the company. David Mulholland - UBS Ltd.: That's great. Thanks very much. Tait Sorensen - STMicroelectronics NV: Thank you, David. Next question, please?

The next question is from Stéphane Houri from Oddo. Please go ahead. Stéphane Houri - Oddo BHF SCA: Yes. Good morning. This is Stéphane Houri from Oddo. So, I have two questions, if I may. The first one is about the full year guidance that you have reiterated from 14% to 17%. I know it's a call for Q3, but when you look at what it can make for Q4, it gives you anywhere between 1% to 11% of sequential growth in Q4, so if you could give us some more clarity on what you're seeing at the moment for Q4 would be very helpful. And also I have a question about the tax rate, which is particularly low at this moment. So, is there any explanation, and what should we be looking out going forward? Thank you very much. Jean-Marc Chery - STMicroelectronics NV: So, Lorenzo, you can... (49:30) Lorenzo Grandi - STMicroelectronics NV: Yeah. Maybe I take the one of the tax rate. You know that – you're right, our tax rate is quite low, but you have to consider that we have the use of the NOL that is substantially reducing significantly our tax rate. This probably – if you consider, let's say, our level of tax rate, ETR, once this NOL will be, let's say, exhausted, completely use that, and this will be, looking forward, probably in the next year, it will be more in the range of 15%, 17%, our tax rate this year (50:15). Stéphane Houri - Oddo BHF SCA: For next year? Lorenzo Grandi - STMicroelectronics NV: Next year, yes, probably yes, sometime next year when we will learn (50:21). Stéphane Houri - Oddo BHF SCA: Yeah. Thank you. Jean-Marc Chery - STMicroelectronics NV: And about the year-over-year growth guidance, well, we confirm this guidance up to about 14% up to 17%. Clearly, it is a result of the variable we control and variable, okay, we do not control. Okay, I have a question a few minutes ago about the overall trade war and so on. So, today, we simply confirm that, okay. We don't see, okay, a weak signal for the market. We are very confident to grow on Automotive. As anticipated, our Personal Electronic will grow in the second half. We already show a strong growth on Industrial. We will have simply a seasonal effect on Q3. But at this moment, okay, there is, let's say, no reason, okay, to narrow this guidance, and we confirm – but we strongly confirm the guidance, okay, to grow the company year-over-year about 14% to 17%. Stéphane Houri - Oddo BHF SCA: Okay. And about the operating margin guidance improvement of 300 basis points, you talked about steady improvement, but are you confirming the number, the 300 basis points? Lorenzo Grandi - STMicroelectronics NV: Yeah. What we said at the Capital Market Day is that moving from H1 to H2, we envisage something in the range of 360 basis point improvement in the operating margin. Still, we are on track. We work in order to get there, and I think that at this stage, we still have this in our view. So at the end, we confirm what was said a couple of months ago. Stéphane Houri - Oddo BHF SCA: Okay. Thank you very much. Tait Sorensen - STMicroelectronics NV: Thank you, Stéphane. Next question, please?

The next question is from Amit Harchandani from Citigroup. Please go ahead. Amit B. Harchandani - Citigroup Global Markets Ltd.: Good morning, everyone. Amit Harchandani from Citi, and thanks for taking my question. Two, if I may. My first question again comes back to the topic of near-term demand trend. Could you maybe help us understand how the lead times have shaped up across different segments over the quarter? Have they stabilized? Are they coming down, or are they continuing to stretch? And in that context, I would appreciate your thoughts on how are you thinking about where we are in the semiconductor cycle, what are the key variables you are looking at to gauge the sustainability of the demand, for example, on the Industrial side or any of the end markets? That would be my first question, and I have a follow-up. Jean-Marc Chery - STMicroelectronics NV: Okay. So, thank you for your question. So, I am pleased to address to Marco Cassis. Marco Luciano Cassis - STMicroelectronics NV: So on the question about the lead time, what we see is that lead time are now stable and our effort is in giving a good service to our end customers. For the second part of the question, can you repeat... Tait Sorensen - STMicroelectronics NV: It was on the variables of the cycle, is that correct, Amit? Amit B. Harchandani - Citigroup Global Markets Ltd.: Just in terms of how do you internally look at where we are in the cycle, the key variables you look at, and what – how does that give you confidence on sustainability of demand? Marco Luciano Cassis - STMicroelectronics NV: Today, the visibility that we have on our market in term of growth of the market is in the range of 7%, about 7% of the growth of our market in year 2018. Next year, let's say, the last forecast in term of growth of the market is at 5%. Where we stand in the cycle? We think that we – so far, what we see is that we have good and healthy demand, then difficult to say. The projection are what I said, and we don't see sign for the time being of really slowdown of the market. Jean-Marc Chery - STMicroelectronics NV: There's absolutely no weak signal about semiconductor market at least on the end market we address. So, Automotive, Industrial, Personal Electronics, okay, you know this is a specific case with smartphone, showing us that something has happened. So, today we are really fully concentrated, okay, to serve our customer at the base of their demand for Automotive which is where the demand is very, very strong. And for Industrial where the demand is strong as well, driven by secular demand with the initiative, okay, for better process control, better materials control, better facilities control. So, we confirm that Automotive and Industrial are showing secular demand in electronics and at this moment, we don't see any weak signals. Amit B. Harchandani - Citigroup Global Markets Ltd.: Thank you for the color, gentlemen. And just very quickly, a unrelated follow-up, could you share your latest thoughts on M&A, please? During, I think, earlier this month you made a move for Draupner Graphics. Just understanding how you're thinking about M&A at this stage. Thank you. Jean-Marc Chery - STMicroelectronics NV: About M&A, well, clearly, okay, for this goal, today ST plan of record to drive the company in a sustainable, profitable growth, okay? Our strategy is organic growth and we already said that we will make a small acquisition in order to complete our strength in STM32, in Analog mainly. And here, the recent acquisition is exactly, okay, sticking with this strategy. About other M&A, well, as I told you, okay, during the Capital Market Day, the team of ST, myself, we are engaged in a, let's say, strategic plan elaboration, okay? And as I told you during the Capital Market Day, we will come back early next year and, of course M&A, okay, will be a subject we will cover. But, today, I would – simply to confirm, we are totally focused on H2 execution, organic growth, and definitively we have acquired and we could acquire specific smaller IPs or companies in order to make ST stronger. Amit B. Harchandani - Citigroup Global Markets Ltd.: Thank you, Jean-Marc. Tait Sorensen - STMicroelectronics NV: Thank you, Amit. Next question, please?

The next question is from Francesco Previtera from Akros. Please go ahead. Francesco Previtera - Banca Akros SpA: Yeah. Good morning, everybody. A question more general on duties and possible tariff that can be imposed in this source – the trade. Can you have a general comment on this issue in respect with the position of STM? Thank you. Lorenzo Grandi - STMicroelectronics NV: In respect to this, I think Jean-Marc already touched this point in one of the answer before. As we said, there are two folds; on one side, the tariff impact for our company about the tariffs. This is, of course, something – this is not a nice to have because if there is some impact, even if this impact is quite – the materiality of this impact is quite low because it's not really something that is significantly impacting us directly. Of course, there is some concern as I think everybody has in a situation in which, let's say, there is this uncertainty. So far, as we said, notwithstanding this uncertainty related to these, let's say, commercial wars, these kinds of things, we don't see in our reference market any significant sign of – but definitely, it's something that is not welcome in the sense that at the end that may create a turbulence in the business. But so far, I confirm what was said since now, for the moment, we don't see really any significant impact. Demand in Automotive is still stronger and for what concern our company, yes, there is some impact, but really the materiality of this impact is very, very low. Francesco Previtera - Banca Akros SpA: Thank you. Tait Sorensen - STMicroelectronics NV: Thank you, Francesco. Next question, please?

The next question is from Günther Hollfelder from Baader Helvea. Please go ahead. Günther Hollfelder - Baader Bank AG: Yeah. Many thanks. Just one follow-up question on the Automotive market and the seasonal – above normal seasonality you're seeing in the quarter. Here in Germany, there are some issues in car production with Volkswagen, Audi, also Mercedes-Benz, due to this WLTP new test process. So, I understand that you're not seeing any signs here for production cuts or postponements. Or are you saying the net impact is positive if you have other growth which is offsetting this weakness, or aren't you seeing any weakness at all? Marco Luciano Cassis - STMicroelectronics NV: Marco, I will take this. Again, we confirm that we do not see any slowdown or sign of weakness in Automotive. Actually, it's exactly the opposite, the demand is extremely strong and we are doing our best in order to cope with the requirement from the market. So, we confirm again that absolutely there is no sign of slowdown during Q3 in Automotive. Günther Hollfelder - Baader Bank AG: Okay. And maybe one follow-up question on silicon carbide. You mentioned earlier or confirmed a $100 million sales level for 2018. Can you help us to understand the breakdown of this business? Can you say what's approximately Automotive, what is renewables, what is Industrial, including EV infrastructure to get an idea? Jean-Marc Chery - STMicroelectronics NV: For this year, it's fully Automotive. Günther Hollfelder - Baader Bank AG: Fully Automotive, yeah. Okay. Many thanks. Tait Sorensen - STMicroelectronics NV: Thank you, Günther. Next question, please?

The next question is from Robert Sanders from Deutsche Bank. Please go ahead. Robert Sanders - Deutsche Bank AG (UK): Yeah. Good morning. Sorry to come back to the 2018 full year guide again. But if you hit the midpoint of that guide, your year-on-year growth rate would come down to 7% in Q4. Is there something about last year's Q4 that was unusually strong, for example, in Automotive or Industrial that makes that quarter a tough comp? And I have a follow-up. Thanks. Jean-Marc Chery - STMicroelectronics NV: Will you take it, Lorenzo? Lorenzo Grandi - STMicroelectronics NV: Okay. Yes. Okay. As we said, our guidance for the year is between 14% and 17%. If we will have this, let's say, an outlook is (01:02:32) nine quarters substantially, so at the end, they matter. You have to remember that last quarter – in Q4 last year was quite a strong quarter. So, at the end, I think that we will have in next quarter still a growth, still a significant growth. You remember also that we said that we are struggling, let's say, with the level of CapEx between $1.2 billion, $1.3 billion to target somehow the high end of our range, but fine. Yes. At the end, in Q4, we will see growth and we will see sequential growth, quite significant sequential growth. And at the end, for the year, we reconfirm we will be between 14%, 17%, and with the ambition to be maybe a little bit higher than the midpoint. Robert Sanders - Deutsche Bank AG (UK): Great. And just on Microcontrollers, it looks like you're doing about mid-20s EBIT margins in that group, which is a great performance, substantially up year-on-year. And this group now represents 40% of profits. How do you see the opportunity to grow your profitability further in Microcontrollers, maybe as the 32-bit mix rises or through production changes or die shrink? Thanks. Jean-Marc Chery - STMicroelectronics NV: Now I don't want to comment too much further 2018, okay? What I can say, clearly, our Microcontroller business is addressing a mix of industrial applications which are, let's say, for sure based on our STM32. But we address as well some Personal Electronics application. So, overall, clearly, the gross margin is a result of the manufacturing efficiency and this end market and product mix. (01:04:44) you know that Microcontroller supply share is based on a well-balanced internal and external manufacturing, okay? Today, we are clearly close to 50/50, 50% in internal, 50% external. So, 50% internal, as Lorenzo said, we have already done great achievement. We have still opportunity of continuous improvement, but certainly not at the same pace that in the past few quarters because now our manufacturing is fully loaded. And then, okay, for the external manufacturing, definitively it is a link to the wafer price cost decrease we will have. But overall, this is the key ingredient mix between Industrial, which are very strong where you know we want to focus both addressing OEM and through strong distribution channel, Personal Electronics as well but being very selective, and manufacturing will continuously improve both internal and external, but certainly internal not achieving breakthrough as we have done during the past few quarters. So, this is the element we are considering to foresee our gross margin improvement on Microcontroller. Robert Sanders - Deutsche Bank AG (UK): Great. Thank you. Jean-Marc Chery - STMicroelectronics NV: Also, definitively you know that we are today completing our portfolio of STM32 with industrial microprocessor. And clearly, okay, for the future, it will also be a booster consideration for gross margin. Robert Sanders - Deutsche Bank AG (UK): Great. Thanks, Jean-Marc. Tait Sorensen - STMicroelectronics NV: Thank you, Rob. Next question, please?

The next question is from Lee Simpson from Stifel. Please go ahead. Lee Simpson - Stifel Nicolaus Europe Ltd.: Hi. Good morning, guys, and thanks for squeezing me on at the end there. Three quick ones, if I could. I'm just trying to get a handle on the importance of packaging or packaging advantages you may have in silicon carbide, particularly for autos, as rivals seem to be dismissing the need for any new packaging technologies. Second question, I just wanted to clarify, did you say that the inventories reduce in absolute terms in Q3 and Q4, or we just see the DIOs come in a little? And then the third question, it looks when you certainly scan the 3DS space in smartphones that the market is now pivoting much more to stereo vision and we just wondered if that's a trend that you could play into or if that was running counter to your normal time-of-flight focus. Thanks. Jean-Marc Chery - STMicroelectronics NV: So, thank you for your three questions. So, Lorenzo will answer the inventory one and I will answer silicon carbide and 3D depth sensing. Lorenzo Grandi - STMicroelectronics NV: I go straight on the inventory then. I assume that you are referring to our inventory, right, not in the channel. The ST inventory, correct? Lee Simpson - Stifel Nicolaus Europe Ltd.: That's correct. Lorenzo Grandi - STMicroelectronics NV: Yeah. Well, what we see is that as we said, we prepare the growth for the second half. So in Q1 and in particular in Q3, there was a quite significant increase in the inventory. What we do expect is that we will increase in Q3 definitely the turns, so reduce significantly the number of days of inventory. We do not foresee a significant reduction, let's say, in the absolute value of the inventory in Q3, while in Q4 we do expect that to have some reduction. Jean-Marc Chery - STMicroelectronics NV: So, coming back to silicon carbide, it is clear that for the application we address, so inverters and onboard charger, the module, the package is a critical enabler. Well, at simply ST, we apply our strategy. We have the capability to design by ourselves custom design power modules and to enable, let's say, competitive silicon carbide power MOSFET. So, this is what we have done, and we are going now with the success I shared with you a few minutes ago. Then, if we address other application, and I repeat today, we have 25 project and 85% are on silicon carbide, and you know you have a various situation. It's either custom design module or it's total package, total module. If it is total package and module, we use OSATs. So, generally speaking, we outsource. If it is custom designed power module, we are doing by ourselves. So, you have all kind of configuration and this is simply, okay, our strategy. About 3D sensing, well, 3D sensing, okay, clearly, we follow what we consider, let's say, our roadmap. So, you know that ST, we address proximity ranging sensors, but clearly a time-of-flight technology which is based on what we call SPAD, so Single Photon Avalanche Diode, okay, clearly the area of focus of ourselves. And here we have accumulated millions and millions of PCs, and we will continue to address successfully this market. Then on depth 3D sensing, you know and it is not a secret that ST has been a key supplier or pathfinder on this structured light. We have a roadmap. We have all the technology blocks. We have all the capability to continue to sustain successfully. Customer who would like to continue on structured light are to adopt structured light. And here again in structured light, part of the structured light is the components using time-of-flight. So, there is a total synergy between this structured light and the time-of-flight of proximity ranging sensor. Now, okay, still on front facing, we know that in the near future some solution could encompass a time-of-flight, a part of the subsystem, taking place of subcomponent on the structured light. ST is ready, so we will address this market as well, whatever is Android based, smartphone or other operating system. And then for world facing, we know that the critical enabler is time-of-flight and again here we have the adequate conduct (01:12:02) to support. So, we are convinced about that and we are following our conviction, and we will be and we are already successful on this submarket. Lee Simpson - Stifel Nicolaus Europe Ltd.: Thanks so much. Thank you. Tait Sorensen - STMicroelectronics NV: Thank you, Lee. Next question?

The next question is from Adithya Metuku from Bank of America. Please go ahead. Adithya Metuku - Bank of America Merrill Lynch: Yeah. Good morning, guys. I have three questions. Firstly, just on the Automotive Group revenues across the board, can you confirm what was the growth rate in the quarter, not just in ADG, but across the group as a whole? Then secondly on silicon carbide, there've been some news flow that Tesla is asking for price cut to their suppliers. So, how do you see this impacting you going forward? And more generally, when you look at the silicon carbide market, can you give us some color on any pricing changes that you're seeing in this market? And finally, just on – as a follow-up to a question on modules earlier, you said that you're working with partners on standard modules and you're designing your own custom modules. So, how is this different to your – to what happened with IGBT modules? I remember four, five years ago you were trying to get into this space. You didn't really have a lot of traction there. So, why do you think this time it will be different? Thank you. Jean-Marc Chery - STMicroelectronics NV: Well, I take some question and Lorenzo will take the question about the growth. Lorenzo Grandi - STMicroelectronics NV: Growth in ADG... Jean-Marc Chery - STMicroelectronics NV: Yeah. Yeah. Well, on module for the – your last question, okay, well, clearly here we have a key differentiating factor, is the silicon carbide because I repeat today, ST is a unique supplier able to produce mass production on silicon carbide. So, we consume, okay, about 60% of the worldwide supply chain of raw material silicon carbide. So, clearly, the key enabler in our success with a power module using silicon carbide is the silicon carbide technology. And as we have the capability to make modules custom design, okay, most of them make our success. And in the future, we're able to continue with the same determination. Well, then, I am very sorry, but I absolutely cannot and does not want to comment any commercial discussion or transaction, okay, about price with our customer, okay? It's totally out of our, let's say, habit to do it. And then, okay, on the silicon carbide price, more than, let's say, a general statement, okay, you know this technology is a innovative one. You know this technology is going very fast. All the actors worldwide have to invest important amount of CapEx to support the growth. And clearly, all the actors worldwide who will participate to this huge market because again, I am convinced it will be a game changer. We have our mind that, okay, the price will be go down according the usual roadmap to support Automotive and Industrial markets. So, there is nothing new here. It is clearly, well, let's say, medium, long-term roadmap for silicon carbide. About the short term, okay, I do not want to comment. Lorenzo Grandi - STMicroelectronics NV: In respect to the last question, if I well understood that the question was about our trend of sales in Automotive overall. As you know, we have revenues in Automotive, not only in ADG group, but is across others – groups inside the company both in AMS, in MDG. What we see, let's say, today, in the first half of the year, our growth was in the range of 17% year-over-year, H1 2018 compared to H1 2017. What we expect is to be substantially the same level for H2, even slightly improving. So, means that for the full year, we see a growth that will be higher than the average of the growth of the company. Definitely, we'll be on the high side of our range, 17%, slightly above. Automotive is strong. Adithya Metuku - Bank of America Merrill Lynch: 17% in Automotive, did I hear you correctly or? Lorenzo Grandi - STMicroelectronics NV: Yeah. Yes, overall, let's say, including all the sales in Automotive in all the groups. Adithya Metuku - Bank of America Merrill Lynch: Yeah. Understood. And just a quick follow-up to Jean-Marc. So, on SiC MOSFETs, you said that is the main advantage for you at this point. Can you give us some idea as to where your advantages are coming in the MOSFET space? Just any color there would be helpful. Thank you. Jean-Marc Chery - STMicroelectronics NV: For silicon carbide? Adithya Metuku - Bank of America Merrill Lynch: Yes. Jean-Marc Chery - STMicroelectronics NV: Well, for silicon carbide, today, in production, it is, let's say – we start with diode, then we have MOSFET. So, this is a second generation. So, we have adopted, okay, a technology architecture which, let's say, help us to go very fast on the market, and we have cooperated, okay, with a important partner in order to introduce the technology very fast. So, clearly now, we are accumulating a know-how and a learning curve, which definitively is providing a competitive advantage of ST, first, to develop the third generation, okay, with trench and to be able to introduce soon, okay, this third generation in production. So, I say our, let's say, main competitive advantage is based on the fact that we have developed and worked on innovation since a long time on silicon carbide. We have taken the risk to introduce very early in the market, thanks to our cooperation with an important partner. And now, we are ramping up successfully because you know ST is an IGM (01:19:01), okay, so we have manufacturing capability well-recognized. We have the capability to fix very fast, okay, all the extrinsic or intrinsic issues we can face. And now, okay, our control of the technology is really a state-of-the-art. So, we are pushing and this, let's say, early adopter and pathfinder attitude make ST now in a stronger position compared to the competition. Tait Sorensen - STMicroelectronics NV: Thank you, Adi. We're going to move to our last question, please?

Today's last question is from Gianmarco Bonacina from Equita. Please go ahead. Gianmarco Bonacina - Equita SIM SpA: Yes. Good morning. Just a quick follow-up question. In terms of the OpEx, just to confirm if I understood correctly. So, you will have about – you had about $10 million of one-off cost in Q2 and you will also have about $10 million one-off OpEx cost in Q3. So, for the year when we model for 2019, we should consider that in 2018 you had about $20 million of cost which are kind of nonrecurring in nature. Is that right? Thank you. Lorenzo Grandi - STMicroelectronics NV: Just to clarify, when I was commenting Q2, 90% is, yes, we had something in the range of $10 million that is not recurrent. When I was commenting Q3, I said that in Q3 we have the, let's say, salary increase. The top cost is – every year it happens. We have, let's say, a one-time expense related to the social charges on vested share. It means that these are the yearly expenses that it happen in Q3. So, it's something that these are recurrent every year, but in Q3, let' say. And this is significant. And what I said, I said that we expect that we have expenses in Q3 in the range of $615 million, $620 million, a similar expenses in Q4. Gianmarco Bonacina - Equita SIM SpA: Okay. So, these should be considered a kind of run rate. Lorenzo Grandi - STMicroelectronics NV: Yeah. We are having in that. Gianmarco Bonacina - Equita SIM SpA: Okay. Okay. Thank you. Tait Sorensen - STMicroelectronics NV: Thank you, Gianmarco. Tait Sorensen - STMicroelectronics NV: At this point, we'll go ahead and conclude our Q2 2018 earnings call. Thank you. Jean-Marc Chery - STMicroelectronics NV: Thank you. Lorenzo Grandi - STMicroelectronics NV: Thank you.

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