I would like to welcome everyone to the Semtech Fiscal Year2008 Third Quarter Results Conference Call. (Operator Instructions) Thank you Mr. German,you may begin your conference.

Good afternoon ladies and gentlemen and welcome to SemtechCorporation’s Fiscal Year 2008 Third Quarter Conference Call. I’m Todd German, Director of InvestorRelations and we have just released unaudited results for our third quarterthat ended October 28, 2007. For the next 45 minutes or so MohanMaheswaran, Semtech’s President and Chief Executive Officer and Emeka Chukwu,our Chief Financial Officer will be discussing those results and answering yourquestions. Before I turn the call over to Emeka, I want to remindeveryone of the following notices. First, this call is open to all interested parties in accordance withthe Reg FD. If you have any questionsabout our future performance or our estimates of future financial results wewill consider them now. We are unable tosay whether there will be another Reg FD compliant opportunity for you to askquestions before the next quarterly conference call. Second, this conference call will include forward lookingstatements as defined by SEC rules. Forward looking statements are statements other than historicalinformation or statements of current condition and relate to matters such asfuture financial performance, future operational performance, the anticipatedimpact of specific items on future earnings and our plans, objectives andexpectations. Some forward lookingstatements may be identified by use of terms such as expect, anticipate,intend, estimates, believes, projects, should, will and plan. Forward looking statements involve risk and uncertaintiesthat could cause actual results to differ materially from those projected. These risks and uncertainties includeworldwide economical and political conditions, the timing and duration ofsemiconductor market upturns or downturns, demands for cellular phones,personal computers, automated test equipment, demand for semiconductor devicesin general, demand for the company’s products in particular, competitor’sactions, supply from key third party suppliers and assembly contractors,manufacturing costs and yields, relations with strategic customers and risksassociated with the businesses of major customers. In addition to considering these risk and uncertainties,forward looking statements should be considered in conjunction with thecautionary statement contained in the risk factors section and elsewhere in ourannual report on Form 10K for the fiscal year ended January 28, 2007 and ourother filings with the SEC and in material incorporated therein byreference. In light of the risks and uncertainties inherent in forecastof revenue and gross margin and other projected matters, forward lookingstatements should not be regarded as representation that the company’sobjectives or plans will be achieved or that any of its operating expectationsor financial forecasts will be realized. Semtech reports results based on generally acceptedaccounting principles commonly referred to as GAAP. This quarter we have also made reference tocertain non GAAP measures. These nonGAAP items are provided to enhance your overall understanding of our comparablefinancial performance between periods. In addition, management generally excludes certain items in managing andevaluating the performance of the business. As a further reminder, the third quarter results wepublished today in our press release are subject to customary quarterly reviewby our independent auditor and should be considered preliminary until we fileour quarterly report on Form 10Q. Although a reply of this call will be available on theinvestor relation section of our website, we assume no obligation to update orrevise any forward looking statements whether as a result of new information,future events or otherwise. Thanks foryour attention to this important preliminary information and I will now turnthe call over to Emeka Chukwu, Semtech’s CFO.

Thank you Todd. Goodafternoon ladies and gentlemen. Today weannounced that we have reached settlement with the last of the three insurancecompanies we sued to recover amounts we paid in fiscal year 2004 to resolve acustomer dispute. The insurance companyhas agreed to pay us the sum of $6.5 million in three installments in fiscalyear 2009. We expected recognize theentire amount in income in our fourth fiscal quarter in 2008. We expect the recognition of the recovery netof legal expenses to contribute approximately $0.07 to our fully diluted gapearnings per share in the fourth quarter. Please refer to the Form 8K5 earlier today for the full details of thesettlement. Now, moving on to our Q3 financial performance. Let me begin with our Q3 orders. Orders were very strong in Q3 resulting in abook to build greater than 1. Thestrength was broad based driven by all of our target segments with theexception of the computing segment. Revenues for the third quarter for fiscal 2008 we’re $78.6 million, a23% increase from this same quarter last year and an increase of 17% from thesecond quarter. These strengths were duedramatically to demand for our computing, handheld, industrial and consumerelected products. Revenues for the thirdquarter were derived from the following geographic regions: 21% came from customers located in NorthAmerica; 13% from Europe and 66% from Asia. Net [inaudible] orders accounted for 35% ofshipments during the quarter. Revenuesby end market were as follows: revenuesfrom handheld accounted for 27% of revenue; computing accounted for 24% ofrevenue; test equipment accounted for approximately 1%; communications infrastructureaccounted for 15% and industrial accounted for 33%. Our revenue growth was broad based, all theend markets with the exception of test equipment saw sequential growth. Revenues from OEM sales representedapproximately 38% of total revenues for the third quarter. Wide distribution represented approximately52% of total revenues. Non GAAP gross margin for the third quarter of fiscal 2008was 55% which was at the high end of our guidance. It was down 40 basis points from the secondquarter of fiscal 2008. This decline wasdue to a higher mix of computing power management revenue. In the fourth quarter we expect an increaseof our gross margin in the range of 55.5-56% as well as revenue mix shift toproducts with higher margins. As areminder, our gross margin model is 55-56%, we still expect to exit fiscal year2009 at the midpoint of this range driven mostly by revenue from new products. Non GAAP research and development expenses were $10.2 millionfor the quarter. This represents 10% of salescompared to 14.1% in the previous quarter. We expect R&D spending to increase by approximately $300,000 in thefourth quarter mostly for expenses associated with new products. Non GAAP SG&A expenses were $14.4 milliondollars for the quarter, flat from last quarter. This represents 10.3% of sales compared to21.5% in Q2. We expect SG&A spendingin the fourth quarter to increase by approximately $200,000 driven by theaddition of new sales and application engineers. Interest and other income was $3.1 million in the thirdquarter. For the fourth quarter weexpect interest and other income of approximately $3.1 million. The company’s non GAAP effective tax rate forthe third quarter of fiscal year 2008 was approximately 10.8% compared to 25.6 in the second quarter of fiscal2008. This rate was lower than expecteddue to the impact of a favorable regional revenue mix, favorable tax treatmentin foreign jurisdiction for all realized currency exchange activity associatedwith the weaker dollar relative to our guidance going into the thirdquarter. These factors contributedapproximately $0.05 to both our GAAP and non GAAP fully diluted earnings pershare. Obviously, on a go forward basisgiven the one time nature of some of these factors we do not expect our taxrate to remain at such low levels. Weexpect our non GAAP effective tax rate for the fourth quarter of fiscal year2008 to be 20.8%. As a reminder, theactual rate can vary from the forecast based upon geographical mix of ourincome and other factors such as those previously mentioned. The diluted share count for the third fiscal quarter was66.3 million shares. The lower sharecount reflect the impact of the accelerated stock buy back announced by thecompany during the second quarter. Weexpect diluted share count of 67.5 million shares in the fourth quarter offiscal 2008. This forecast can varybased on the average stock price for the quarter, stock option exercises andthe actual level of stock buy back on the accelerated stock buy backprogram. On a non GAAP basis, excluding the impact of stock basedcompensation, the amortization of acquisitions related intangibles, legallyexpenses related to the SEC investigation, legally expenses associated withSemtech’s now settled insurance litigation and independent shareholderlitigation expenses, net income was $19.4 million or $0.29 per diluted sharefor the third quarter. Net income forthe same quarter last year was $14.1 million or $0.19 per share. For the second quarter for 2008 net incomewas $13.5 million or $0.18 per share. Weexpect non GAAP earnings in the fourth quarter of fiscal 2008 to be in between$0.24 and $0.25 per diluted share. For the third quarter, equity compensation was lower thanexpected at $4 million, flat from the second quarter of fiscal 2008. This quarter’s lower than expected amountsreflect a high level of forfeitures than regionally anticipated. We expect equity compensation to resolve to anormalized amount of approximately of $4.7 million in the fourth quarter offiscal 2008. Our GAAP tax rate was 1.7% for the third quarter of2008. As discussed earlier, our thirdquarter tax rate benefited from a favorable mix of regional income, favorabletax treatment in Switzerlandas related to the weakening US dollar. We expect our GAAP tax rate for the fourth fiscal quarter of 2008 to be15.7%. Our GAAP net income for the quarter was $16 million or $0.24per diluted share, up from $6.3 million or $0.09 per share for the same quarterlast year and up from net income of $9 million or $0.13 per share for thesecond quarter of 2008. Including thefavorable impact of the settlement of our insurance litigation we expect GAAPnet income of $0.25-$0.26 per diluted share in the fourth quarter. Turning to the balance sheet Semtech ended the quarter withapproximately $266 million of cash and investments on the balance sheet. Our cash and investment grew by approximately$31 million during the quarter. Duringthe third quarter the company spent approximately $700,000 on property plantand equipment. The depreciation andamortization for the third quarter was approximately $2.5 million includingapproximately $275,000 of intangible amortization. In the fourth quarter we expect capitalspending to be approximately $2 million this including capital spending is tosupport the expected production ramp of new products, from products in our poormanagement and advanced communication and sales in businesses and to supportthe increased supply ramp of our power discreet products. We expect the depreciation and amortizationto be approximately $2.5 million in the fourth quarter. The days sales are standing in accounts receivable improvedto 35 days in the third quarter from 47 days in the second quarter. In absolute dollars net inventory increasedby $2.5 million in the third quarter as compare to the second quarter of fiscal2008 in linewith the increased demand for our products. However, our days of inventory decreased 60 days from 63 days in thesecond quarter of 2008. In absolutedollars we expect inventory in the fourth quarter to be flat so slightlyup. In summary, this was a very solid financial performance inthe third quarter. I will now hand thecall over to Mohan.

Thank you Emeka. Goodafternoon everyone. I will discuss ourQ3 fiscal year 2008 product group performance and then our Q4 fiscal 2008 yearoutlook. Q3 of fiscal year 2008 was anexceptional quarter for Semtech. We achievedthe highest orders and highest revenues in any single quarter in the company’s47 year history. Both these achievementsmark significant milestones for the company. Semtech’s revenues grew sequentially by 17% - $78.6 million and on anannual basis Q3 fiscal year 08 grew 23% versus Q3 of fiscal year 07. Non GAAP EPS grew sequentially by 61% andgrew 53% on an annual basis to $0.29 per diluted share. We are very pleased with both our revenue growth and EPSgrowth in Q3. Four of our fivebusinesses grew sequentially and two of our businesses also achieved recordhigh revenues. We saw improvements inoverall demand from the handheld, computing, industrial and consumersegments. Overall, non GAAP grossmargins came in at 55% which was at the high end of guidance and is at the lowend of our gross margin model. Now, let me discuss the performance of each of our productgroups. Our power management businessincreased revenues sequentially by approximately 26% in Q3. This is the third consecutive sequentialincrease in this business after almost three years f decline and is again, oneof the highlights of our Q3 results. Theincrease in our power management revenues was driven by the computing segmentand the general consumer systems segment. Our power management business is executing much better and we arestarting to see the result of this improved execution. In Q3 we introduced several new powermanagement platforms that are already gaining attraction in market with severaldesigns. These new platforms include ourlatest [inaudible] driver platforms for Noble LCD panels, LCD TVs and smallersized LCD panels used in handheld devices. For Q4 and the early part of fiscal year 2009 we expect to releaseseveral more new power management platforms that will enable Semtech toparticipate in a much larger SAM. Thefocus of these new platforms will be the handheld, the consumer and theindustrial segments. Although there arestill some execution improvements to be made we are making good progress in ourpower management business. We areconfident that the momentum from our new products will drive further revenuegrowth and margin expansion in fiscal year 2009. Given that our fiscal Q4 is a seasonallysofter quarter for computing, handheld, and consumer systems we expect ourpower management revenues to be approximately flat to slightly down in Q4. Our protection business increased revenues sequentially byapproximately 23% in Q3. Q3 was anotherrecord revenue quarter for our protection business. This increase was driven by stronger demandfor our protection products from the handheld, computing and industrialsegments. This increase in demand forour protection devices is being driven by the increase in the number of portsrequiring protection and the increase in ESD protection requirements across abroad range of end markets. In additionto the very strong revenue growth, we also released product extensions to ournew protection platform targeted high speed IO ports for cell phones, GPSsystems, notebook computers and other portable systems and we also released theindustries first 2.5 volt protection device designed for lightening surgeprotection on Internet and other high speed interfaces. Our protection business unit continues toexecute quite superbly and strategically we are investing to ensure we cancontinue to grow from the strong position we have today. We are very encouraged by the designingmomentum of our protection products across all our target markets. Due to our Q4 being a seasonally flat quarterfor handhelds and computing we expect our protection revenues to beapproximately flat sequentially in Q4. Our power discreet revenues were up approximately 4%sequentially in Q3 and again, achieved another revenue record. We are delighted with the execution withinthis business unit and our customers continue to aware us increasingopportunities as we support their already supply constrained demand. This business is driven by demand by theaerospace, military, industrial and high end medical markets. Our focus on improving our supply trooper isdriving an ability to service unfulfilled demand in these market segments. Wewill continue to see growth in this part of the business and expect our powerdiscreet revenues to increase in Q4. Revenue for the advanced com and sensing business increasedsequentially 7%. The strength in thispart of the business driven by increasing demand for our advancedcommunications products. We are pleasedat the product initiatives from our advanced com and sensing business as wehave recently introduced several new platforms targeted at the industrialwireless and the industrial sensing markets. These platforms include our SSX1211 RF transceiver platform for very lowwireless sensing systems and our SSX8724 ultra small sensing platform targetedat pressure sensing, temperature sensing and magnetic sensor applications. We also have several new platforms that arein the pipeline that will further our position in the advanced timing segmentand consumer analog segments. Soliddevelopment execution on our new road map is critical to the future success ofour advanced com and sensing business as we expect these new platforms topositively accelerate the top line and drive further operating leverage. The business from these new platforms isexpected to contribute in the second half of fiscal year 2009. In Q4 we expect revenues from our advancedcommunications and sensing business to be approximately flat Our test and measurement revenues were down 60% in Q3. The demand in the AT segment continues to bevery soft. The recently decline in thetest and measurement business has negatively impact our gross margins but, wedo expect the test and measurement business to increase modestly in Q4. We also continue to see tier one customerinterest in our new integrated pin driver cobalt platform however, we do notexpect to see meaningful revenue from this platform until the second half offiscal year 2009. From a distribution POS standpoint in Q3 of fiscal year 08we saw total POS increase nicely. The POSincrease was driven by all segments with the exception of the [inaudible]. Distributor inventory declined modestly inQ3. Moving on to new products; we released 17 new products inQ3. Our new product development teamcontinues to flow well in all of our businesses however, this is still an areawhere our execution can be further improved and we are focused on making theseimprovements. The quality anddifferentiation of our new products is significantly better than some of ourhistorical products. Designs wins fromthese new products should start to enhance our new product revenue and overallgross margins in fiscal year 2009. Turning to design wins. Werecorded over 789 new design wins in Q3 which represent another solid designwin quarter for the company. The designwins were once again well balanced across several of our product groups andregions. With the new platforms we haverecently announced we expect to see a continuation of the strong design winmomentum in the future. Let me know comment briefly on the settlement of ourinsurance litigation that we announced earlier today. The settlement of this lawsuit which has beenongoing for several years is another major milestone for the company. The settlement and the chapter can only bedescribed as a non value added but necessary distraction for Semtechmanagement. With this chapter now closedand the distraction now gone, Semtech management can focus more attention onother matters such as further execution improvement. We are very pleased with this closure. Finally, the change in culture at Semtech is enabling thecompany to perform at a much higher level. I am quite comfortable that the execution of the company will continueto improve and will further accelerate as we hit critical milestones in Q4 offiscal year 08 and Q1 of fiscal year 09. Now, let me discuss our outlook for next quarter. While Q3 was a spectacular quarter forSemtech including record orders, record revenues and a 61% sequential growth innon GAAP earnings per share, or 33% sequential earnings for share growthwithout the one time tax benefit we have seen a modest slow down inNovember. The orders are still veryhealthy but this slight softening gives us some cause for concern for growth inQ4. We are therefore guiding for Q4revenues to be flat to down 4%. Toobtain the mid range of our Q4 guidance or down 2% we need in net term ordersof approximately 31% of revenue at the beginning of Q4. We expect non GAAP EPS to be between$0.24-$0.25. The priorities for Q4 are continuing to drive our newproduct release machine, to ensure that our new platforms are released on time,continued realignment of our global sales team including higher some moredirect sales people in specific locations and starting to focus on gross marginexpansion in the company through the introduction and designing of newplatforms. I will now hand the call backto the operator and Todd, Emeka and I would be happy to answer any questions. Operator?

(Operator Instructions) Your first question comes from RickSchafer with CIBC World Markets.

Hi guys, this is Dan Morris calling in for Rick. Nice quarter. Just looking at gross margins it looks like it did come in at the highend of your expectations as you mentioned. Can you talk a little bit about maybe why that was so?

This is Emeka. It’sactually very simple, as we have tried to state previously gross margin ishighly dependent on the mix of revenue for us. What we saw going in the quarter we didn’t expect our protectionbusiness and our communications business to come in as strong as they actuallydid. So, that was the key driver for uscoming in at the high end of the guidance.

Okay. And, you know,in terms of maybe look at the PC segment which obviously, was pretty strong, intalking about any of the incremental share gains that you are getting there,how much of that was related maybe to some of those supply constraints thatpeople have been talking about?

Well, our computing business is quite broad, I mean it isnot just power management, it is protection as Emeka pointed out, ourprotection business is doing very well in the computing space and then in thepower space we tend to play really only in peripheral areas, we’re not goingafter some of the kind of more commodity areas which I think are the major kindof supply constraint areas. So, I thinkmost of our business in the power spaces is really quite robust and driven moreby end demand versus other suppliers not being able to supply.

Okay. Great. And lastly, could you talk a little bit aboutthe order strength that you saw, if it has continued into Q4, maybe how itstracking compared to your expectations and seasonality?

Well Q3 was an incredibly strong quarter. Obviously, we had record orders and recordrevenues so expecting it to continue at that rate is probably unrealistic. So, I would say Q4, the orders have softeneda little bit, some of the lead times are a little bit longer than Q3 but, stillfairly healthy and that’s why, you know, as we guided flat to down 4% but turnspercentage required is fairly reasonable.

Could you quantify what those turns are?

We said 31% at the beginning of the quarter. So as we came into Q4 we needed 31% to hitthe midpoint of our guidance.

Thank you.

Your next question comes from Doug Freedman with Am TechResearch. Douglas Freedman –American Technology Research: Hi guys, thanks for taking my questions. Nice results on the quarter but, clearly Ithink the focus is going to be on what you guys are seeing going forward. With the order slowdown that you’ve seen thusfar in the quarter Mohan can you give us a little bit more color on if youwould characterize it as season? Or, isthis something that you think is more of a demand related issue in yourcustomer base?

Yeah, I would characterize it more as seasonal, Doug. I mean from my perspective we had very strongQ3, you come into Q4, you know, towards November, end of November and intoDecember timeline, most of our customers are kind of waiting to see what isgoing to happen at Christmas, I think and, you know, if Christmas is good wemay see a pick up of the orders in January. So, this is not really abnormal from my perspective. I’ve seen this in the consumer space, I’veseen it in the computing space, I’ve seen it in the handheld space so, it couldchange very quickly and because we had very strong orders in Q3, you know, justI still think the orders are very healthy still it’s just a little bit ofsoftening and a little bit more lead time on the orders there. Douglas Freedman –American Technology Research: Speaking of lead time, where did they run and how did theytrack in the quarter?

Lead times right now are roughly eight to 12 weeks andthat’s not too far off what they were last quarter. Douglas Freedman –American Technology Research: Okay, so pretty stable. And, are you seeing any cancellations?

No. And with your 31% turns required to make the quarter, thatwas at the beginning of the quarter. With four weeks to go how much of the turns were you able toachieve? Or, are you still looking forsort of turns? You know, with an eightto 12 week lead time I’m thinking that new order turns are going to be half theline up with the available inventory?

Yeah, we don’t give that number out, Doug. So, all I can say is that the record quarterwe had in Q3 with the guidance we’re given in Q4 we feel it’s still a prettystrong quarter for us. Douglas Freedman –American Technology Research: Okay. Moving on justreal quickly, you mentioned some strong design wins, can you highlight whetherthose design wins if there’s any change in the weighting the design wins thatyou’ve seen? Is it more eschewed towardssay the handset market? Consumer? Industrial?

The one thing that I can say about that is we are gettingmore design wins now in the handhelds and tower which we’ve had a little bit ofa time where we haven’t had a lot of success there. From our protection business, it’s fairlybroad, I would say that the design wins continue to do quite well in handheld,consumer, communication and industrial and one of the pleasing areas isadvanced com and sensing area. We’restarting to get some very attractive design wins in the industrial sensing andindustrial wireless space as well. Douglas Freedman –American Technology Research: Alright. Terrific. And, my last question,are you, you know clearly the world is worried about macro recession comingacross and hitting the USand possibly spreading to other markets. Are you seeing any signs of that show up in your customer base and theway they are behaving? Are you seeingany sort of changes in new product introduction, schedules or urgency forproduct deliveries or sampling? Anythingthat you can give us as far as what you might be seeing as sort of earlyindication of soft of a softening environment out there.

Well, the only thing is what I said is on the orders being alittle bit softer than Q3. everythingelse still seems to be very robust. Thedesign win momentum seems to be robust, the demand forecast that we have isvery robust for Q4 and we, as we look at it, we look at it, you know, prettymuch every week, it still seems very healthy. Customers are fairly bullish about the handheld computing space, theconsumer space and what is going to happen during the Christmas period. So, I think it’s just those macro economicfactors kind or put everybody on their kind of nervous end but, we don’t reallysee that from our customers. Douglas Freedman –American Technology Research: Alright. Terrific. Thanks so much guys andcongratulations on a strong quarter there.

Thank you.

Your next question comes from Harsh Kumar with MorganKeegan.

Hey guys, a couple of questions. Kind of continuing along the same lines,Mohan when did you start to see signs, you described the environment and ordersto be modestly slow, when did you first start seeing that?

I would say probably the second week of November.

Okay, fair enough. Then, on computing guys, you said computing would be off a little bit inthe January quarter. Mohan, do you thinkthat is just a broad market or are you guys strategically moving out ofcomputing? Can you help us with anyinsight what’s going on there?

Well, the computing sector, you know, I think in Decemberone would expect it to be softer a little bit and our computing power space,when we look at the Q4 timeline we expect it to be flat to slightly down fromthe seasonality standpoint. The questionis what happens after that and what happens in January and it may come backstrong as I talked about. Again,depending on what happens in Christmas time. So, I think it is seasonality driven, I don’t think it is anythingspecific to us or what we talked about, although computing power isn’t astrategic focus for us, obviously the protection business is doing well incomputing as well so as we look at that market place we have to track verycarefully what it is doing from a seasonality standpoint.

Got it Mohan, that’s helpful. Also, a couple of detail, kind ofhousekeeping questions. Did you givewhat power management is as a percentage of revenue, Mohan?

It’s actually 30%.

30%?

Yep.

Okay. That’s whereyou’re seeing it being from flattish to slightly down in Jan quarter Ithink? Would you be in a position togive us what your new platforms or your new product revenues are, the areas youare getting ready to enter into Mohan in perhaps the later this year?

Well, I talked about some of the new platforms we came outwith. I would say that those areplatforms that put us into the same space that we’ve been in. some of the new platforms we have coming outand we haven’t released them yet, Harsh so I don’t want to talk about them yetbut, they will take us into new SAM so, new opportunities that we haven’thistorically played in or it’s been a long time since we played in them in aneffective way. So, I think those are themost exciting areas but, I’ll talk about them when we’ve released them.

Fair enough. And lastquestion, legal expenses were at $1 million. What should we be thinking about legal expenses for Jan quarter?

Are you thinking about the legal expenses for the SECinvestigations?

Correct.

I think we should see, I still expect it to be at the $1 millionlevel.

Right at that level. Thanks. Thanks guys.

Thank you.

Again, if you would like to ask a question please press starone on your telephone key pad. Your nextquestion comes from Jeff Rosenburg with William Blair & Company. Jeff Rosenburg withWilliam Blair & Company: Good afternoon. Didyou say whether or not the weakness that you’re seeing is broad based or in anyspecific areas that are notably weak?

I would say that it is fairly broad based, mostly the computing and handheldmore so than industrial and com but, I would say that it is fairly broad. Jeff Rosenburg withWilliam Blair & Company: You know, I guess the seasonality for the company as a wholehas been pretty inconsistent over the years and are you concerned at all thatperhaps there’s been some inventory accumulation that you’re now workingthrough given how strong business has been the last couple of quarters? I mean, how do you feel about that and theconcern about whether or not your lead times, if they come in at all whether itwill take a little longer to work through this and it’s hard to predict howlong it would be or what do you feel about that?

Yeah, I don’t feel concerned at all about inventory. When I look at the channel inventory forexample, POS is very strong in Q3, inventory came down in Q3, channel inventorycame down so, to me I think that is maybe an indication of end of year clean upand things like that. My expectation isthat if Christmas is robust that January will come back and we’ll see the pickup again. Jeff Rosenburg withWilliam Blair & Company: Are the segments that you’re talking about, hand held andcomputing, aren’t those sold more direct as opposed to thru the channel?

No, a lot of that business also goes through distribution. Jeff Rosenburg withWilliam Blair & Company: Okay. Then, just acouple of other detailed questions. Justgiven the way that the tax rate is looking in Q4, is that a tax rate that weshould look to for 09? Or, is it moreback up in the mid 20s?

I would expect the number for 09 to be slightly up from theQ4 tax rate because we’re not going to see the benefits that we’re seeing thisquarter and next quarter so, I probably expect something in the range of 22-23%for 09. Jeff Rosenburg withWilliam Blair & Company: Okay. Then also, you talked about your ability to grow thebusiness with limited growth and operating expenses and your executing to thatbut, there is some growth there. If welook at, kind of the estimate I have of low double digit revenue growth herefor 09, I mean, what sort of operating expense growth do you think you canmanage in that sort of environment?

Well, our goal is always usually to limit our operatingexpense to less than half of our revenue growth, you know. But, as we have said before we still believethat we can achieve our 09 climbs without increasing our operating expensessignificantly. Jeff Rosenburg withWilliam Blair & Company: So, even less than that half is obtainable then in the nextyear?

Yeah, that is possible. Jeff Rosenburg withWilliam Blair & Company: Thanks a lot.

Your next question comes from Russ D. Moore with DeutscheBank. Bob Gujavarty –Deutsche Bank: Hi this is Bob Gujavarty for Russ D. Moore. Good quarter guys. Just a couple of quick questions, do you seeany difference in how OEMs are acting relative to dis or, are they both kind ofa little bit cautious?

I would say they both are a little bit cautious. We don’t see the OEM, as much being cautiousand when you see distribution you look at the metrics and for example, the POSincrease going up and inventory not going up inline with that gives you alittle bit of concern of are they seeing something out there that, you know, isnot clear from a demand standpoint with the OEMs? But, I would say it is pretty even. Bob Gujavarty –Deutsche Bank: Okay. Then, your turnguidance at 31% is that pretty normal for, you know, with a calendar fourthquarter with the holidays and stuff? Itseems a little low, I mean, a bit conservative given the previous quarters.

Yes. Our previous quarter, last quarter we needed 36% turnsto hit the midpoint. In Q2 I think weneeded about 43%, so yeah it’s a little bit lower and as I pointed out it ismostly because of a little bit of softening in the booking just giving us alittle bit of concern about whether December is going to be as healthy as wewould like it to be and need it to be and January, depending on what Christmasis like, how that is going to play out. So, it’s a little on the conservative side but, I think it’s the right guidancefor us. Bob Gujavarty –Deutsche Bank: Okay. Thanks guys.

Your next question comes from the line of Steve Smigie withRaymond James. Steven Smigie -Raymond James: Great. Thankyou. Guys can you hear me okay?

Yes. Steven Smigie -Raymond James: I apologize, I missed a little bit of the call. I was hoping to hear a little bit about whereyou guys said about [inaudible] start in the quarter. How do you think about that next quarter andalso to a certain extent, it’s become a significant portion of your business,how do you think about managing that going forward? Is it that you just allow that to grow asfast as it will? Or, do you have to dosomething to keep it from becoming just a big percentage of revenue.

First of all, Q3 was another record for our protectionbusiness and then we believe it will be flat in Q4 mostly because it is drivenby handhelds and computing mostly. But,it’s a fairly broad based business. Youknow we have a lot of inroads into the consumer space with LCD TVs and[inaudible], in the communication space on the Internet site and voice over IPand GPON and then on the industrial side in security and industrials. So, in addition to handhelds and computing,it’s a pretty broad based business and the key to that business for us is justcontinuing to execute very well. We’vedone very well in terms of bringing out new products and making sure that ourcustomers understand the benefit of Semtech protection versus everybody else’sprotection out there. This is a businessthat has taken us in our 47 year history, it has taken us many years to growand develop the type of value that we bring to the market. So, if we just continue to do that, I thinkwe’ll be fine. Steven Smigie -Raymond James: Okay. Assuming youcan talk a little bit about the size of that market where you see your marketshare in the size of that market and then, obviously, competitors can getaccess to this call but, to the extent that you are willing, what do you thinkhas allowed you to be so successful in this market? What’s your competitive advantage?

Well, the protection time is huge. You know, and that’s one of the key things,it’s a very large commodity piece of that. So, I think what we have done successfully and will continue to dosuccessfully is as the market transitions and the requirements change so, someof the different voltage requirements or lightening protection, or differentports for different interfaces changes, we’re able to bring out protection devicesthat meet the needs of our customers and you know, it’s really a question ofhow do we grow into that very large time and keep making sure that we have anincreased piece of it. So, relatively,in the scheme of things we have a very small percentage of share. Steven Smigie -Raymond James: Okay. I guess, areyou willing to comment on your competitive advantage here?

Well, the competitive advantage is when you look at Semtech’shistory and the core value that we have as a company, you know, we grew updoing these very discreet diodes. If youlook at our power discreet business for example, you ask the question, why arethere only two competitors in that space? And, it’s because it is very, very tough stuff to do and it takes a long,long time to develop the recipe and it’s one of those things where you can havea competitor come in and try to replicate over many, many years and it may takethem a long time and a lot of investment and it may not be worth their return. So, that’s really the reason why we’re sosuccessful in protection. Steven Smigie -Raymond James: Thanks a lot. Iappreciate it.

Thank you.

Again, if you would like to ask a question, please pressstar one on your telephone key pad. Yournext question comes from Kelly Pan with Pantheon Capital.

Hi, yes. There’s beensome question about slowness in Innerskilll’s power management products and Ijust wondered, could you talk about market shares by business line?

Well, we don’t talk about market share by businessline. Obviously, in the power spacewhich is really what you’re referring to in the computing space, our share isvery small. I mean, we don’t really viewthat as a strategic market for us, as I talked about before. The computing power space is the lowestmargin part or our business and is the one business that really brings ourmargins down as a company. So, I talkquite openly about how we are trying to move away from that space. We continue to plan it, we have good productsin that space, you know, where we have the opportunity to bring thatdifferentiation to the market and then we do that.

I could ask it a different way. Of your power management and your protectionbusinesses, how much are competitive bids versus where you are designed in?

Well, every single one of our products is a design win typeof product. We don’t, I mean, veryrarely do we go in and win a piece of business just by quoting a price. That’s just not Semtech’s game. We can’t win on price. I mean when we go to participate against TIand Ridgetech and other guys out there that have fabs or are willing to takelower margin then, we know we’re going to lose that business. So, we have to bring value to the table andthat is the game we play.

Well, could you just give some color as far as overallwhether the tenure of the market by the different product lines?

Say that again?

The strength or weaknesses that you are seeing by productline? You did mention that the ATE seemsto be very weak.

Yeah. All of ourproduct lines, I mean, are showing strength. Four of our five product lines grew sequentially so, our powermanagement business grew sequentially, our protection management business grewsequentially, our advance com business grew sequentially and our power discreetbusiness grew sequentially in Q3. So,all of those four areas driven by the computing segment, by the handheldsegment and by consumer and some industrial is the reason why those fourbusiness product lines grew so much. TheTMB, test and measurement business, really declined, it was the one area ofdisappointment and that was driven by the ATE softness in Q3.

How about the advanced communications?

The advanced com business grew 7% in Q3, driven mostly bystrength in the advance com space. Weare seeing some nice business there from our historical sense product line andwe are starting to get good traction in the industrial sensing and industrialwireless space also.

Thank you.

We have a follow up question from Harsh Kumar with MorganKeegan.

Hey guys. Just realquick a couple other companies have mentioned that they suffered because of thepower outage at one of the foundries [inaudible]. Curious if that was a factor, if at all, foryour company, Mohan?

Not really. One ofthe things that we were fortunate with is that it happened in the first week inour fiscal Q4 and the company recovered very nicely and we’re back on track sono real impact for us.

Okay. Greatthanks.

Yournext question comes from David Wu with Global Crown Capital

I’msorry, I’m late at getting on. But, Idon’t know whether you’ve talked about your outlook for next quarter which isessentially flat to slightly down and I was wondering other than seasonaleffect what would lead to that guidance?

Well,it’s mostly seasonal David but I think the reason why we guided that way isbecause we have seen a little bit of softness in bookings and the softness hascome in the form of order lead time being a little bit longer than in Q3. Now, I’ve said and I want to be clear aboutthis, the bookings are still very healthy and we’re comparing with Q3 which wasa record revenue and record bookings quarter for us. So, it is still very healthy but I thinkgiving guidance flat to down 4% is the prudent thing for us to do.

Isee. Okay. Have the lead times come in or stayed out?

Thelead times, you mean the order lead times?

Yes.

Orderlead times have moved out slightly.

Oh,I see. And, your delivery lead timeshave they gone out?

No. They remain pretty much the same.

Thankyou.

You have a follow up question from Kelly Pan with PantheonCapital.

Yes, I’m sorry. Youhad talked about the number of shares out because of the accelerated buy backprogram. What will it be for nextquarter? I didn’t catch that.

The guidance is for it to come in at 67.5 millionshares.

Is that a sequential increase from Q3?

Yes. Q3 came in at66.3 million shares.

And, can you talk about what that’s from?

What’s driving it? You know, we have to make a lot of assumptions in coming up with theguidance. We make assumptions on whatthe stock prices is going to be, we make assumptions on what the level of stockbuy back is going to be, and so after looking at the assumption it just showsthat we expect the share count to increase in Q4.

I see. Even with thebuy back?

Yes, even with the buy back. Do recall that with the accelerated stock buy back we get all the shareswere given to us and they were retired. They were already reflected in our share count as of the end of Q2 andQ3.

Thank you.

And there are no further questions at this time. Mohan do you have any closing remarks?

Yes. Let me summarizeby saying that Q3 was a really strong and memorable quarter for Semtech. We increased revenue sequentially by 17% toachieve a company record and increased non-GAAP EPS sequentially by anoutstanding 61%. We also achieved recordquarters in the history of the company and increased our cash balance by $31 million. In addition, we saw four of our fivebusinesses increase revenue sequentially and saw strong continued design winmomentum. I still believe that there ispotential upside to our performance in both execution improvement and strategicpositioning of our new product platforms and so I remain very optimistic aboutthe future of Semtech. With that, I wouldlike to thank everyone for participating in our third quarter conference calland look forward to updating you all next quarter.

This completes the conference call.