Tait Sorensen – Director, IR Carlo Bozotti – President, CEO and Chairman Philippe Lambinet – Chief Strategic Officer and SVP, Home, Entertainment and Displays Carlo Ferro – SVP and CFO Didier Lamouche – COO

Gareth Jenkins – UBS AG Kai Korschelt – Deutsche Bank Janardan Menon – Liberum Capital Sandeep Deshpande – JPMorgan Simon Schafer – Goldman Sachs Didier Scemama – RBS Capital Odon de Laporte – Cheuvreux Francois Meunier – Morgan Stanley Tristan Gerra – Robert W. Baird Jerome Ramel – Exane BNP Paribas Peter Testa – One Investments Dinos [ph] – Citi Cody Acree – Williams Financial Niels de Zwart – ING

Good morning or Good afternoon. This is the Chorus Call conference operator. Welcome and thank you for joining the STMicroelectronics Second Quarter and First Half 2011 Earnings Results Conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. (Operator Instructions) At this time, I would like to turn the conference over to Mr. Tait Sorensen, Director of Investor Relations. Please go ahead sir.

Thank you Dino. Thank you for joining our Second Quarter 2011 Conference call. Hosting the call today is Carlo Bozotti, ST’s President and Chief Executive Officer. Joining him on the call are Didier Lamouche, Chief Operating Officer; Carlo Ferro, Chief Financial Officer; Carmelo Papa, Senior Executive Vice President of the Industrial and Multisegment Sector; and Philippe Lambinet, Chief Strategic Officer and Senior Executive Vice President of Home, Entertainment and Displays. This call is being broadcast live over the web and can be accessed through ST’s website. A replay will be available shortly after the conclusion of this call. This call will include forward-looking statements that involve risk factors that could cause ST’s results to differ materially from management’s expectations and plans. We encourage you to review the Safe Harbor statement contained in the press release that was issued with the results last night and also in ST’s most recent regulatory filings for a full description of these risk factors. As a reminder, please limit yourself to one question and a brief follow-up. And now, I’d like to turn the call over to Carlo Bozotti, ST’s President and CEO, Carlo?

Thank you Tait and first of all I want to thank you for your interest in STMicroelectronics and for joining us on this call today to discuss our second quarter results and our outlook for the third quarter. Let’s begin with a brief overview. Overall, second quarter total revenues and gross margin were substantially in line with the outlook we shared with you in April, despite entering the second quarter with few but important headwinds. Total revenues increased 1.3% sequentially, and 1.4% year-over-year. Automotive was a key driver of our growth in comparison to the first quarter as well as year-over-year. From a regional perspective, Americas led the results sequentially, and in comparison to the year ago second quarter, the Americas and Greater China, South Asia performed the best. The situation in Japan which we saw as a headwind entering in the second quarter is no longer a significant concern. In fact, due to the changes underway at certain companies ST is now well positioned to capture market share. Looking at our wholly-owned businesses, the sequential and year-over-year progress was much stronger with sequential revenue growth of 3.2% and the year-over-year growth of 11%. In total, net revenues for ACCI, AMM and PDP were $2.22 billion, and accounted for 86% of our total sales in the second quarter. ST’s gross margin came in at 38.1% in the lower half of our range reflecting unfavorable currency and less favorable product mix and the impact on manufacturing of a change in demand by a major customer. Our operating margin before restructuring attributable to ST was 9.1% in the second quarter decreasing from 9.9% in the first quarter, primarily due to higher losses at ST-Ericsson. However, year-over-year, the 9.1% figure represents an improvement of 140 basis points coming from higher revenues and stronger profitability of ACCI, AMM and PDP. With respect to our capital investment, we have largely completed selective important capacity additions that we were making particularly for our automotive business, MEMS and wireless new products. These additions temporarily elevated our capital expenditure level and were part of the reason for the negative cash flow that we had anticipated for this past quarter. Our CapEx during the first half of 2011, totaled $798 million. We expect to have a much lower level of capital expenditures in the second half. At the end of June, our net financial position at $1.1 billion continues to be strong and is similar to where it was at the end of April and significantly above last year at this time. We received a $357 million cash payment from Credit Suisse in the second quarter. While it took some time litigation with Credit Suisse with respect to certain auction rate securities has finally ended making ST whole by recovering an amount slightly higher than the full amount initially invested plus lost interest and expenses. Talking about the key facts of the past quarter, I wanted to briefly highlight that in June we began to have some challenges impacting our business and our manufacturing, as a result of weaker demand, and a much weaker than planned outlook for wireless products from one major customer. This change in demand has and will in the near-term negatively affect sales in power discrete, imaging and in the wireless JV as well as our manufacturing, as I will discuss later. Additionally, we saw some signs of softening demand in some of our businesses, such as digital consumer and microcontrollers. Turning now to ST-Ericsson, there are several points I would like to make and they fall into three blocks, legacy sales, new product traction and the timeline of the anticipated new product ramps. First, with respect to legacy sales, the situation with a major customer of the legacy product portfolio is making the transition quite challenging with Q2 sales down 10% sequentially and 34% year-over-year and the first half sales also down 34%. Taking into account the joint ownership, our wireless operating loss excluding non-controlling interest was $102 million in the second quarter. Second, the quality of ST-Ericsson’s product roadmap to develop innovative solutions has enabled the company to gain traction with existing customers and to expand its customer base. So the focus is on execution, delivering new products to customers in the targeted high-growth smartphone and tablet applications they are addressing. We continuously monitor how design wins will evolve with the existing and new targeted customers. With respect to the third block: product roadmap, ST-Ericsson’s new product momentum continues in the second quarter as they outlined. However, the initial volumes in the second half of the year for their NovaThor U8500 platform, will be lower than initially expected due to reduced demand at certain customers. So to conclude, we are firmly committed to support the execution of ST-Ericsson business plan and we continue to believe in the company’s future recoveries to profitability and positive operating cash flows. At the same time, being conscious of our responsibility to our shareholders we will continuously monitor ST-Ericsson business evolution, and we will guide you the situation on a regular basis. Now let’s turn to further details on the second quarter. ST’s sequential revenue growth was driven by better than expected results in ACCI specifically Automotive and the Imaging. ACCI had another solid quarter with revenue growing 6% sequentially and 9% year-over-year, quarterly net revenues above $1 billion and a double-digit operating margin. Our Analog, MEMS and Microcontrollers business came in slightly below our expectations principally reflecting customer demand changes and the adjustments related to the supply chain disruption due to the situation in Japan. Nonetheless, this is an area of significant opportunity for ST, both from a market share and profitability perspective. And we anticipate revenue returning to a growth mode from this quarter onwards. On Power Discrete Products, net sales were in line with our expectations. We did see continued good momentum for PowerMOS and IGBTs. However, growth and profitability were negatively impacted by lower demand largely due to a major wireless customer. This lack of revenues from this customer will continue in the second half and requires us to reduce production significantly in one specific fab, which is largely dedicated to these affected products. Looking at the first half, ST net revenues increased 5% in total. However, net revenues from our wholly-owned businesses increased 17% reflecting an improved product portfolio and continued strength in Automotive, MEMS, Microcontrollers and Imaging applications. Based on these results, it is quite clear that we have increased our market share in these areas. ACCI first half revenues were $2.2 billion, up 13% compared to the year ago period. ACCI posted a 60% improvement in its operating income. AMM first half revenues increased 27% to $1.5 billion and its operating profit has nearly doubled to $325 million. PDP posted first half revenue growth of 9% and a 43% increase in its operating profitability. In the aggregate, operating income for our wholly-owned product portfolio was $587 million for the 2011 first half representing an year-over-year increase of 81%. It is clear that all of our wholly-owned businesses have been delivering on plan. With respect to our marketing programs, our progress is significant. In the first half, revenue from our new 20 key accounts, increased 35% compared to the year ago period. In the mass market, net revenues were higher by 26% for the same period. This strong progress is thanks to the advances we are making with our product portfolio and marketing initiatives. We are strengthening our opportunities for the mid-term with important new products and design wins in our targeted growth applications. For instance in the Automotive, we earn a key design win for a Dual Clutch Transmission Controller, that will help auto companies to reduce fuel consumptions. In CCI [ph], we have collected multiple design wins including one for Ciena for an ASIC manufactured in 32-nanometer process technology for a metropolitan area network application. In the energy management and savings, we started production of a solar battery charger for mobile phones and other small portable devices based on an innovative technique for collecting the maximum possible energy from solar cells. Now turning to our outlook for the third quarter. Looking at the semiconductor market environment more broadly we believe that there has been some sort of inventory built in the first half following the Japanese natural disaster. We saw adjustments in the supply chain, but it seems that the industry is returning to more normal condition. However, when we look at the overall economic situation in different countries and regions, we think some caution is appropriate as visibility is reduced. As I discussed earlier, we did see in June a much weaker than planned outlook for wireless products from a major customer concerning ST and ST-Ericsson, and we have moved without delay to lower the production levels for the related products. These actions will result in a high level of un-saturation at a few of our fabs during the third quarter as we reduce production output. Overall we anticipate net revenues to evolve sequentially about negative 5% to positive 2%. The more material effect falls on our gross margin due to the temporary high-level of un-saturation leading to a gross margin outlook of about 35.5% plus or minus 1 percentage point. So to summarize both the second quarter and first half, demonstrate the progress ST is making with its wholly-owned businesses. Our marketing initiatives have broadened our customer base, regional presence and the industry diversification and we will continue to focus our efforts in these areas. As a consequence of the recent change with a major customer, and a softening of demand, we face increased challenges over the near-term which we are dealing with aggressively. Beyond the near term we remain optimistic as we are confident in the product leadership potential for ST-Ericsson on top of the improving positioning of our wholly-owned businesses. Now my colleagues and I would be happy to take your questions. Thank you.

We will now begin the question-and-answer session. (Operator Instructions) First question is from Mr. Gareth Jenkins of UBS. Please go ahead sir. Gareth Jenkins – UBS AG: Yes, thanks for taking my question. I guess just a couple on utilization rates if I could, just wondered what the utilization rates you expect in Q3 versus Q2? And I just wondered given the change in wireless with the utility that you can actually re-point some of the lines you could underutilization, so some of the factors can you re-point them to some of your other areas they’re seeing stronger demand may be the timing on that? Thank you.

Yes, well what basically has happened in June is a drastic reduction of the outlook from our major customer and we have decided to take a strong move in our fabs to reduce loading and Carlo will comment on this. Today, the visibility that we have is that we plan to have a correction in inventory and we are trying to observe the negative bubble from Nokia during the course of the third quarter in one quarter but it may take two quarters. I think this is – of course is a significant reduction compared to what we expected and we decided to move aggressively on our fabs, it’s definitely temporary. We have a number of important opportunities to replace these products for our major customer with different products in wireless and also in non-wireless application. The plan is to this in one quarter in Q3 as a word of caution, it may take two, but we are of course determinate to do this in the third quarter. And in terms of the fab utilization, Carlo Ferro will give you the exact figures for the third quarter.

Good morning, good afternoon everybody. And that the point is starting from second quarter with utilization rates had been in average in the range of an 87%, so they did not fit. And we expect in the third quarter, utilization rate in average to go in below 80s. And you may expect as a blended average of that some of the most concerned fab will be running this quarter at much lower utilization rate. Overall the impact to the gross margin in terms of unused capacity charge is expected to be vary such [ph]. The impact that we do anticipate that is just below two points of negative impact to do the gross margin [ph]. Gareth Jenkins – UBS AG: Thank you. And just a follow-up on that, Nokia talked about stabilization at the end of June and into July, just wondered if you’ve seen any signs of that stabilization subsequent past the end of the quarter?

Well of course our major wireless customer is impacting ST-Ericsson but it’s also impacting a few of different products I want to make here all those products, in fact three, one block of products is of course the wireless products from ST-Ericsson. The second block of products is certain discrete products that we manufacture in one – facility that is also devoted somehow to run this technology. And then we have a third family that is our imaging. We see a significant reduction on certain of these products during the course of Q3. So on these products we do not see yet a stabilization. Of course, we expect them to go back to more normal condition during the course of Q4, while on other products particularly on the wireless products with ST-Ericsson, we have started to see that some signing of stabilization also in ST.

Do you have a follow-up Gareth? Gareth Jenkins – UBS AG: Yes, I guess the follow-up is just a – follow-up to that which is just do you guys will see may be loss market share within some of your key customers or is it just the share weight of their shift down from production numbers themselves?

Of course, I think well now we’re – what we are defined here as a wholly-owned business by ST, we grew in the first half by 17%. I think definitely gaining share, there is no doubt that we are losing share of wireless but due to the transition those were with the glitch with our major customers. I agree there is no doubt that we are gaining share on all the heads [ph] during the first half and those were the prospect that we had on the second half. So overall, we are expecting from our core business, we would gain share in this year. And we also expect significantly improve our operating income moving from 2010 to 2011 on the core business of ST. Gareth Jenkins – UBS AG: Thank you very much.

Thank you Gareth. Dino, we’ll take the next question please.

Next question is from Mr. Kai Korschelt from Deutsche Bank. Please go ahead sir. Kai Korschelt – Deutsche Bank: Yes, good afternoon. First question again on the gross margin, I think you said the underutilization is to develop 200 basis points. Now even if I adjust for that, it looks like sequentially the gross margin is still down 80 basis points Q3 versus Q2 at the midpoint of the guidance. So I mean, I am just wondering what drives those FX, is it mix, is it pricing pressure. If you could maybe give a bit color on that? And then the other question was on the customer, you’ve clearly seen more upbeat on the consumer segment in the second half particularly with set-top box, RAMs and DisplayPort and the likes. So I am just wondering what has changed – which areas, is it set-top box, is it delays in new product RAMs, is it TV? If you could just maybe just a give a bit more color on that please. Thank you.

Yes, Carlo Ferro will take the first question and Philippe Lambinet the next one [ph].

Well your first question Kai, is about the gross margin dynamic from second quarter to third quarter, and indeed you are right, that the un-saturation charges are not sufficient to quantify the 260 basis point in line to go to the midpoint of our guidance. And that’s an ingredient in which in this case that affect would be lesser surprise is the exchange rate impact. The exchange rate has been somehow mitigated in the first half of the year by the hedging. This quarter the exchange rate plays some 60, 70, 80 in this order of magnitude basis point and negative impact to the gross margin dynamic. So you see that the exchange rate in under-loading themselves at the end that make the quarter-to-quarter change in the gross margin. On the other dynamic, what we expect for the quarter? We expect some usual or even less than usual price dynamic. We see some improvement in the product mix, product mix this quarter is a positive contributor to that margin dynamic. And of course you may expect not bigger contribution from efficiency also take in account that the overall situation of the fab is not hurting or so the overall wafer cost at this facilities.

Yes, this is Philippe Lambinet taking the question on the consumer. Well we’re still at peak for the second half of the year in the sense of gaining market share, introducing new products and gaining momentum in a lot of applications including DisplayPort as you mentioned. The situation at the moment Q2 and Q3 is that the market is pretty unfavorable, and it’s decreasing quite a lot versus last year. That’s a temporary inventory correction. In fact our sales are decreasing less than the market so we even in this tough situation, we believe we’re gaining market share with our products. And we still see a ramp-up of new products happening in the second half of the year. Now this said and as Carlo said, the market situation is quite poor at the moment with inventory that was created at the end of last year and in Q1 in the marketplace. And until that inventory correction is over, we will suffer from quite a low level of sales. We believe that correction will be over at the end of Q3, and we therefore believe that at the end of the year we’ll see sales in the consumer markets picking up. This is not an ST only problem, this is a market situation. And we need to go through that inventory correction before sales start to pick up again. But again we remain confident that the adoption of our new products is going actually quite well. Kai Korschelt – Deutsche Bank: And is the market weaker in more TV or set-top box or both?

It’s actually both. Kai Korschelt – Deutsche Bank: Okay, thank you.

Thank you Kai. Dino, next question.

Next question is from Mr. Janardan Menon of Liberum Capital. Please go ahead sir. Janardan Menon – Liberum Capital: Yes, hi thanks for taking the question. I was just wondering in your revenue guidance which is down 1.5% quarter-on-quarter at the midpoint, can you give us a bit of color as to where you see that weakness? Would it be that you were guiding wireless down and everything else slightly up is what you’re baking into that or would you be guiding some of the core wholly-owned businesses down as well, keeping in mind also that ST-Ericsson told us that they’re looking at a flat sale but because there is some R&D sales coming down $40 million in that, they would expect the SDM portion of it to be up quarter-on-quarter. The other thing which just to clarify is in the PDP division, could you just give us what percentage of the revenue is coming from the major wireless customer, please?

Okay, so Carlo Ferro will take all of these and we’ll give just proper indication of the growth or the plan drivers for the third quarter including the ways of our discrete business on our major customer.

On your first question, Janardan really thank you, this is very good questions since I have to elaborate the midpoint at minus 1.5% indeed is a blended average reflecting a different trends by applications. The most really advanced sales decline we are experiencing sequentially is about the Imaging business, the Camera Modules. And yes, this is driven mostly by two wireless customers that represent the large majority of the sales of our Imaging business. Still on the negative sequential trend, we have the consumer business as Philippe has elaborated that’s driven by market demand. In computer and communication infrastructure, you are aware of systems [ph] about the progressive phase out from the System-on-Chip for storage at a given customer and this is really Q3 the quarter where we see no longer revenues of System-on-Chip for hard disk driver at these customers. Due to multi business after 10 quarters of very sustained growth in a row is now expecting to substantially flatten in the second half of 2011. And you know that in ST, we experienced some negative seasonality in the third quarter for Automotive given the summer period at the European manufacturer. And this is covering those areas that contribute negatively to the revenues sequential dynamics. We have two positives that are important. One is in the Analog, MEMS, and Microcontrollers. Yes, we expect that we are in starting growing in sales in MEMS and in Analog process. And the other one that you have correctly mentioned is wireless. Wireless this quarter is anticipated to grow for ST and thanks for having captured these – the tail, you eventually don’t see it in the ST-Ericsson revenues due to these reported revenues for R&D services that the ST-Ericsson reports as revenues, ST reports to effect the research and develop expenses given accounting rule consolidation rules. And this change from second to third quarter is such that, at the end the flat dynamic revenues for ST-Ericsson is a combination of growing in the sales of the product but missing this portion of R&D sales, while in ST you see only the growing – in ST revenues you see only the impact. To complete the picture on power discrete, power discrete sequentially is expected to be between flat to a slight growth, not be a bigger contributor of change quarter-to-quarter. And then heading also a very extensive as where to your first question, you will forgive me for being much shorter on the second question as obviously. We are in a situation this quarter that the major customer revenues are no longer reported, sales in Q2, sales to Nokia are below 10% and frankly how to refrain from reporting it on a specific division. All right then, what is evident is that for Imaging and Power and Discrete, being part of wireless is the most important driver of the revenue dynamic as we expect for the current quarter. Janardan Menon – Liberum Capital: Thank you very much for a very detailed answer. Just one small clarification is on the Imaging part, where it’s just a bit confusing when you’re saying that Q2 was actually quite strong and Q3 is one of the weaker segments in your revenue outlook. What was the reason for the Q2 strength because your wireless customers were already weak in Q2?

Well we didn’t see that, we are just reporting – I think we see an important decline during the course of the third quarter on this business, I would say is making the difference in the quarter. So it is a significant decline in the quarter and is concentrated onto major customers, while in the course of the second quarter we have experienced (inaudible) strong growth but also a good profitability. And in fact this business is more robust and even at lower levels we are confident that we’ll maintain profitability in the course of the third quarter. But the top-line decline in the course of the third quarter is material. Janardan Menon – Liberum Capital: Thank you very much.

Thank you Janardan. Next question Dino.

Next question from Mr. Sandeep Deshpande of JPMorgan. Please go ahead sir. Sandeep Deshpande – JPMorgan: Yes, hi. Thanks for taking my question, can I ask one more, higher level question. Historically, I mean ST used to always say that we would try to create a product mix which would do a 40% gross margin, I mean you’ve stepped back from saying that recently but even through this huge semiconductor up-cycle we did not see ST move towards the 40% gross margin company. Can you think of doing some changes in the product mix which will make this happen given the kind of lack of move towards the kind of margins ST has historically aspired to, that’s the first question. And then the second question, I’ll ask on the cost structure itself, clearly you’re taking action at this point on reducing the loading in the fab. Are you going to take any other cost actions?

Yes, Carlo will take it.

So Sandeep, the first part of your question is about gross profit at 40% and frankly, we believe making out really regretting the 10 basis point that we have missed in the Q4 last year where we were at 39.9%, but apart of that I see the point about really the intent of bringing margin structure really at higher level than the current level. And in this respect the contribution of new product is the most important driver I believe, we have talked about that at the call in April. And in this respect, there is a wave of new product to come in the area of ACCI namely in the digital consumer part and most importantly in term of also overall weight in the area of wireless. And this is how say the next step to contribute to a gross margin expansion of our – the overall ST group, together with the continued improvement in the area of the analog product and MEMS whose gross margin is already well above that average target.

Yes, well I think the major opportunity we have for gross margin increase is definitely wireless, I mean if you take – we do not report gross margin by segment but if we look at the gross margin duration of the ST wholly-owned business and the gross margin of ST-Ericsson that is a very significant difference between the two is continuous and the opportunity that we see with ST-Ericsson of course is also replacing the legacy product that are experiencing today poor gross margin results. Sandeep Deshpande – JPMorgan: And the question on the cost reduction?

On the cost reduction I can give you some more color on what we do. Clearly, we don’t simply stop loading the fab, it’s one thing obviously that we are also taking cost measure like the most effective fab by the turnaround of our major customer situation. We are setting down actually and putting people in falsification tweaks during the similar [ph] and maybe more. This is affecting – this type of measure is affecting a few of our fabs. We are also obviously on those affected fabs not renewing the temporary contract and getting mail [ph] contract that workers that we are using at those fabs, those are the two main measures to immediately tactically save cost. And more structural measures that we didn’t talked too much before. We have decided to accelerate the major program in material cost savings, I mean by that migration from gold to copper as you saw probably saw the rise of the gold price, okay, which is severely impacting our product costs. The gold is I think reached a high level record to get recently at $1,600. So we are aggressively leading that conversion to gold. And we hope – not we hope, the target is to have the major bulk of our saving this year kicking in Q3 and in Q4. So ahead of us. But that basically, I cannot – I don’t want to give you an exhaustive brief because everything we do goes out into main practical and more structural action that we have undertaking. Sandeep Deshpande – JPMorgan: Thank you.

Thank you, Sandeep. Dino, next question please.

Next question is from Mr. Simon Schafer of Goldman Sachs. Please go ahead sir. Simon Schafer – Goldman Sachs: Yes, thank you very much. My first question actually was going back on the Imaging business, I guess, I am just trying to gage the risk as to what we could be looking out in terms of profitability or losses given the customer concentration. I think you went through a period when you were quite close to breakeven may be you could update us as to where that business now is and what the risks maybe given the customer concentration in terms of profitability? Thanks.

Yes.

Okay.

So Philippe will take this.

Yes, I think yes, as you know this business is today concentrated mostly on two major customers. Now it’s not concentrated on any particular segment at those customers. So unlike ST-Ericsson, we continue to enjoy some good sales in the mid-range and entry level of those customers as well as the high end. So we have a much broader mix and in fact the impact on Imaging sales isn’t as dramatic as on the legacy product. So ST-Ericsson, which are being replaced by platforms. So at the end of the day, yes, this business is being impacted at the moment. But also enjoys some good diversification from new accounts. So at the moment, the profitability is two digits, and is been stable at two digits for a few quarters now. And we continue to see tremendous opportunities for margin improvements. And we continue to see a good level of profitability going forward even though the level of demand has reduced during the course of Q2. At the end of Q2, we had seen a demand for Q3 and Q4 which is lower than what we had anticipated before. So even with a lower level of demand the profitability remains absolutely sustainable. Simon Schafer – Goldman Sachs: Got it, very clear, thank you. And my follow-up question would be on ST-Ericsson. Just maybe Carlo Ferro may be if you could just give us a remainder as to how you as a parent company think about potential options to fund this joint-venture just because the operating loss obviously is still challenging and the financial position still a question as well. So may be just the mechanics as to how the funding will work for that joint-venture? Thank you.

Yes, hang on. We said last quarter that at end ST and I believe you heard the senior lead [ph] from our fab is committed to support these value generation opportunity as ST-Ericsson. Therefore we do ease (inaudible) facilities which is progressively expanded in respect to the additional need of cash funding of ST-Ericsson. At the end of the second quarter, the size of the facility committed was $500 million out of which drove amount has been put on from $45 million. In the third quarter we expect to expand such facility. Simon Schafer – Goldman Sachs: Understood, but Carlo I am sorry, just in terms of mechanics, does that just get back by your cash balance or what is the funding mechanism?

In this case, this is a very nice question, perhaps to explain that when reading the ST cash flow, you find the ST-Ericsson use of cash at 100% of its total amount. For instance, we have ST-Ericsson has reported I guess publicly a negative cash flow for the quarter of $267 million. ST has reported a negative cash flow this quarter of $250 million taking 100% of the ST-Ericsson use of cash. While the portion of the cash flow which is funded by our partner is not visible in the overall cash flow and the result as external that of the ST group. This is one of the additional implication of the accounting mechanics to consolidate ST-Ericsson on the integral method, but frankly yes, we don’t want to add for your complexity on reading our numbers, the best is to fix the root cause and to turn this number to be positive. Simon Schafer – Goldman Sachs: Okay, thanks so much.

Thank you Simon. Next question Dino.

Next question from Mr. Didier Scemama of RBS Capital. Please go ahead sir. Didier Scemama – RBS Capital: Yes, good afternoon. Couple of questions, first of all going back to the Imaging, I understand your largest customer is going down and it doesn’t feel like he is going to go up any time sooner, I believe the business at ST has got they are transitioning to different platform so correct me if I am wrong, but it doesn’t feel like the longevity of the life of this business is – going forward is particularly attractive. Secondly, your other customer that was Mentor [ph] obviously delayed but as far I understand from other customers, other suppliers on that platform Mentor [ph] late Q4. So do you confirm that and therefore should we see an improvement in Q4? And if not, why not simply shutting down that business which seems the most reasonable thing to do given the outlook for those two particular customers? I’ve got a second follow-up after that. If you look at the last 15 years, ST’s product roadmap has been more or less they see decided to large degree to the benefit of Nokia. In fact, many of your capital allocations when it comes to the flash memory business, the camera modules business, ESD Protection business have been dictated by Nokia. As Nokia is no longer 10% or more of your revenues, what’s going to drive your roadmap and will you have a more disciplined capital allocation decision in the future to avoid the situation we are in today? Thank you.

Well I’ll take the second one and I’ll let Philippe comment on the first one. Well the history of course with Nokia is – for us it’s a long history and if you look at just the few last years, I think Nokia did represent two years ago 18% of our revenues, last year 14% of our revenues and Q1 of this year 10.5% of our revenues and for the first time after so many years in the second quarter, we will not disclose because it’s going to below 10% – it is below 10%. And I think of course the major initiative that we have in place and that we had in place and that we are aggressively pushing is the diversification of the customer base. This is particularly important in wireless but of course it’s important for ST and then to say that we are now almost back to a very normal situation where of course Nokia is a major customer but there are many customers like Nokia. And I think from the risk point of view, this is something that is our advantage. And what we are trying to do of course is to observe this important negative glitch following the recent profit warning at the end of May. We are trying to observe this quickly. We are trying to observe this quickly by reducing the loading in Q3 but of course replacing the capacity. We’ve got the products and we’ve got the technologies for our different customers. And I think the situation is going to be securitized [ph] but I’ve seen one or two quarter as I said at the beginning and during entering 2012 with a configuration in terms of major customers that with better equilibrium and with less dependence on a specific major account. So again the major action is on the diversification of the customer base particularly in wireless. As far as capital expenditure is concerned, frankly I mean our programs are not necessarily driven by Nokia. Take this year, our major efforts in the capital investment was immense. And we are growing most of businesses by 25% to 30% compared to last year. And definitely we had to support particularly in the first half these growth opportunities that are not realizing. During my script here I mentioned the fact that we have identified 20 new key accounts to target. And they are all important accounts. Some of those names are glamorous names. And in the first half of this year we grew compared to last year same period by 35% which is an important growth. So again capital investment is I think is really not driven by a single customer. As I said this year the money is being spend particularly for MEMS and Automotive and Power and new products for ST-Ericsson, but not exclusively for the major customer but for a much wider phase of customers. Now Philippe will comment on the Imaging again.

Yes, well Imaging delivers an operating margin which is above the average of the company. It contributes to loading Crolles in a very nice way. And it’s in process of diversifying its customer base. So I don’t think it’s time to talk about shutting down that business line which is a good business line now. And it’s profitable, it contributes to manufacturing efficiency and it’s nicely – by the way it’s nicely synergetic with a key growth driver for ST which is sensors. So there is more and more as we explained in New York, applications where there is a mix of sensors which can be MEMS or can be optical sensors which contribute to a new lifestyle. And we believe imaging sensors have their place in the whole picture. And we see a lot of applications for optical sensors beyond smartphones, beyond feature phones, in consumer, in computer and very important applications. Now it’s also important to notice that the level of investments because you’ve mentioned CapEx and our policy and things like that that the level of dedicated process development expenses is extremely minimal and the level of investments related to Imaging is almost none. So this is a business which doesn’t force us to invest both in R&D process development or in CapEx to any larger extent. So it really it’s not on the agenda to discontinue for a client which performs. Didier Scemama – RBS Capital: And for Q4 as a whole as a company do you think you are still in the process of digesting the inventory correction in industry as well as what’s going on at Nokia, or do you think that things are going to get better?

Well first of all the visibility that we have today looking for in terms of top line evolution is a good visibility. We have important growth opportunities, I think is following the most of our product lines from IMS to digital consumer, from wireless. So it is an important growth opportunities. Of course considering the outlook on Nokia is somehow below what we had thought at the beginning of the year, but still very material. So we have a positive view which is important because this is a positive view on the top line and this is driving many things. And on the other hand in terms of inventory adjustments, as I said today the plan is to observe more in Q3, I mean this is the plan that we have of course if additional measures would be necessary to be taken we will take the measures in Q4 but today the plan is to do this in Q3, this is what we have done in Italy, started to establish in Italy after the profit warning [ph] of our major customer. Today, this is our program and so if we do (inaudible) at this moment is good on many products and applications including ST-Ericsson and offering more corrections in the fabs. And on the other hand if it would be necessary to make another correction on inventory we will take of course the actions in Q4 but today is not part of our plan. Didier Scemama – RBS Capital: Thank you.

Thank you Didier. We’ll take the next question Dino.

Next question from Mr. Odon de Laporte of Cheuvreux. Please go ahead sir. Odon de Laporte – Cheuvreux: Yes, good afternoon. Could you disclose the number of outsourcing, I mean manufacturing outsourcing to fund raise if any in Q2? And I am surprised you cannot choose outsourcing to mitigate may be a lower demand from your key customers. I would appreciate if you can shed light on this space? Thank you.

Yes, Carlo Ferro is taking your question, Odon. And to (inaudible) overall I am glad that the average outsourcing from funds during the second quarter is in the range of 13%. If we look at the advanced CMOS technology from Q1 to second quarter, we have reduced by about 10 points in the outsourcing. Last quarter I believe we shared with you about 50% outsourcing from foundry in second quarter is 40%. This portion of outsourcing will continue to go down during the third quarter. Odon de Laporte – Cheuvreux: And it was not possible to then use to accelerate reduction in outsourcing?

Yes, of course Didier speaking, outsourcing the key driving factor for outsourcing is of course to building complexibility in our plan, but obviously we cannot react overnight as we have the so called notion of further window even with other supply deals. So as Carlo said we recognized late in the quarter that we had a sudden weakness in our demand of course, we reacted but as you can imagine, we first take sometimes to report [ph] products and eventually possibly re-quantify some. So I am not providing that (inaudible) so we need to re-verify that the unit [ph] is okay and second we have also to comply with our old partner, a contract that we have in place. So that’s why it takes a little bit of time to do but that’s what exactly what we do and it is demonstrated by the numbers that Carlo gave you. Odon de Laporte – Cheuvreux: Okay, thank you very much.

thank you Odon. Dino, next question.

Next question is from Mr. Francois Meunier [ph] of Morgan Stanley. Please go ahead sir. Francois Meunier – Morgan Stanley: Hi, it's Francois Meunier from Morgan Stanley. Thanks for taking my call. Actually one question on, I think two more with Didier in London will concentrate mostly on that.

Thank you for the warming. Francois Meunier – Morgan Stanley: Yes, I know, it’s actually your biggy base for the industry so I mean some people say that inventories are not too high, I think what you’re doing today is actually is a good action which is saying we’ve got inventories which are too high, we are shifting [ph] the inventories in part during the summer which has a short term impact on gross margins but at least we are taking inventories down in case there is a problem later or this year and I think that’s a very smart move. Now…

You are ready to take a job at ST, I think, it’s exactly what we do. Francois Meunier – Morgan Stanley: Okay, let’s talk about this later. So Didier how long – what’s your best guess in terms of timing because if I look at ST apart it usually takes between two quarter or maybe three to clean up inventories when you’re close to 100 days and I think that’s where you are. Is there any way to clean inventories faster, will it take again two quarters or more? Will it be shorter, what’s your best guess?

Well in our case as Carlo mentioned before we had two major phenomenon to counteract. First is of course inventory correction but also to adjust to the new outlook of how well – of Nokia, were main customer. And so the goal – so that’s goal pain I would say. However we have taken really drastic action in a few of our fabs and the goal is really to try to execute to swallow that in one quarter or maybe two. So that’s – the internal goal is one, it might extend to two. This is a window we are allowing ourselves to move into. Francois Meunier – Morgan Stanley: Okay.

Yes, with the visibility that we are today in terms of top line evolution that as I said before is a positive evolution moving from the Q3 to Q4. And with the actions that we are taking in Q3 in terms of loading without any additional special actions to be taken in Q4, we will end the year. So with a short term at full cost that is above four, okay. Although in cases it’s needed [ph] we have a complete take another step in the course of the (inaudible). Francois Meunier – Morgan Stanley: So given would it make sense actually to take an inventory lie down then at some point just to make things go faster or do you still use the chips?

No, no.

Yes, there is no reason to do that. If there is no volume not obsolesce, the chips.

The chips are good, I mean there is no risk of obsolesce at all. These are good products. It’s just – let’s make an example, we’re even talking about discrete products. So it’s really product that are very good product, simple product. There is absolutely no risk, it’s just an adjustment for inventory. We are taking the adjustment in Q3. And we have a plan to grow in Q4 and it is a material growth moving from Q3 to Q4, we have a plan to reduce the loading in Q3. The plan today is to go back to a normal loading in Q4. With this vision we will end Q4 with stuff [ph] full cost that this evolve for times. And of course we also have a contingency plan in case there is a more serious problem in the market, we will gain the condition to take another adjustment during the course of Q4 and of course there is a very good period of the year to take it.

Okay, thank you very much and future more Didier.

Okay.

Thank you, Francois. Next question please.

Next question from Mr. Tristan Gerra of Robert Baird. Please go ahead sir. Tristan Gerra – Robert W. Baird: Hi thanks for taking the question. Is it fair to say that the utilization rate declined in Q3 will continue to negatively impact gross margin in Q4 even if you achieved a more reasonable inventory level internally?

Carlo will take this.

Yes partially, of course the most relevant factor of under loading [ph] are the charges for unused capacity that are recognized in the quarter has been covered and it is fully embedded being regarded for the third quarter gross margin. Then it’s obvious that the quarter after is not exactly the start on margin where they were since you start with the wafer cost that the overall is not optimal, I believe we had several opportunities in 2009 to talk about this dynamic of the business model. We were – again the recovery of the efficiency is much, much quicker than what Francois said earlier, it is something that there could be I would say a temporary tail on the fourth quarter gross margin eventually. Tristan Gerra – Robert W. Baird: Okay, and then a quick follow-up, the initial visibility that you have into Q4 seems to be positive, is it fair to say that your book to bill had ticked up at this stage in the quarter, could you comment on that?

Well definitely, we have some drivers so that some of the businesses we are in are very strong and we’d like to mention some of them I think in general, we see a very strong momentum on MEMS in for a number of reasons particularly related to the disaster event [ph]. We did not grow sequentially in MEMS. I am talking sequentially because of course year-over-year is phenomenon growth but we’re expecting not to go back in Q3 and Q4 and to go back to strong growth. This is one area. In general, I would say that in other area the PowerMOS, the IGBT we see important opportunities to grow in the second half as Philippe mentioned before, there are certain new products that will start heating the market at the end of this year. On digital consumer, today we have better visibility on certain new products from ST-Ericsson that will be sold during the course of Q4. And therefore we count and of course of the revenues. So there are drivers that where we have custom engagements for customers all those, etcetera that is giving us the confidence to see a significant material step moving from Q3 revenues to Q4 to comp [ph] Q4 revenues. Tristan Gerra – Robert W. Baird: Okay, that’s useful. And then quick last question, how should we look at the set-top box business longer term next year, should we assume to may continue year-over-year decline if not, what are the candidates and what – is there any area that could be exciting in that business for next year?

Philippe taking the question. No, actually we believe next year the markets should come back to a normal pattern. We had absolutely abnormal growth last year. This year we have inventory corrections and normally next year should be a good year. Also keep in mind, next year there is – there will be games in the European Football Championship, soccer championship. So these are usually factors that drive good consumption of consumer products. So we believe next year should be a pretty good year. We also have good portfolio evolution towards higher value products. And we are quite successful pushing those products. Now this is for next year. Longer term, we see an evolution towards even higher end systems, home servers which we believe is very interesting, home servers and gateways which we think is very interesting for the digital consumer business moving onto even higher value products. So we may call in [ph] set-top any more five years down the road but it’s still a home video box let’s say. And that’s where the business is going to go in the long-term. In short term which means Q4 and next year, we think the market will recover and we think we have a good portfolio to address the market where it goes in the short-term. Tristan Gerra – Robert W. Baird: Great, thank you.

Thank you Tristan. Dino, next question.

Next question from Mr. Jerome Ramel of Exane BNP Paribas. Please go ahead sir. Jerome Ramel – Exane BNP Paribas: Yes, good afternoon. Just like to understand if you could share with us what the in-store capacity in Crolles 300 millimeter. And you mentioned as you have plenty of new product to replace the fading out of the System-on-Chip for hard disk drive at Seagate, obviously the CMOS sensor could be structuring done, so if I do the math potentially its $300 million, $400 million of revenues could disappear. So what are the new products which are going to replace us and what are the products which could feel Crolles 300 millimeter?

Well, it's on the capacity, all right?

Yes, the capacity depending on the mix is between 3,200 to 3,500 wafers starts per week depending on where use it, Jerome. Jerome Ramel – Exane BNP Paribas: Okay.

So now in terms of products Seagate is 100% out. So Seagate was not manufacturing its own, so Seagate is off. It was not manufacturing, internally it was completely outsourced. And then of course there are three main blocks of products that – and I focus on the VLSI activities in Crolles and in (inaudible) we believe we have a tremendous opportunities in everything that is embedded flash, okay. Embedded flash for microcontrollers, for secure microcontrollers, for our automotive microcontrollers. So this is a big block we see – first of all we have an history of performance during the last two years that is really great and with our 32-bit ARM processor and we see more opportunities. So this is an important block for us. Then there is so called advanced analog, advanced analog of course is for the new products of ST-Ericsson like the power management and the other frequencies [ph] but also the advanced analog is that we ran 12 weeks of 8 inch [ph] that is advanced CMOS with analog features is also the companion chip of our MEMS [ph]. And these are A to D, D to A kind of products that are in the same package as the micro machinery package to perform the overall MEMS functions. So this is a set of the important – second important block in terms of new products. And then of course there is a third major block here again now what we are talking about the more traditional and advanced CMOS kind of products. And to list some of the new products here, we have the thin modem from ST-Ericsson, of course in the future, the LTE modem. We have the Novathor kind of solution, we have all the set-top box products for instance today, we still have some legacy products that is completely outsourced. And then we have of course the digital TV solutions. We have products for computer peripherals, the digital color printers that is very successful business for us or Digital ASICs for communication infrastructure. So there is a long list of products on digital CMOS and on advanced CMOS. And the visibility that we have is a very significant portion of this will be outsourced because we will not have – we do not have enough capacity internally to run all of this. On the other hand, thanks to the effort that we are doing on the technology development. We believe we will have some significant advantage starting from the 28-nanometer using our fully retreated SOI technology that is giving a boost to the performance of the application processors giving a very, very low level of power consumption. So you see there is a lot of new products covering embedded (inaudible) solutions for microcontrollers, general power tools [ph] secure microcontroller, automotive is all the advanced analog CMOS for MEMS and power management and the radio frequency and the advanced CMOS for a long list of products. Jerome Ramel – Exane BNP Paribas: Okay, thank you very much.

Thank you Jerome. Next question please.

Next question from Mr. Peter Testa [ph] of One Investments. Please go ahead sir. Peter Testa – One Investments: Yes, I was hoping to help – you could help us understand the power of the underlying trends versus the inventory corrections please, given that you’re close to 100 days of inventory and you’re aiming to get to closer to 90 days of inventory, obviously that would be very challenging to happen in one quarter, but it would suggest that your underlying trends sequentially are somewhat better than you were indicating and I was hoping you would help us understand what the underlying trend was separated out from the inventory correction and the extent that if you looked at certain end markets outside of the mobile phone industry to the extent to it, which markets were performing better versus end customer industries, please.

Well in terms of end markets trends, first of all let’s talk about several of our market and we are – we had stores in to our major customer in Europe but we have other opportunities with many other customers here some of them are very successful customers and of course we have a good visibility of what is happening with these customers and we believe this is a positive trend. One word on automotive, automotive this year on our automotive products, we will grow between 25% and 30%. It is a significant growth because this is following 2010 where also the growth was significant and the feedback that we have from the customers of our customers. We talk directly to the carmakers, it’s not bad at all, I think we see some slowing down of the growth in China, but in general growth into our – to the carmakers we have positive feedbacks in terms of prospect for the second half. And what we see is a flattening of our business that is some adjustment is at the level of the equipment makers that the underlying the automotive market talking to the carmakers, the views is not bad, I would say it’s pretty positive. The weakness that we see – we already mentioned is really on the consumer market at this point is really on the communication [ph] and the set-top box. So this is – maybe there is a little bit lack of drivers this year but this is an area of weakness for sure. And then I think at certain distributors there was an move during the course of the second quarter to increase inventories also to face the challenges of the Japanese disaster and this is particularly in Asia. And we see the need to have a correction of a historic position. This is more of a mass market, however again talking to this customers they believe that this would be a correction concentrated in a quarter or so and then – of course all of these is in a frame over macroeconomic environment, it is not great as you not recognize and therefore we need to somehow to be to work with some caution here. But I told you what is the visibility that we have, I mean like why it’s greatly depends on customers physical consumer is weak. The fundamental on automotive we believe is pretty strong. We see the mass market in Asia some adjustment and maybe there were some speculative autos to face disaster in Japan and so well this would recover off. Peter Testa – One Investments: Okay, may be so I’ll get slightly more exclusively, you’re guiding minus 5% to plus 2% sequential revenue, a good chunk of that is inventory reduction may be even all of the minus 5% could be seen as inventory reduction given the inventory day [ph] reduction that you are seeking to achieve, you’ve also described some segments which themselves are not having that moment. What is coming through to restrain the sequential development to minus 5% to plus 2% given how much inventory reduction you’re engaging in? What are the big positive drivers to offset some of these factors in the third quarter?

Yes, I think maybe Carlo can mention the main drivers for the third quarter and again underlying what are the opportunities that we see in the third quarters.

Yes and back to the answer to the prior question we have in our quarter the contribution of several areas of revenue inspection. One is the analog MEMS and Microcontrollers in these areas, MEMS and analog are growing in sales. Then I’ve mentioned wireless, wireless on the fundamental sales of product will grow this quarter in respect to the prior quarter and to a lesser extent also the power discrete is expected to be between flat to slight growth. Then Carlo elaborated about the situation of automotive, we’re at the end of our third quarter is more characterized by seasonal impact for the summer season in Europe and then we have instead areas like Imaging and computer – and consumer sorry, that affected by fundamental demand at these days and in computer is very specific towards the related to a specific product with a specific customers and a decision of exiting these areas we have made times ago. So you see at the end as you said rightly that the midpoint is an average so now hiding from growth areas that are MEMS analog, the ST-Ericsson business for revenues from product to the some extent in PDP and the PowerMOS and… Peter Testa – One Investments: Okay.

I believe that’s how we will play [ph]. Peter Testa – One Investments: Great. Thank you very much for the answer.

Thank you Peter. Next question Dino.

Next question from Mr. Glen Yeung of Citi. Please go ahead sir. Dinos – Citi: Hi, this is Dinos [ph] for Glen. Thanks for taking my question, just want to touch again on the automotive market. This is sort of straight in the quarter but it sounds like expectations have kind of come in a bit. Can you talk a little bit about what your customers are struggling with the terms of finding components or the shortages or oversupply of any particular ones? And what products are yours are you seeing straightened?

No, I mean it seems that very initially what we saw is clearly a strength and attention in the microcontroller world as far as automotive is concerned, that’s obvious and for obvious reason nearly probably know right to even by one single supplier in Japan. And it seems that the situation has resolved now as we are entering in the third quarter. Let me also mention that as we were hoping and it was a bet that we took three months ago. We were hoping to gain market share in that space and we actually did. We signed a few significant contracts with big customers, but unfortunately we will see most of the revenue kicking in late this year and most probably next year in that space, I don’t know if I answered your question. Dinos – Citi: Yes, thank you.

Thank you Dinos. Next question Dino.

Next question is from Mr. Cody Acree of Williams Financial. Please go ahead sir. Cody Acree – Williams Financial: Thanks guys. On the consumer side, you’ve pointed really just an inventory correction, not necessarily a weakness in demand and we’ve heard a lot of different takes on that during this earnings season. Can you talk about what gives you confidence if that’s not an in demand driven problem that could continue on into later points?

Well the biggest part of our business in digital consumer is set-top box and we talk to the operators. So we talk to the customers about customers and that gives us confidence that the demand is still there, that there is a need for new boxes, new products and they are introducing new services. So we see that once the inventory correction is over, the demand should pick up again. On TV, of course our market share is much slower so the impact on ST is not as important but we also see that with the significant sport events of next year, the demand should be pretty strong. Cody Acree – Williams Financial: And then just secondly on Novathor the reduced the demand outlook that you’re seeing outside Nokia what else is going on at ST-Ericsson that would see reduced demand for Novathor?

Well of course this is more specific and maybe so it would be more appropriate to talk to ST-Ericsson but as I said in general we see a good traction on this product as several customer this Novathor U8500 but also for the so called the thin modem. It is a 21 megabit per second modem. And we see as I said good tractions that several customers and a wave of new phone models mostly on Android from this customer based on either the Novathor or the thin modem. I would not comment on the reduced activity on other customer see here. What we see is more opportunities frankly, I mean then any ramp-up as challenges but we see a wave of forums here that the number is increasing. And of course we are keen and anxious to see that these opportunities transform in revenues quickly. But I would say that we do not having really any bad news here from the other customers. There is a significant reduction – there is a significant customer and compared to what we had in mind but in terms of diffusion and design wins particularly in the Android world, I would say this is pretty positive. Cody Acree – Williams Financial: Nice, thanks guys.

Thank you.

Thank you Cody. We’ll take one more question please.

Final question for the day is from Mr. Niels de Zwart of ING. Please go ahead sir. Niels de Zwart – ING: Good afternoon gentlemen. My questions would firstly be slightly going back to the inventory corrections thing, you mentioned to of course seen inventories related to Nokia and also in the consumer space. Are there any other areas you see needs to reduce inventories in order to sales over to the chain, and my final question would be on your operating expenses, could you may be help us a bit on what you’re expecting for R&D and SG&A going into Q3 and may be Q4?

Yes, so Carlo Ferro will take the second one. I did mentioned in fact the first element on top of north [ph] digital consumer is some correction at certain distributors in Asia where we saw probably due to the reaction to the natural disaster in Japan, we saw probably some equipment losses and of course they need to correct that. So these are the three things that we did mention during the conversation today. I would not say anything else, this is what we see today there is nothing else to mention in terms of inventory corrections. I think that these are the main points.

On the operating expenses sequential dynamic may be to answer the question I have to go back to the prior point I have made about the R&D services that ST-Ericsson just has started in 2011 sold externally. And as while you see the impact in revenues of ST-Ericsson, they go to offset R&D expenses in the ST console. As anticipated as these would continue on the third quarter. So the reason amount, this about $40 million of R&D expenses offset that ST-Ericsson benefit from in Q2 and will not be the case in the third quarter. A part of this effect I would say net of the impact the ST operating expenses would stay substantially flat or will be, we’ll see a slight reduction from this (inaudible) overall about and R&D. Niels de Zwart – ING: Okay, so to be clear you’re guiding that your R&D expenses line could grow up by a bit less than the $40 million which was the revenue forgone by ST-Ericsson in Q3?

Yes, by –

Yes, I am talking overall about SG&A and R&D expenses of ST console and they can go up by $40 million or slightly less than that thanks to the quarter two [ph]. Niels de Zwart – ING: Okay, thank you very much.

Thank you.

Thank you Neil. I think at this point we’ll go ahead and conclude the call, and Carlo if you’d like to make a closing comments?

Well I think as I said it remain then of course we have been working on this during the last two events [ph] we had this bad news coming from our major customers. So we had taken aggressive action in production to concentrate as much as possible, this readjustment during the course of the third quarter. This is mostly impacting the outlook and the expectation that we’re getting on the ST-Ericsson business on certain time it is like Imaging also in ST and Discrete but it’s mostly ST-Ericsson. The rest of the business I think is – well overall it’s a good year. In the first half we grew 17% and definitely how you’re in the market. We are set to grow faster than the market overall during the course of 2011 and also we need expected to improve in terms of on the core business of ST upon on the transition on ST-Ericsson moving from 2010 to 2011 significantly. One other comment here, we are observing degrees of our major customer. This is material for ST we are doing this aggressively and I am sure we will do – we will be doing this rapidly and successfully and I am pleased to see the results in terms of expansion of the customer base is happening now, of course this glitch with our major customer has an impact but we are confident that we will be able to compensate with more customers in the near future. Thank you very much.

Ladies and gentlemen, the conference is now over. Thank you for choosing the Chorus Call facility, and thank you for participating in the conference. You may now disconnect your lines. Bye.