Perry Hayes – SVP, IR Charles Liang – Founder, President, CEO and Chairman Howard Hideshima – CFO

Alex Kurtz – Merriman Curhan Ford Michael Burns [ph] – Kennedy Capital Glenn Hanus – Needham & Company

Ladies and gentlemen, thank you for standing by. Welcome to the Super Micro Computer, Incorporated Third Quarter Fiscal 2009 Conference Call. The company’s news release issued earlier today is available from its website at www.supermicro.com. In addition, during today’s call, the company will refer to a slide presentation that is made available to participants, which can be accessed in a downloadable PDF format on its website at www.supermicro.com in the Investor Relations section under the Events and Presentations tab. During the company’s presentation all participants will be in a listen-only mode. Afterwards, security analysts and institutional portfolio managers will be invited to participate in a question-and-answer session, but the entire call is open to all participants on a listen-only basis. As a reminder, this call is being recorded Wednesday, April 29th, 2009. A replay of the call will be accessible until midnight, May 13th by dialing 888-203-1112 and entering a conference ID number of 4711643. International callers should dial 719-457-0820. With us today are Charles Liang, Chairman and Chief Executive Officer; Howard Hideshima, Chief Financial Officer; and Perry Hayes, Senior Vice President, Investor Relations. At this time, I would like to turn the conference over to Mr. Hayes. Please go ahead.

Good afternoon and thank you for attending Super Micro’s conference call on financial results for the third quarter fiscal year 2009, which ended March 31st, 2009. Before we begin, I’d like to advise you of upcoming investor conferences where Super Micro will be presenting. The company will be presenting and meeting with investors and analysts at the Kaufman Brothers Cloud Computing Conference on May 27th in New York and at the UBS Global Technology & Services Conference on June 10th in New York. By now, you should have received a copy of today’s news release that was distributed at the close of regular trading. A copy of it maybe accessed on the company’s website. As a reminder, during today’s call the company will refer to a presentation that is available to participants in the Investor Relations section of the company’s website under the Events and Presentations tab. Please turn to slide 2. Before we begin, please note that during the course of this conference call, management will be making forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may relate, among other things, to our expected financial and operating results, our ability to build and grow Super Micro, the benefits of our products and our ability to achieve our goals, plans, and objectives. Such forward-looking statements are subject to a variety of risks and uncertainties that would cause our actual results to differ materially from those anticipated. These include, but are not limited to, the current economic uncertainties, our dependence on continued growth in the markets for X86, blade servers and embedded applications, increased competition, difficulties of predicting timing, introduction and customer acceptance of new products, poor product sales, difficulties in establishing and maintaining successful relationships with our distributors and vendors, shortages or price fluctuations in our supply chain, our ability to protect our intellectual property rights, our ability to control the rate of expansion domestically and internationally, difficulty managing rapid growth and general political, economic and market conditions and events. Most of today’s presentation will refer to non-GAAP financial results and outlook. For an explanation of our non-GAAP financial measures, please refer to slide 3 of this presentation or to our press release published earlier today. And now, I’d like to turn the call over to Charles Liang, Chairman and Chief Executive Officer.

Thank you, Perry and good afternoon everyone. Please turn to slide 4. Super Micro’s revenue in the third quarter was $109.5 million or 19.0% over last year. Non-GAAP net income was $2.4 million or 59.2% over – compared to last year. Super Micro’s non-GAAP earnings per share was $0.06 diluted share compared to $0.15 last year. The third quarter was seriously influenced by the global economic recession during which IT spending declined sharply. In addition, the quarter was marked as the preparation of Intel’s Nehalem CPU launch. For that reason, IT managers have been waiting for the new technology before ending their budget and this had an impact throughout the whole quarter. While it is difficult during this recession to accurately forecast when a bottom may be reached, however, we believe that because of the technology transition that is underway and because of our strong new product line that worst should be behind us. I would like to share with you a number of innovative architecture and new product lines, which will place Super Micro in a strong position for the coming quarters. First, the new Intel Nehalem (inaudible) launch. Please turn to slide 5. As we have said previously, Super Micro has been leading ahead for a Nehalem solution, which occurred on March 30. This is one of the most significant introduction of CPU technology, impacting server hardware that we have not seen in the past two-and-a-half years. We are excited about our new technology and we expect the advantage of Nehalem in terms of memory and I/O performance, power efficiency, and processing speed will be strong compelling reasons for IT managers to adopt our Nehalem solution. As we have said in the past, Super Micro has been made available with the broadest product line in the industry for the Nehalem launch. At the time of the launch we had approximately 80 SKU of motherboard products, 30 plus chassis models, and more than 32 plus server SKU available. Having this quantity of building block available at the launch allows us to showcase our special uniqueness in the industry. No other company can offer a number of application optimized server solution as can Super Micro. We already have over hundred of application optimized solutions ready and the number is growing. By optimized application solutions we mean that we can offer customization, for example more I/O and storage memory, great memory capacity, higher efficiency, or extremely power-saving design in a cost-optimized fashion. These application optimized solutions are developed to address all server markets including datacenters, enterprise, scientific and engineering, medical and high-performance computing. Our past experience with technology transition of Intel’s CPU demonstrates that our preparation has been rewarded with larger growth in our business. One of the hallmarks of Super Micro has been our technology development and our time to market. We are well prepared for this launch and we expect our new product will do well in this technology transition. Second, our 2U Twin2 product line. Please turn to slide 6. We have launched our 2U Twin2 product line just recently and just started shipping in volume. During this big show, our 2U Twin2 has been recognized as the breakthrough product because of the four independent hot-pluggable DP nodes. : Third, our GPU optimized workstation and server solutions. Slide 7 please. We had recently developed a GPU (inaudible) optimized architecture to address the needs of high performance computing and virtualization applications. These applications are typically used in the field of oil and gas exploration, research labs, defense, and medical. : As we have said, we are a technology company at our core and we invest heavily in research and development to stay ahead of our competition. Recently, we also have been working on another exciting new product that will be launched in upcoming quarters. This new product will further enhance our sever product line and make for more total solutions from Super Micro. : And third, embedded product. We will extend our penetration of the cost-effective server applications with the Intel atom-based design. AMD, Istanbul. We will start shipping our AMD, Istanbul-based product also since this quarter. In summary, our R&D effort has provided us the best product lines in the industry. As you can see from our financial report, we have cut spending in other areas to fund our R&D investments. We feel that our focus on technology innovation clearly differentiates Super Micro from the competition and is the foundation of our success. It is our long-term strategy to continue to invest in developing computing technology and innovation products that promote the market share gain, bring awareness, and a strong ROI performance. History has shown that during market upheavals, companies that continue to focus on R&D had a better chance of future when market recovers. Now, we have strong new line of products that give us a great opportunity to increase our market share, as well as extend our product line to new markets. We believe that our strategy of being the leader in server technology innovation will be worthy to our shareholders. With that, let me hand it over to our CFO, Howard Hideshima for the financial details. Howard?

Thank you, Charles, and good afternoon everyone. I will focus my remarks on earnings, gross margin, operating expenses, and similar items on a non-GAAP basis, which will reflect adjustments to exclude stock compensation expenses. Reconciliation of GAAP to non-GAAP is included in the financial statements of the company in today’s earnings release and in the supplemental detail in the slide presentation accompanying this conference call. Let me begin with a review of the third quarter income statement. Please turn to slide 9. Revenue was $109.5 million, down 19.9% from the same quarter a year ago and down 14.8% sequentially. Revenue for the nine-month period was down 2.4% from the same nine-month period a year ago. Slide 10. The decrease in revenue was fairly widespread among our customer base, which we believe was caused by the global economic downturn and the effect it has had on IT spending, as well as the technology transition. The proportion of revenue from server systems was 39% of total revenues, which was an increase from 35% a year ago and down from 41% last quarter. ASP for servers was down from about $1,300 per unit last quarter to about $1,100 per unit. The decrease in server products was primarily due to a decrease in shipment of our 6000 series. During the quarter, components decreased due to decreases in chassis, which resulted in less pull-through of serverboard. For the nine-month period, components and server revenues were down 3.9% and 0.1% respectively over the same nine months a year ago. We continue to maintain a diverse revenue base with none of our over 400 customers making up more than 10% of our net sales in the third quarter. Furthermore, 59.8% of our revenues came from the US and 65.9% from our distributors and retailers channel. Internet datacenter revenue was 12.1%, which is an increase from the prior quarter of 7.9%. Slide 11 and 12. Gross profit was $16.5 million, down 34% from $25 million in the same quarter last year and down 32% from $24.2 million sequentially. On a percentage basis, gross margin was 15%, down from 18.2% a year ago and down from 18.9% sequentially. Price changes from Ablecom resulted in a negative 2-basis point change to gross profit in the quarter, with total purchases representing approximately 18.1% of total cost of goods sold, which is down from the 27.4% a year ago and 22% sequentially. The year-over-year decrease in gross margin resulted from lower margins across our product line due to competitive pressures as we grew market share during the economic downturn combined with a mature product line that is transitioning to the new Intel Nehalem CPU, which was launched on March 30th. This was partially offset by our inventory reserves being lower year-over-year due to our improvement of inventory management to reduce excess and slow-moving inventory through product conversion and increasing sales efforts. The sequential decrease in gross margin resulted from the same influences of the pressures from the economic downturn and the product transition to Nehalem, as well as an increase in inventory reserves. Slide 13. Operating expenses were $14.6 million, down from $15.6 million in the same quarter a year ago and down from $15.6 million sequentially. As a percentage of revenue, operating expenses was 13.4%, up from 11.4% year-over-year and up from 12.2% sequentially. Operating expenses were lower on an absolute dollar basis both year-over-year and sequentially. We saw both year-over-year decreases in absolute spending in sales and marketing, as well as G&A expenses. Sequentially, we saw a decrease in R&D expense, which could have been lower except for a delay in a project caused us to defer in NRE credit. Headcount decreased by one sequentially. Overall, our third quarter operating expenses are evidence of our tight control on spending during this economic downturn. Operating profit was $1.8 million or 1.6% of revenue, down $7.5 million or 80.2% from $9.3 million a year ago and down from $6.8 million or 78.5% sequentially. Net income was $2.4 million or 2.2% of revenue, down from $3.5 million or 59.2% from $6 million a year ago and down $4.3 million or 63.8% from $6.7 million sequentially. Our non-GAAP fully diluted EPS was $0.06 per share, down $0.09 from $0.15 per share a year ago and down $0.11 from $0.17 per share sequentially. The number of fully diluted shares used in the third quarter was 38,893,519. The tax rate for the third quarter on a non-GAAP basis was a benefit of negative 44.3% compared to 36.4% a year ago and 20.8% sequentially. The tax rate was primarily affected by the reinstatement of the Federal Reserve and research and development tax credit and an adjustment to reduce a higher level of tax reserve than is currently warranted. We expect the effective tax rate to be approximately 30%. Turning to the balance sheet on a sequential basis. Slide 14. Cash and cash equivalents and short-term and long-term investments were $77.4 million, up $2.5 million from $74.9 million in the prior quarter. In the third quarter, free cash flow was a positive $3.2 million and a net change in cash was a positive $2.4 million. For the nine-month period, free cash flow was a positive $10.7 million and the net change in cash was a positive $11.2 million. Accounts receivable increased by $3.2 million to $42.8 million and DSOs were 35 days, an increase in four days from the prior quarter. Inventories decreased by $6.2 million to $82.9 million, with days in inventories increasing by one day to 85 days. The company continued to make progress in managing inventory in the quarter while preparing for product launches such as Nehalem and 2U Twin2. Accounts payable decreased by $5 million to $60.5 million as the days payable outstanding increased by five days to 62 days. Overall cash cycle days were 58 days, an increase of 10 days from the 48 in the prior quarter. During the quarter, we spent approximately $200,000 to repurchase about 55,000 shares of common stock. To date, we have spent about $2 million to repurchase approximately 445,000 shares of the 2 million shares authorized by the Board at an average price of $4.56 per share. Now, for a few comments on our outlook. As indicated previously, the third quarter was difficult due to the global economic downturn and a technology transition. Many economic reports suggest that we could be reaching a bottom within this economic downturn. The Nehalem processor launch was done on March 30th. As a result, we do expect improving conditions surrounding the adoption of both newer CPU platform and our newest product line. Therefore, the company currently expects net sales for the quarter ending June 30th, 2009 in a range of $117 million to $127 million. Assuming this revenue range, the company expects non-GAAP earnings per diluted share of approximately $0.08 to $0.11 from the quarter. It is currently expected that the outlook will not be updated until the release of the company’s next quarterly earnings announcement. Notwithstanding subsequent developments however; the company may update the outlook or any portion thereof at any time. With that, let me turn it back to Charles for some closing remarks.

Thank you, Howard. Before I turn the call over to questions, I would first like to thank all of our dedicated engineering team at Super Micro. Your hard work and commitment to our strategy of being the most innovative and always the first-to-market company has built Super Micro into a technology leader. The dedication of our employee to build the best product portfolio in the industry to our customer, like the hot-pluggable 2U Twin2, the dual GPU in 1U and four GPU in 4U solutions, and the strong Nehalem product line give me great confidence that our future will be strong and bright. Now, let me turn the call back to Perry.

Operator, at this time, we are ready for questions.

Thank you. (Operator instructions) And we will first go to Alex Kurtz with Merriman Curhan Ford. Alex Kurtz – Merriman Curhan Ford: Good evening, gentlemen. Can you hear me okay?

Yes.

Yes. Alex Kurtz – Merriman Curhan Ford: Okay. So, Howard, just real quick on the housekeeping item. Did you give the unit volume for server components and servers in the quarter?

We did not. Alex Kurtz – Merriman Curhan Ford: Could you share that with us? You have it on you?

Yes, let me come back to that question. Alex Kurtz – Merriman Curhan Ford: Okay. And then the ASP of the server components would be great too. So, just looking at your guidance, expecting sequential growth into June, could you just go into detail what gives you guys that visibility and that confidence because last couple of quarters have been challenging for you guys. Do you have a real sense that a good chunk of business has been pushed out because of Nehalem and you really expect it to fall in the June quarter?

Yes. Because Nehalem, a big product line, just updated on March 30th, right? So, only true data available to us for last quarter. So, now we have a complete Nehalem product line available with the brand new architecture I just mentioned, 2U Twin2, which has been very attractive to all customers. So, we strongly believe that business in this quarter will surely be better than last quarter. Alex Kurtz – Merriman Curhan Ford: Okay. And Howard, on the OpEx line, are you guys taking any actions there to lower your OpEx going into the June quarter?

Yes, I think as we talked about on the call, we have lowered OpEx expense by about $1 million sequentially and we are not stopping there. We are taking further actions to reduce our costs while continuing to invest in the technology that’s setting us apart from the market. Alex Kurtz – Merriman Curhan Ford: So, would that come out of G&A or marketing, like where would you find it?

I think you are going to see it all the way across the board. Alex Kurtz – Merriman Curhan Ford: Okay. And guys, what have you seen in the first couple of weeks here or in the first month of April? How has activity been compared to March?

Basically, we see the signal is quite positive. Alex Kurtz – Merriman Curhan Ford: Okay. Okay and Howard, I’ll step aside here, but do you have those numbers yet?

Yes, I’ve got at least the server numbers right now, 39,000 compared to 41,000 last quarter on the units per server unit. Alex Kurtz – Merriman Curhan Ford: Okay.

And ASP, I did give it at $1,100 versus $1,300 last quarter. Alex Kurtz – Merriman Curhan Ford: Okay. And the server components?

I’ll get back to you on that one in just a second. Alex Kurtz – Merriman Curhan Ford: All right, no worry. Okay. Thank you, guys.

Our next question, then, is from Michael Burns [ph] with Kennedy Capital. Michael Burns – Kennedy Capital: Yes, good afternoon gentlemen. Just a couple of questions on – what I wanted to explore with you guys about is where the gross margins will trend, so where do you think the pushes and pulls are on that? I mean, obviously the fees are down a little bit, lower utilization and that kind of thing, but what do you think that picture looks like over the course of the year as you start to see ramp in the newer products? And if you can speak in even just relative terms on some of the newer products versus some of the ones that are maybe seeing end of life or something else? What the margin difference is going to look like between those two things?

Yes. Basically, I mean from our history, whenever Intel has a new CPU unit chipset, in that quarter or next couple of quarters we have a better margin and we have a good chance to grow our revenue. So, this time no different than before expect this time the chance, the difference can be bigger, because for every two years Intel has a big new launch. This time, indeed, it’s more than two years, about two years and ten months. So for the energy accumulator there for Super Micro, indeed have been more than before. And this new product, for sure – I mean, we will have a better margin. Michael Burns – Kennedy Capital: Okay. So Charles, if you want – I don’t know if you can really put any sort of numbers around that, but if you would, just a relative sense, and would you see margins there between newer and older products, would they be 20% better or – I mean, just some sense around that? I mean, is it something where you are going to see substantial hundreds of basis points improvements or – I’m not going to pin you down for something in the next quarter or like that, but just – what’s the potential for you guys to fill in there?

Howard, do you have the most – probably the numbers?

Yes. I think Mike, if you look back in history back about over two-and-a-half years ago when we did the Woodcrest MP launch, that after a time, I think proceeding that quarter you’ll see about a point or two differentials as we release the new product. Michael Burns – Kennedy Capital: Okay.

So, I think if I take you back historically, if this result holds the same, we saw about a 1% to 2% increase in gross margins as we ramped a new product with the new technology. Michael Burns – Kennedy Capital: Okay. And that pretty much would be from mix and your products. So and then as you think about sort of overall utilization improvements as we pick up volumes, I mean could you – do you think you can pick up another couple of hundred BPs from that as well and get you back toward that range you guys were sitting in before over the last 18 months or so?

Yes, you know that our production expenses quite frankly are quite low. So the influence of utilization is not quite as high at this company as in other companies. Michael Burns – Kennedy Capital: Okay.

Okay, but we are taking other cost measures to make sure – and working with our vendors very diligently to make sure that we can improve ourselves. Michael Burns – Kennedy Capital: Okay. Fair enough. And then just on the R&D side, you talked on the – in the presentation about several new groups of products and honestly, some things that looked like they’d really sort of expand your addressable market. Couple of things I wanted to ask you about that. One is particularly for the atom-powered embedded stuff, I mean do you see that as really being incremental to – in your current business or is there something where you are maybe going at the margin and cannibalize a little bit of what you have currently?

: Michael Burns – Kennedy Capital: :

It’s hard to say, right? All the way from 10% to 30%, but it really depends because the – again, the visibility of today’s poor economical climate will make us try to be conservative. Michael Burns – Kennedy Capital: Okay. Fair enough. And then last question in terms of – you guys have talked about controlling expenses, which you have done a job with, but continuing to spend on R&D, which is great. How much of your R&D spend is going towards some of these more incremental product lines? And Charles, I don’t know if you and I have ever talked before about to what your hurdle rate is on – what you needed to see back as a return on that spend for R&D before you really approve a project for that. I mean – but, if you can talk about how you kind of approach that, I’d appreciate it.

Okay, yes. Basically in the last two quarters, we saw most of the competitors cutting their R&D expense, their engineering team size. But here, we did not. Indeed, we continued to grow, decided to grow in our engineering (inaudible) and the good thing is now we have a complete, big Nehalem product line ready, 2U Twin2, a new architecture is completed, ready for volume production. Our GPU product line will be ready for production this quarter and Itanium product line will be also ready this quarter. So, yes, our R&D expense in last couple of quarters will kind of – we will see some results from this quarter especially. And of course, we already have such a strong product line ready now. So, in next couple of quarters we do not have a plan to continue to grow our R&D expense basically. Basically, we have de-saturated here for R&D expense. Michael Burns – Kennedy Capital: Okay. So, I should expect to see some leverage across the R&D line then into the fall?

Yes. Michael Burns – Kennedy Capital: Okay.

And Michael, I’d just remind you, like I said, again, we pride ourselves on our building block base. So, a lot of these things have been developed and we are just retuning these things. So, it’s not incremental or it’s more cost efficient for us to develop new products than many of our competitors, which have brand new designs. Michael Burns – Kennedy Capital: Okay. Fair enough. Thanks gentlemen.

(Operator instructions) We’ll next go to Glenn Hanus with Needham & Company. Glenn Hanus – Needham & Company: Good afternoon. Could you talk at all about blades and how you are doing in ramping up blades?

Okay. I mean our blade products, indeed, have been growing very steadily even in this poor economical climate. Our blades over this year, I believe will be a 2X to 3X growth. So, that kind of growth, indeed, I personally feel pretty good kind of given the economical condition and we will introduce indeed a Twin blade very soon. And also high-end switch for blades, high-end switch for – independent high-end switch to the market. So, overall, our blade product should be a very successful one, although we did not see a big revenue yet. Glenn Hanus – Needham & Company: Okay. So you are looking for a sequential growth there in the next couple of quarters?

Yes. We should be seeing growth for a couple – the next couple of years as well. Glenn Hanus – Needham & Company: And then on the new product launches, can you give us sort of the timeframe that each of these and the kind of relative, which is the biggest and which is sort of some relative size to think about in terms of revenue contribution?

Okay, for sure. Nehalem, lots of big things for Intel and especially for Super Micro. And then, 2U Twin2, because it’s a brand new architecture, a hot-pluggable 2U Twin2, some customers call this product low cost to operate, but gives lots of features like a blade server, but cost-wise much lower. So, 2U Twin2 hot-pluggable feature, we believe a great potential. : Glenn Hanus – Needham & Company: :

Okay. For storage, right? We will introduce the Super SBB storage-free space. We call it a super set, because by industry standard only operates UPs, unit processors. Super Micro is so far the only company with a product dual processor, SBB platform. And the launch day I believe will be around June and quantity will start to ramp up around June. Again, this quarter we don’t see a – we won’t see a SBB revenue, but next quarter, September quarter, we will see that. Switch, high-end switch product, again we started sampling some switch about one month ago and the quantity is ramping up. So again, the switch product and the SBB product won’t grow quickly, but relatively would be like our Superblade kind of consistent growth, but growth for long term. Now, this thing is our investment for those high-end storage and switch products are pretty much already there. So basically, we don’t need to spend extra money for those product developments. Glenn Hanus – Needham & Company: Thank you.

And it appears at this time we have no further questions in the queue. I’d like to turn the conference back to Mr. Liang for any additional or closing comments.

Thank you everyone for joining us today and we look forward to talking to you again in the – at the end of the quarter. Thank you everyone. Have a great day.

Thank you. Ladies and gentlemen, this does conclude Super Micro, Incorporated third quarter and fiscal 2009 conference call. We do appreciate your participation, you may now disconnect at this time. Thank you.