Stanley March - VP of IR Carlo Bozotti - President and CEO Carlo Ferro - EVP and CFO Tommi Uhari - EVP, General Manager of Mobile, Multimedia and Communications Group Philippe Lambinet - Corporate VP, General Manager of Home Entertainment and Displays Group Alain Dutheil - COO and Vice Chairman of the Corporate Executive Committee

John Dryden - Charter Equity Research Nicolas Gaudois - UBS Cody Acree - Stifel Nicolaus Simon Schäfer - Goldman Sachs Tristan Gerra - Robert W. Baird Didier Scemama - ABN Amro Janardan Menon - Dresdner Kleinwort

Hello. This is the conference call operator. Welcome to the STMicroelectronics Fourth Quarter and Full Year 2007 Results Conference Call. As a reminder, all participants will be in listen-only mode. There will be an opportunity for you to ask questions at the end of today's presentation. [Operator Instructions]. The conference is being recorded. At this time, I would like to turn the conference over to Stan March, Vice President, Investor Relations for STMicroelectronics. Mr. March, please go ahead. Stanley March - Vice President of Investor Relations: Thanks Vicky and thanks to all of you who have dialed in and our joining us today for our periodic call this time to discuss Q4 and full year 2007 results. Hosting the call today for STMicroelectronics is our Chief Executive Officer and President, Carlo Bozotti and joining Carlo on the call are Alain Dutheil, our Chief Operating Officer; Carlo Ferro, our Chief Financial Officer; Tommi Uhari, our Executive Vice President responsible for the Mobile and Multimedia Communications Group and Carmelo Papa, our Executive Vice President responsible for Industrial and Multisegment Sector. After some preliminary comments by Carlo, we'll get the opportunity to have you ask questions as Vicky noted. But please during the Q&A session portion of the call, please limit yourself to one question and one follow up so that we can navigate through the queue as quickly as possible and maximize the question and answer interchange. And secondly, some of the comments that we are going to make today are forward-looking, and as such, are covered by risk factors which you can find listed in the release of earnings which were issued last evening after the close of New York Stock Exchange or in our STMicroelectronics filings with the Securities and Exchange Commission. If you have any questions on this topic, please feel free to contact myself or a member of the Investor Relations team. With that brief introduction, I would like to go ahead and turn the microphone over to Carlo Bozotti, our President and Chief Executive Officer. Carlo? Carlo Bozotti - President and Chief Executive Officer: Well thank you, Stan, and hello. Thank you for joining us on this call today. The fourth quarter of 2007 tracked closely to our plans with both revenue and gross margin exceeding the midpoint of our outlook. Earning per share before restructuring and other one-time charges was $0.27. On a sequential basis, net revenues were up 6.9% and excluding our Flash Memory Group, net revenues were up 7.7%. Sequential sales growth was driven by the strong performance of our industrial product offerings and our improving market position in wireless. Year-over-year fourth quarter net revenues increased 10.4% and, excluding FMG, increased 13%. Year-over-year quarterly revenue growth reflected real traction in ST's efforts to improve product positioning in both converging multimedia and power application. Looking at sequential revenue growth by market segment, Telecom was up 11%, Industrial was up approximately 9%, followed by Automotive and Computer, both posting sequential revenue growth of about 6%. As we had anticipated, Automotive returned to growth in the fourth quarter. The only area where results came in lighter than we anticipated were Consumer. Wide [ph] digital consumer increased sequentially, overall Consumer declined slightly due to analog consumer and displays. Looking at our product segment, ASG Q4 revenues increased 9.1% sequentially and 13.3% year-over-year. Imaging products, data storage and application-specific wireless products were the drivers of both year-over-year and sequential sales performance. Operating profit for ASG decreased sequentially due to the impact of currency and on increased R&D expenses that reflected the acquisition of the Nokia design team. IMS revenues increased 5.3% sequentially and 11.3% year-over-year on strength in MEMS and advanced analog products. IMS' operating profit improved year-over-year and sequentially showed resilience in the tough currency environment. And finally, FMG sales increase 1.6% sequentially, but were lower by 4% in comparison to the year ago fourth quarter. Operating profit improved sequentially due to the benefit of suspended depreciation in assets held for sale. Sequentially, gross margin result largely track our expectation. In total, gross margin improved sequentially as anticipated. Excluding FMG, we anticipated a sequential decrease in gross margin due to negative effect of currency and of product mix due to higher weighting of imaging products. Moving to the full year 2007, let me first discuss market position, where we made significant progress. We are strengthening ASG. Our revenue growth of 25% in comparison to the start of the year demonstrates this progress. While ASG grew less than the market for the full year with revenues up about 1%, our position going into 2008 is dramatically improved. In addition, our IMS group, boosted amongst the other by MEMS and Advanced Analog, grew sales over 10% in 2007, well above the market growth. Overall, we believe ST was able to maintain our market position in 2007, growing in line with the market we serve on a strong improvement during the second half of this year. Secondly, our net operating cash flow increased significantly, up 26% to $840 million for the full year. Looking to the fourth quarter, we generated $188 million in net operating cash flow even after spending an aggregate of about $250 million for a portion of the Crolles2 equipment purchase and the Nokia agreement which closed in earlier November. Inventory turn excluding FMG increased to 4.4 times from 3.9 in the third quarter. While this is the second quarter in a row of improvement, we also benefited from some one-time shifts by our customers. We would expect inventory turns to decrease seasonally in the first quarter while we continue to target a 4.5 times range by the end of 2008. Third, our work in repositioning the company has enabled us to report significant improvement in our return on net assets on RONA as we progress through 2007. For the full year, it reached 8.2%. Importantly, in our final two quarters of the year, our RONA excluding FMG moved within our target range of 12% to 20%. And finally, our balance sheet is very solid with cash of almost $3.5 billion and the net financial position of $1.27 billion at the year end. Turning to the first quarter of 2008, let me share our views and then our outlook as a result of what we are seeing. While there is a general concern about the current economic situation and we remain vigilant in this regard, we are not seeing evidence of weakening demand at this point. In fact, our visibility is higher than that of last year's first quarter at the same point in time. Our outlook is based on an assumed average effective exchange rate of $1.46 to 1 euro and on expected FMG results for the full quarter and Genesis' results for the next two months in the quarter. With our current backlog and visibility, we expect that on a sequential basis, net revenues will decrease between 5% and 11%. This is generally in line with our normal first quarter seasonality. For the gross margin, we are targeting 36.3% plus or minus 1 percentage point. Let me spend some time on currency. We speak about this quarter as unfortunately the U.S. dollar continues to weaken. We have made many significant actions to improve our cost structure, but much of our progress has been absorbed by the exchange rate dynamics. For 2007, we estimate that operating profit on a constant currency basis would have been $310 million higher and would have exceeded the 2006 operating profit by $240 million. In response, we will work on four primary axis: portfolio management, restructuring, asset lighter strategy and top line efforts. We are also working diligently on product portfolio positioning and the next milestones here is the completion of the divestiture of our FMG business segment. This will enable us to be 100% focused on our ongoing businesses, ASG and IMS. In addition, we will become less tolerant of those underperforming product families and consider them for tuning. However, we will also look for selective acquisition candidates in our core businesses, converging with the media and power affiliates then improve returns. Secondly, in restructuring, we will accelerate the current effort underway with the separation of the fresh memories in U.S. and Morocco. Third, we with continue to reduce our capital spending. In 2007, we spent 11.4% of sales for CapEx. For 2008, we are reconfirming that our capital budget is targeting a CapEx to sales ratio at or below 10%. Based upon the completion of two [ph] purchases related to Crolles2, we would anticipate a higher CapEx run rate in the first half of the year compared to the second half. It is worth noting that with our asset lighter strategy, we have much more flexibility to manage through potential changes in the demand environment. Fourth, we expect to solidly growth the top line in 2008, outperforming the market and gaining share. We are entering 2008 with a strong product portfolio and customer base. Let me mention a few areas. Wireless is our largest market segment. Excluding flash, it represents approximately 32% of our net revenues. We have a very strong dynamic in our wireless business. We saw good progress in third quarter revenue growth and that continued in the fourth quarter. In addition, we have further ramped the 3G digital baseband business at Ericsson Mobile Platform licensees during the 2007 fourth quarter. The product volume reached in 2007 was basically in line with the plan we articulated at our analyst day in May. Reconfirming what we said last quarter, volume estimates for 2008 are looking very robust. Connectivity continued to have very strong growth, driven by our Bluetooth and wireless LAN positioning. Our new products here are focused on integration of functionality and we expect continued sales growth in 2008. Importantly, we acquired the Nokia IC design team and intellectual property in November. As we know, we are also we are also working on the 3G digital baseband product at 45 nanometers for delivery in 2010. In computer peripherals, we began volume shipment of our proprietary 90 nanometer system-on-a-chip for the data storage market in the fourth quarter and expect this to become an important revenue driver for this segment in 2008. Last quarter, we were awarded a design win for our proprietary 65 nanometer system-on-a-chip, again, demonstrating our technical advances. In Consumer, we continue to lead in the set-top box portion of the market. Whether it is satellite, cable, terrestrial or IP, we are enjoying leading positions and continue to innovate with our 65 nanometer products such as the 7111 and the 7200 devices. In digital television, we will benefit from the intellectual property coming from Genesis and look to expand our presence in the image quality sensitive portion of the digital CD market. In Automotive, following normal seasonal weakness in the third quarter, Automotive was up in the fourth quarter and for the full year. Our automotive products will be an important driver of growth in 2008 as semiconductor content continues to increase. Further, we have important new wins including a Nomadik-based multimedia processor for navigation devices. Our traditional engine and car body design progress continues as well. Turning to IMS, MEMS reached about $100 million in sales in 2007 and we expect the ramp to continue on a steep curve in 2008. In addition, we saw continued progress with our efforts in advanced analog products and microcontrollers, advanced analog target converters, power management and photovoltaic electronics. In MCUs, we are emphasizing our ARM based 32-bit products. So let me conclude by saying that 2007 was a year of significant progress on our strategic roadmap. First, in memory through the creation of Numonyx, then in process R&D by joining the IBM consortium. And in our cost structure efforts and restructuring, we have made important decisions to further strengthen ST. We also made clear and measurable progress in reducing the capital intensity of the company and have likewise driven significant cash flow improvement in 2007. As you can tell, we are looking forward to continuing our progress in 2008. Now let me stop to take your questions. Question And Answer

[Operator Instructions]. The first question is from Mr. John Dryden, Charter Equity Research. Please go ahead, sir. John Dryden - Charter Equity Research: Hi, good morning and good afternoon. Carlo Bozotti - President and Chief Executive Officer: Good morning. John Dryden - Charter Equity Research: First, with the expected revenue growth in ASG, can you discuss what negatively impacted ASG margins? Any more color outside of currency or the imaging mix? And within telecom, what was better than expected and what felt short of double-digit growth? Carlo Ferro - Executive Vice President and Chief Financial Officer: Yes. Carlo Ferro speaking. Good morning, good afternoon everybody. On the ASG margin dynamic, we have not displayed [ph] three major ingredients this quarter. The first one, on top of course, are the revenues growth that you have already mentioned. The first one is the exchange rate hit. There is significant exposure for this Group of R&D in Europe and this Group is significantly reflecting the 6 plus percent reevaluation of euro against the dollar when moving from... into the fourth quarter. The second important ingredient is that in the quarter, somehow the mix of ASG product has not improved and has somehow temporary deteriorated. And the third ingredient is that, as anticipated, we have completed early in November the acquisition of the 3G design team. This is an important addition of competencies to build up product for shipment in 2010. But this is also an additional $7 million expenses in the current quarter... in the last quarter, sorry, I am going forward. Stanley March - Vice President of Investor Relations: John, do you have a follow up on that? John Dryden - Charter Equity Research: I just had a follow up on telecom. It was up 11% sequentially, and I just wanted to know what was above expectations and what may have felt short of double digits. Carlo Bozotti - President and Chief Executive Officer: Well, overall, I think the core business in wireless was very strong. Imaging was very strong. I would say that communication infrastructure didn't grow double digit. So it was very much driven by the Imaging, the camera module and the core wireless business. John Dryden - Charter Equity Research: Thanks for taking my questions. Carlo Bozotti - President and Chief Executive Officer: Thank you. Stanley March - Vice President of Investor Relations: Next question please Vicky.

The next question is from Mr. Nicolas Gaudois, UBS. Please go ahead sir. Nicolas Gaudois - UBS: Yes. Good afternoon gentleman and good job of the quarter. Just wanted to ask a first question on the evaluation of Numonyx. You made a comment this morning that the EV evaluation has been addressed to ground [ph]. I mean should we just make kind of a gross adjustment using the new impairment charters or could you give us a bit more help here vis-à-vis or how we should value Numonyx up close and I've got a follow up? Thank you. Carlo Ferro - Executive Vice President and Chief Financial Officer: Okay. Carlo Ferro again, and, well, I will take your question. Our impairment and restructuring charges this quarter include $249 million related to the Numonyx transaction. This number reflects the combined effect of two ingredients of valuation. One is a factor of the revised term of the deal as they have been disclosed in our press release in late December last year. The second one is a revaluation of our future equity interest in Numonyx that till closing date will be subject each quarter to some tuning after closing will be subject to adjustment based on equity change into the new company. But reason of revaluation at the end for the valuation of our equity interest that we are referring to effect of parameters. A very relevant one is the investment of independent party. Other one are market-related methodologies like trading multiples of comparable companies. So indeed, the effect [ph] the evolution occurred in the fourth quarter suggested to adjust downside by certain extent the expected future equity interest in Numonyx. Having said that, in turn, our overall count was to have our shareholders and investors of course and can confirm that this kind of valuation are subject to third party independent appraisal, and those are... and are based on this respect. But I guess your question was more on the substantial ingredients. Nicolas Gaudois - UBS: Yes, I mean I was just trying to get a quantification of where we are in terms of a valuation vis-à-vis where we have made [ph] to in order for us to have a... to present a more transparent valuation of some of the above guidance of ST. Carlo Ferro - Executive Vice President and Chief Financial Officer: I will say that we are 100% completed at this stage at the current situation, then hold for instance a trading multiple on compel [ph] company dramatically change from now through the end of the quarter when we expect the closing, maybe some possible further tuning may occur, not so significant, since I said that is effect of value methodologies. And I would also highlight that an ingredient, for instance, the exchange rate at the time of closing will affect the final impact. The level of inventory at the time of closing may affect the final impact. So having said that, at this stage, with the additional $249 million, we have recognized where we are so far. I cannot disclose that to. We may have some further mitigated tuning of plus or minus during the first quarter. Nicolas Gaudois - UBS: That's fine. Thank you. And as a follow up, could we come back to Ericsson Mobile Platform? I think there is really nobody that's putting in the industry that... you are hearing? Carlo Bozotti - President and Chief Executive Officer: Yes, yes. Go ahead. Carlo Ferro - Executive Vice President and Chief Financial Officer: We can hear very well Nicolas Gaudois - UBS: Assuming nobody disputing in industry that you are ramping reasonably solidly the new platform into 08, but the question is more for the next generation where there is some clear noise, I would say. But one or two competitors may effectively come back with 65 nano, in particular as EMP has eluded to the fact before that they are considering moving to single chip at 65 nanometer. And ST is really capable of doing that with their CMOS at 45. So could you give us any degree of comfort that you are already designing for the next generation of EMP platforms into 09 or you simply don't know at this stage what's going to happen? Carlo Bozotti - President and Chief Executive Officer: Yes, Tommi? Can you comment? Tommi Uhari - Executive Vice President, General Manager of Mobile, Multimedia and Communications Group: This is Tommi Uhari. So without commenting on the, let's say, integration level, which I think is something that will be seen when the products are out, I think that we can clearly say that our current understanding is that for the next manufacturing nodes, so 65 nanometers, we will clearly continue to command a major share of the EMP business. And I think that the rumors you are hearing are false. Nicolas Gaudois - UBS: Okay. Okay, fair enough. Well, that's comforting. Thank you are very much Tommi. Stanley March - Vice President of Investor Relations: Thank you very much, Nic. Vicky, we'll take the next question please.

The next question is from Cody Acree, Stifel Nicolaus. Please go ahead sir. Cody Acree - Stifel Nicolaus: Thank you. You made a comment earlier, Carlo, that there was some temporary deterioration in the mix of the ASG Group. Can you give a little more details there on what happened, what was the dynamics and then what do you expect for Q1? Carlo Bozotti - President and Chief Executive Officer: Yes, Cody, the ASG gross margin in Q4 has reflected a significant base expansion of sales in the imaging business in camera modules. As you are familiar with this business, structurally ramps at lower margin due to the significant pass through of components like lenses. Frankly, we have also to admit that this is not, given the current competitive structure of the business, one of our most profitable and highest margin business. So I would characterize this Q3 to Q4 dynamic as driven substantially by some very positive news, by the way, of sales expansion and addition of [indiscernible] and camera modules. Cody Acree - Stifel Nicolaus: And how does that trend going through the first half? Carlo Bozotti - President and Chief Executive Officer: Tommi, do you want to eventually translate the question into sales for imaging entering in the first half of 2008? Tommi Uhari - Executive Vice President, General Manager of Mobile, Multimedia and Communications Group: Yes, we see that the relative share may, of imaging versus the other part of wireless, may slightly decrease in the first half. But our visibility here is still somewhat limited, so. But I would think that it will be slightly better than in Q4 in the sense that this would have a higher mix of the products where there is not such a high amount of pass through content as Carlo was already outlining for Imaging. Cody Acree - Stifel Nicolaus: Perfect. Great. Carlo Bozotti - President and Chief Executive Officer: Thank you, Tommi. Cody Acree - Stifel Nicolaus: And then secondly, your comments on weakness in the consumer sector of kind of ex wireless, and some of this may have an overlap with those camera modules. Were you seeing anything outside of kind of normal seasonality or could you give us a little more detail on what you are seeing in this so far as weakness? And then how does that dovetail into what you are seeing as far as stronger visibility this time than maybe you were at this time last year? Carlo Bozotti - President and Chief Executive Officer: Yes. Well, you refer to the consumer portion of our business or in general? Cody Acree - Stifel Nicolaus: Well, you had, I think in your prepared remarks, you said that the consumer portion, they were generally weak in Q4 except for wireless. Carlo Bozotti - President and Chief Executive Officer: Yes, so then... maybe then I comment in general. I ask Philippe Lambinet, he is the General Manager of our Consumer business to comment on consumer clients. Philippe Lambinet - Corporate Vice President, General Manager of Home Entertainment and Displays Group: Yes, basically, we can say that the trend was quite favorable on the digital consumer part of our business. However, we are ramping down analog CRT, basically the old analog CV part of our business. So that's basically what happened. So we were weak in the analog part and in normal shape, in good shape for the digital part. Cody Acree - Stifel Nicolaus: And does that revert as we... is that already hitting the inflection or is that yet to come? Philippe Lambinet - Corporate Vice President, General Manager of Home Entertainment and Displays Group: Well, we have always been much more focused on digital anyway. So the importance of analog is getting lower and lower and the impact of the market variation of the analog part is getting less and less anyway. Cody Acree - Stifel Nicolaus: And then maybe lastly with your hedging efforts in place, obviously, you get some delayed impact of the dollar euro move. Not to be too optimistic, but we've obviously seen a little bit of strength in the dollar lately. If that were to continue, how long of a tail do we have before we see changes to the euro to changes to your income statement? Carlo Bozotti - President and Chief Executive Officer: Well, this is... sorry, Carlo, you go ahead. Carlo Ferro - Executive Vice President and Chief Financial Officer: As you know, our hedging strategy is based on about 60% hedging on the total exposure over a six month horizon. While talking in effect to the current quarter, I would say that should [ph] the exchange rate remain at or below the today level, we may have some very little advantage, some advantage. To categorize, the current guidance is based on 1.46 effective rate and this refers to a expected market rate at a little bit higher than the average rate and outstanding hedging, which is more in the range of 1.43-1.44. For second quarter, we have currently hedged a portion of the target amount, not the total target amount. So we may eventually take some advantage if the year somehow envisage. That for sure is very difficult to anticipate at that time the exchange of the euro-dollar, the euro with this somehow slightly weakening in respect to the U.S. dollar. Cody Acree - Stifel Nicolaus: Great. Thanks for all the help. Stanley March - Vice President of Investor Relations: Thank you, Cody. Vicky, next question please.

The next question is from Mr. Simon Schäfer of Goldman Sachs. Please go ahead sir. Simon Schäfer - Goldman Sachs: Yes, thanks so much and sorry for missing your meeting this morning. I am not sure I understood the answer correctly to a previous question actually. You made the statement about perhaps visibility that you felt was better this time around than it was this time last year. Could you just reiterate on what you are basing that on? Thank you. Carlo Bozotti - President and Chief Executive Officer: Yes, Carlo Bozotti here. I think that of course, we remain very vigilant and we are concerned about the overall macroeconomic situations and risks and vulnerabilities. But frankly, from our customers, we do not see any business trend that is somehow impacted by this. And the [indiscernible] were pretty solid during the fourth quarter of last year and is solid also in the first few weeks of this year. So the concern remains, because of course we must be very vigilant and work together with our customers to track and monitor the order entry and their quarter continuously. But at this point of time, we do not have any evidence of negative strength from our customers. So with the guidance that we have given, we expect to have a important growth Q1 2008 over Q1 2007. There are blocks of new products that will significantly contribute. We mentioned the MEMS, for instance; we mentioned Nomadik; we mentioned Ericsson Mobile Platform; IMS, we continue to growth solidly. So of course, there is a degree of concern for the economic situation overall, but I believe that from our customers, we do not have any specific negative signs at this point of time. Simon Schäfer - Goldman Sachs: Very clear. Thanks. And then just looking at Q1, the guidance that you have given for March is, as you say, kind of in line with historical patterns. But is there any end market segment that perhaps is under growing or outgrowing what you would describe as typical seasonality at this point? Carlo Bozotti - President and Chief Executive Officer: Well I would say that the typical squeeze in wireless is important in Q1. There are other areas like, for instance, automobile where we do not see any decline at all. So I think it's very much... of course, there is a Chinese... the Chinese New Year in China. This is somehow impacting certain consumer products and certain also IMS products. But this very much is in line with what we have... we had in the previous years moving from Q4 to Q1. Also, the bookings that I just mentioned one second ago that we realized in... that we achieve in Q4 has pretty positive impact on the portfolio of orders and the backlog for the second quarter of this year. Simon Schäfer - Goldman Sachs: Thanks. And a basic question just for Carlo Ferro. What was the depreciation in the quarter excluding flash? Carlo Ferro - Executive Vice President and Chief Financial Officer: Yes. Simon, by the way, we missed you this morning. You have been very kind to touch... to justify for that was no need. So depreciation in fourth quarter excluding flash have been $285 million. Simon Schäfer - Goldman Sachs: Thanks so much. Carlo Ferro - Executive Vice President and Chief Financial Officer: Sure. Stanley March - Vice President of Investor Relations: Vicky, the next question please.

Next question is from Mr. Tristan Gerra, Robert W. Baird. Please go ahead sir. Tristan Gerra - Robert W. Baird: Hi guys. Do you expect the Nomadik navigation win to be as significant as any mobile phone type of win and do you expect Nomadik revenues to be up year-on-year as a result? Carlo Bozotti - President and Chief Executive Officer: I think I will comment. Carlo Bozotti here. I think we expect that in 2008, the two programs, the wireless program and the automotive programs, will yield significant revenues and guarantee significant growth on Nomadik compared to last year, both of them. Tristan Gerra - Robert W. Baird: Okay. And as you eventually increase the percentage of production being outsourced, how should we look at R&D this year and next? Carlo Bozotti - President and Chief Executive Officer: You mean expenses to sales on R&D? Tristan Gerra - Robert W. Baird: Yes. Carlo Bozotti - President and Chief Executive Officer: In fact, on R&D, what we are going to do is to keep our expense to sales in 17% to 18%. But what we want to do is to change relative weight of technology versus product. And we had last year or in the past, we had about one-third of expenses were on technology and two-third on product. And what we want is to decrease that and have something like 3% on technology and the rest on product. So the overall expense to sales should the same, but the relative weight of the technology and products would change. Tristan Gerra - Robert W. Baird: Great. Thank you. Stanley March - Vice President of Investor Relations: Thank you, Tristan. Vicky, we'll take the next question please.

The next question is from Mr. Didier Scemama, ABN Amro. Please go ahead sir. Didier Scemama - ABN Amro: Yes, good afternoon gentlemen. Actually, congratulations on your gross margin guidance. I am sorry I couldn't make it this morning. I am not sure you missed me, though. A couple of questions. Carlo Bozotti - President and Chief Executive Officer: We did. We did. Didier Scemama - ABN Amro: You are on tonight. A couple of questions, pretty simple in fact. First of all, can you give us a sense of capital spending for Numonyx in 2008 if you have an idea at this point? And second of all, now that your RF and power management business with SDK [ph] is in house, I mean how do you negotiate pricing with Nokia on those products and are you in fact designing next generation platforms at this point or is it... are these headcounts essentially focused on 2010 HSPA platform? And actually, I just have just a quick follow up, if I may. Carlo Bozotti - President and Chief Executive Officer: Well I would do... I would comment on the first one and then I would ask Tommi to take the second question. So on the first question, of course, I am not going to manage the company and I cannot release any capital investment information for Numonyx. However, on a global base, and I don't want and I cannot get into the specifics, I think that Numonyx is very well positioned to grow with limited capital investment requirement. Overall, the manufacturing infrastructure has been greatly simplified with good potential to move on with the migration of technology in the 8-inch and to expand in China on the 12-inch, and doing this through a very mitigated effort in capital investment. And of course I cannot release figures for Numonyx. But conceptually, I think the positioning is very good because Numonyx could move on with the microlithography evolution in the 8-inch without significant capital requirement. And the capital investment programs in China are very effective from the point of view of increased volume of capital required. And for the portion of the negotiation with customers, I would leave to Tommi. Tommi Uhari - Executive Vice President, General Manager of Mobile, Multimedia and Communications Group: All right. So this is Tommi. So basically, with Nokia, we are in a transition from a business model of providing them ASICs to providing platforms. And then already with the Nomadik offering, we are running this platform business model today. So what we see is that the mix here shifts gradually, and it's fair to say that for the coming years, we still see the ASIC business model also continuing strongly and then meet the capability that we now have having being able to integrate well the teams joining from Nokia for both RF and the mixed signal area, we are able to proceed well in term of super integration of integrating the Nomadik, integrating the modem license technology that we have from Nokia as well the RF and the mixed signal into a variety of different platform combinations, also allowing for monolithic single-chip integration in this regard. So I think that the internalization of all of this know how is absolutely critical for the integration steps that we see on the road. Then on the particular pricing negotiation approach, I'd just say... comment on that to say that the price pressure continues to be strong regardless of the business model that we are working with. Didier Scemama - ABN Amro: Okay, I think that's pretty clear. My second question, or my follow up actually would be in terms of your cash balance which are growing quite nicely, do you see better value in making acquisitions just like you did with Genesis or in maybe buying back your own shares at this point? Carlo Bozotti - President and Chief Executive Officer: No, I think that we want to balance out. This is a very clear position from the management of the company. I think it is clear that portfolio management, as I just read before, is an important pillar of our strategies. We will be less tolerant with some more families after the separation of the memories. But at the same time, we will make an effort to improve the returns through some collective acquisition, focusing on the areas of our core business. In parallel, we want to move on with forms of remuneration to our shareholders, and you know that we have a process. Typically, we do not do this when announcing the first quarter results. It's something that we do then in February and in March before the Shareholders' Meeting. And I think we'll work very hard to run the two in parallel. Didier Scemama - ABN Amro: Are you considering more capacity reduction or a reduction or product pruning such as maybe CMOS sensors or other products? Carlo Bozotti - President and Chief Executive Officer: Well, at this point, I think it's premature to define what is the product family. But I was referring to product portfolio. I was referring to product portfolio. This is the first set, some more tuning [ph], and maybe some acquisition to improve the product portfolio. Then as a second step, I talk about restructuring and simplifying our manufacturing infrastructure. Two years ago, we had 25 manufacturing centers with the separation of memories distinct, and with the separation of memories and with the programs that we have announced already is 15. And I think it's a great simplification, and of course this is not only catching, but this is also important because we can operate on a much smaller number of fabs, optimizing the volume for fabs. Didier Scemama - ABN Amro: Okay. Thanks very much. Carlo Bozotti - President and Chief Executive Officer: Thank you. Stanley March - Vice President of Investor Relations: Thank you. Vicky, next question please.

The next question is from Mr. Janardan Menon, Dresdner. Please go ahead sir. Janardan Menon - Dresdner Kleinwort: Yes, can I actually just start with a small clarification, which is what exactly do you mean by suspended depreciation in the FMG Group? Carlo Ferro - Executive Vice President and Chief Financial Officer: Yes, Carlo Ferro is taking the question, Janardan. The U.S. GAAP provides that when decision is made in final to sell a strategic asset, the reporting company should not long depreciate these specific assets from that moment through the date of actual... when actually the divestiture occurs. So what we mean by suspending depreciation of assets held for sale is that at the time the deal has been signed in late May, so starting from the month of June, sustain assets of flash not designated to be transferred to the joint venture and/or connect between flash business and other business of ST have remained on their balance sheet line in property, plant and equipment and continue to be depreciated. Other assets that are reported in our balance sheet as assets held for sales have been segregated in these specific category of the balance sheet and do not longer carry depreciation. Sorry, the technical matter hopefully has been helpful. Please do not eventually ask again if I have not been clear. Janardan Menon - Dresdner Kleinwort: So just to be clear about it, so your $26 million EBIT on the... in the FMG Group is a result of zero depreciation, is that the correct -- Carlo Ferro - Executive Vice President and Chief Financial Officer: No, no, it is the result of very mitigated depreciation. Carlo Bozotti - President and Chief Executive Officer: But I just want to make clear that the EBITDA of this family is well above this number. So there is... there are other depreciation. So this is... a portion of the depreciation is not in, but a portion of the depreciation is in. Janardan Menon - Dresdner Kleinwort: And once the deal is concluded and it goes into Numonyx, will the depreciation levels go up at that point in time for Numonyx from what you are currently showing in the FMG Group? Carlo Ferro - Executive Vice President and Chief Financial Officer: I will say that... yes, I will say you refer to what we are currently showing that it will go up, but we will not go back to the level of depreciation charge prior to signing the deal, considering that you may have also noticed from our reporting that there is, I would qualify, a very significant write-off on the flash assets during 2007 and of course in the purchase accounting of Numonyx deal will translate into a lower amount of assets to be depreciated in respect to those that the two currently used to carry on their book. Janardan Menon - Dresdner Kleinwort: So would you still say that after the deal is completed, Numonyx will be profitable? Carlo Ferro - Executive Vice President and Chief Financial Officer: What I am saying, and we have... is to confirm what we said since beginning when announcing this deal is that we do expect that apart a few initial quarters, overall, the Numonyx deal will be a accretive to the ST EPS. Janardan Menon - Dresdner Kleinwort: Okay. Just a question for Tommi perhaps, which is you have said that you have shown a RF CMOS capability at 45 nanometer. Are you able to do that at 65 nanometers as well or is it the first time that ST will be able to deliver a RF CMOS, say, integrated baseband RF transceiver kind of solution at 45 nanometer? Tommi Uhari - Executive Vice President, General Manager of Mobile, Multimedia and Communications Group: We are able to do it in 65 as well and we will comment in form of actual products when the time is the appropriate. Janardan Menon - Dresdner Kleinwort: Okay. And my last question is can you just give us an update on your hard disk drive business, how has that sort of trended towards the end of last quarter and how do you see that in the current quarter? Carlo Bozotti - President and Chief Executive Officer: Well I would say that we are pleased about the evolution of the disk drive business and we do not expect a major... I mean the seasonal adjustments in the first quarter is going to be very mild. And this is also thanks to the fact that we have an important block of new products, which is the system-on-a-chip that is based on our own IP that is a 90 nanometer solution for the digital core of the disk drives. So I think Q4 was very much in line with what we excepted and we see a degree of stability moving on in Q1 2008 and then some more growth, particularly driven by the new products that we have now in production and ramping up. Janardan Menon - Dresdner Kleinwort: Okay. Thank you very much. Carlo Bozotti - President and Chief Executive Officer: Thank you. Stanley March - Vice President of Investor Relations: Thank you, Janardan. Next question please, Vicky.

[Operator Instructions]. The next question is from Mr. Nicolas Gaudois, UBS. Please go ahead sir. Stanley March - Vice President of Investor Relations: Nicolas, you are back. We made it through the queue. Okay. Nicolas Gaudois - UBS: Indeed. And again, apologies, there is a lot of following [ph] with you in Paris. Otherwise, I wouldn't be so insistent on the call. Just a quick one on OpEx. Maybe give us a bit more clarity on whether we should have OpEx in absolute terms essentially flat Q-over-Q in Q1 or anything else? Carlo Ferro - Executive Vice President and Chief Financial Officer: Well, Nicolas, I'll say that flattish could be a very, very conservative assumptions. What we are internally targeting in absolute term is to save some dollars in OpEx in Q1 irrespective to Q4 07. Nicolas Gaudois - UBS: Excellent. And then and maybe a very quick one for Alain, utilization rate in Q4 and what should we expect in Q1? Alain Dutheil - Chief Operating Officer and Vice Chairman of the Corporate Executive Committee: Okay. Utilization rate in Q4 average was 85%, and you need to consider like our 6-inch was 86 and our 8-inch 83%; 83% mainly due to what's happening in memory. In fact, we have two fabs Agrate, [indiscernible] and Ang Mo Kio 8 in Singapore which are unloading. At the other end, it's 85%. And on first quarter, we are... we will have about the same. Nicolas Gaudois - UBS: Okay, thank you very much. Stanley March - Vice President of Investor Relations: Okay, Vicky, I think we have time for one more question.

The last question from Mr. John Dryden, Charter Equity. Please go ahead sir. Stanley March - Vice President of Investor Relations: John, you back again too, okay. John Dryden - Charter Equity Research: Yes, a follow up for Carlo please. With respect to the strategic strategy to grow revenue in China, everything was pretty much in line quarter-to-quarter and year-over-year expect for China. Can you talk about why China was up so much in Q4 year-over-year 27% versus 9% for all of 2007? Is that mix shift weighted to Q4 or a strategic timing of your strategy shift into China? Carlo Bozotti - President and Chief Executive Officer: No, I think that is frankly very much related to our customers decision to allocate manufacturing volume into China, and I do not want... of course, I cannot mention the customer name, but we know exactly what it is. And there are some very strong boost in Q4 from some of our customers that have allocated a lot of manufacturing production into China. I would add that we are also growing nicely on the domestic customers in China and well in fact, we define this as Greater China, that is the combination of Taiwan and Mainland China. And one of the target that we have for this year is also to make a big step forward in the domestic accounts. China is already 27% overall of... 27% of the total sales of ST and the weight of the domestic customers is becoming more and more important. John Dryden - Charter Equity Research: Thank you. Stanley March - Vice President of Investor Relations: At this time ladies and gentlemen, this will conclude our conference call. Just a reminder [Call Ends Abruptly]