Carlo Bozotti - President and Chief Executive Officer Carlo Ferro - Senior Executive Vice President and Chief Financial Officer Carmelo Papa - Senior Executive Vice President of the Industrial and Multi-segment Sector Jean-Marc Chery - Senior Executive Vice President, Manufacturing & Technology R&D Tait Sorensen - Director, Investor Relations Philippe Lambinet - Chief Strategic Officer and Senior Executive Vice President of the Multimedia Convergence Group

Gareth Jenkins - UBS Tristan Gerra - Robert W. Baird Janardan Menon - Liberum Capital Lee Simpson - Jefferies Niels de Zwart - ING

Ladies and gentlemen, good morning or good afternoon. Welcome to the Q4 and Full Year 2011 Earnings Results. I am Mira, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. After the presentation there will be a Q&A session. (Operator Instructions) At this time, it’s my pleasure to hand over to Mr. Tait Sorensen, Director, Investor Relations. Please go ahead, sir.

Thank you, and thank you to all for joining our fourth quarter and full year 2011 conference call. Hosting the call today is Carlo Bozotti, ST’s President and Chief Executive Officer. Earlier today we hosted and webcast an event in Paris. Didier Lamouche, ST’s Chief Operating Officer, presented on ST’s achievements in marketing, technology and manufacturing. As the recently appointed CEO of ST-Ericsson, Didier will later today at 5 p.m. CET, host ST-Ericsson’s Q4 earnings call. Consequently, please excuse his absence today. So joining Carlo on the call today are, Carlo Ferro, Senior Executive Vice President and Chief Financial Officer; Carmelo Papa, Senior Executive Vice President of the Industrial and Multi-segment Sector; Philippe Lambinet, Chief Strategic Officer and Senior Executive Vice President of the Multimedia Convergence Group; Jean-Marc Chery, Senior Executive Vice President, Manufacturing & Technology R&D. 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 thank you for joining us on today's conference call to discuss our 2011 business and financial results, 2012 first quarter outlook and our view on 2012 more broadly. 2011 turned out to be a very different year from the one we envisioned at the start. We all know well what changed. The natural disasters in Japan and Thailand, the semiconductor industry downturn, and the more volatility economic and market environment. In addition, we had to face the impact of major changes at one large customer which affected the company, and in a very significant manner, our joint venture ST-Ericsson. As a result, 2011 was a quite difficult period for ST-Ericsson and frankly the next several quarters will continue to be challenging for it. All of these headwinds in combination had a negative effect on our financial performance and even more on our stock price. And we will be working hard and with a sense of urgency to regain the market’s confidence as we move through 2012. One year ago I was speaking to you about our record 2010 revenue results, key product group milestones, such as crossing the 1 billion quarterly revenue threshold for both ACCI and IMS. Market share gains, improved operating profitability, and enhanced capital position. So what can we say about our progress during 2011. First, for our fully owned business, I think we did a solid job of managing through all the headwind. We ended the year with revenues of $8.2 billion, operating income of $933 million, and an operating margin of 11.4% despite significantly lower volumes in H2 2011. Second, within this sales environment, we advanced our market position in our wholly owned businesses. While we do not have final data about 2011, we estimate to gain market share with respect to our sales market excluding wireless. And of course this is based on the most recent WSTS data that are covering through the end of November of last year. Looking in greater detail. Net revenues from our wholly owned businesses increased about 1% in total for 2011. Sales growth was led by AMM, where our MEMS sales more than doubled and drove both an increase in AMM revenue of 7.5%, and an operating profitability to a 20.3% operating margin. Within ACCI, we saw strong growth in automotive as well as imaging. This was offset by particularly weak market conditions in consumer and from our planned exit from the hard disk drive system and chip. In total, ACCI revenues were lower by a little over 1% and the operating margin was 8.9%. PDP had a tougher year due to a specific situation at one customer as we have discussed, and the softer industry conditions, especially in the second half, leading to a 6% decrease in its sales and 2 points decrease in its operating income to 11.2%. Third, we are benefitting from our investment in R&D and capacity additions. 2010 was a record year for our automotive applications and MEMS. And 2011 was a year of record revenues for both our automotive applications and MEMS products once again. Fourth, we are advancing our product portfolio for the future. ST launched or started production of a number of breakthrough products during 2011. In ACCI, we are now sampling with leading customers Orly, the most powerful 32-nanometer set-top box system on chip on the market, and it is receiving excellent reviews. We have achieved several important design wins with our advanced DisplayPort devices. One of these was for the world’s first high definition 3D headmount display being developed by a leading consumer electronics manufacturer in Japan, which uses our Vega chipset. In the automotive industry we were able to assist several major customers who were impacted by supply chain problems following the Japanese earthquake. In particular, our complex 32-bit power architecture microcontrollers for automotive applications from our joint development project with Freescale were used in powertrain and safety applications. Turning to AMM, we continue to expand our extreme analog portfolio with an innovative new high performance, low power digital top port MEMS microphone. And the benefits of this device are quite evident by the rapid acceptance by manufacturers of mobile devices and PCs. Some of our devices are already on the market and used by many of us. We began customer evaluations of our new fingertip touch sensor technology, which combines STs knowhow in analog front-end technology, DSPs and micro-machinery to give users unprecedented fingertip control of their applications. We introduced a complete family of near field communication related devices that are now being deployed on popular mobile platforms such as Android, Windows 8 and others. And to build upon our continuous efforts in energy management and savings, we launched a new generation of smart grid products, such as new smart metering chips for next generation smart meters, including a new power line communication platform that has already been adopted as the core of major smart metering infrastructure deployment in Europe, in China, in Japan and in United States. My fifth and final comment on the progress during 2011 relates to our capital structure which has been a major area of significant progress over the last several years. Let me remind you of the positive turnaround of $1.7 billion in our net financial position from a net debt position of $545 million at the end of 2008, to a net cash position of $1.15 billion at the end of 2010. We continued to maintain the strong level finishing 2011 with a net financial position of $1.17 billion when taking into account the 50% share of ST-Ericsson debt. And our financial resources totaled $2.3 billion at December 31. This was achieved while undertaking an exceptional high level of CapEx of $1.26 billion as well as ongoing investment in wireless through ST-Ericsson. Now let me share some comments on the 2011 fourth quarter and then discuss our outlook going into the 2012 first quarter. As our fourth quarter results indicate, we executed in line with what we had anticipated and shared with the market in October. Fourth quarter revenue was $2.19 billion, within the range we provided of $2.15 billion to $2.3 billion. In addition to revenue our fourth quarter gross margin was aligned with the mid-point of our guidance coming in at 33.4%. Let me remind you that this figure includes about 5 points impact from un-saturation charges. We took aggressive actions to bring down our inventory levels. As you saw from our balance sheet figures, we reduced inventory by $170 million and our inventory turns increased to 3.6. Similar to last quarter, our product families revenues and operating results were also consistent with our expectations. Further, from a cash flow perspective, we had anticipated a very substantial sequential improvement in our free cash flow during the fourth quarter. And that was indeed the case with the return to positive free cash flow of $47 million in the fourth quarter following several quarters of heavy demand on it. And we had indicated that capital spending would be down sharply and that was the case with CapEx of $79 million during the fourth quarter. Turning now to our first quarter outlook and 2012 more broadly, let me share a few observations. We believe that bookings bottomed in the fourth quarter. In the first quarter when compared to the fourth quarter of fiscal year ’11, we expect billings will also bottom as we see stronger than seasonal billings for our wholly owned business, offset by a significant weaker revenue performance from ST-Ericsson. We believe there would be a recovery in the semiconductor market but we want to remain cautious given the uncertainty in the market and the macroeconomic situation in Europe. Inventory has been substantially reduced, including in distribution, so once demand restarts we expect to see a return to growth. Looking ahead at STs first quarter outlook in great detail, we anticipate that our wholly owned businesses will see less seasonality. For our automotive business we are encouraged, so here we anticipate perhaps flat to slightly higher revenue sequentially. With respect to digital consumer, we would anticipate a normal seasonal decrease, analog and microcontrollers may be stable to slightly up, and for power and discrete products, somewhat better than normal seasonality. For ST-Ericsson we expect a very significant sequential decline in net sales resulting from a combination of higher inventory at some of their customers, further weakening of legacy product sales, the effect of first quarter seasonality as well as the reduction in the short term of new product sales with one of their largest customers. With respect to our gross margin, our expected performance takes into account an improved but still high level of un-saturation charges as we want to continue to focus on maintain appropriate inventory levels in light of the continued uncertainty in the marketplace. So our first quarter gross margin outlook of 33% at the mid-point assumes about 4 points of un-saturation charges. At our third quarter conference call we indicated we anticipated a high of un-saturation for the first quarter to give you an advanced view. With respect to capital spending, looking at 2012 in total, we anticipate that our investment would be focused on normal fab maintenance and on advancing our technology for 20 nanometer. Currently, we do not see the need for any significant capacity expansion. So overall, a much reduced level of capital spending for 2012 compared to last year. Turning to our ST-Ericsson joint venture. We are clearly focused with Ericsson and the entire ST-Ericsson organization on seeing how to materially improve its performance. As you saw, Didier Lamouche, ST’s Chief Operating Officer, assumed the position of CEO of the joint venture in late November. There are three main areas of focus at the joint venture. First, is on improving execution and making sure everything is delivered on a timely basis and in sync with customer expectations. Second, the JV needs to take advantage of the new platform offerings, proliferating design wins and volume production levels. Third, we are currently evaluating what the breakeven level needs to be based upon resizing the revenue ramp in order to ensure a financial model that can sustain profitability. In summary, there are really two very different situations with our wholly owned businesses representing 84% of our total revenues and creating venue for all our stakeholders. We had anticipated that 2011 would be the turnaround year for the joint venture. That was not the case and it is in fact taking away a good deal of ST’s market capitalization. We will not let this continue. Therefore, ST-Ericsson is in a crucial phase focusing on improving execution, lowering its breakeven point and reviewing its road map to sustainable profitability. We are confident that the newly appointed Chief Executive Officer of ST-Ericsson is the appropriate leader to drive this turnaround. And for ST more broadly, we will continue to focus on enhancing our market position and operating profitability. Even during 2011, a more difficult year, we delivered revenue growth, market share gains, and higher operating profitability in a product group like MEMS automotive and imaging and continued to invest in a number of selected areas. Our sharp focus on capital management allowed us to maintain a strong financial position. And now we will be happy to take your questions. Thank you.

(Operator Instructions) The first question is from [Amit Archandani] from Citigroup. Please go ahead.

Hi, thanks for taking my question. Two of them, if I may. The first question is around your end markets. While it might be difficult for you to talk about the full year, could you at least share your thoughts on the sequential growth pattern that see emerging in Q1 and Q2 for your different end markets, ranging from automotive to distribution? And the second question if I may, on the MEMS business. Could you maybe talk about your efforts to diversify your customer base and the opportunities beyond consumer MEMS that you could potentially look at, given your heritage as a diversified chip maker. Thank you.

Okay. So let’s start. I think we have experienced during last year, starting from the second part of Q2, a strong reduction of bookings, I would say a massive reduction of bookings. And this was very much across the board, both from a geographical point of view and also from an application end market segment point of view. Today, as we said, as I said, we believe we have bottomed. And during the second part of last quarter we have seen mild recovery of bookings and this was across many product lines. And also across the geographies. Overall, if you look at the book-to-bill situation, indeed it improved, moving from Q3 to Q4, and important region like greater China and Southeast Asia is today already above the parity in terms of book to bill. During the course of last quarter not only we have significantly decreased our inventory position in ST, but our distributors have done the same. And our expectation is that this will soon come an important an opportunity to generate more business moving on in the quarter. If we segment by business, I would say that in our, what we call the extreme analog, the MEMS, the very advanced analog products we expect to grow. This is an important driver, it has been an important driver and we believe it will continue to be an important driver. We expect to grow also in automotive. This is again pretty much broad range both geographically and from an application and technology point of view. We expect this year a recovering consumer. Last year was particularly difficult in consumer. We did not enjoy, really from a market point of view, any of the real drivers. This is the year of the Olympics, for instance. And we expect some improvement in the fundamental of consumer. Of course we are concerned about the macroeconomic situation in Europe and this is impacting particularly the mid-size customer base in the industrial field. Overall, in Q1, the revenues for the ST wholly owned business are, I would say well above the seasonal trend. There are areas, as I said, where we will be increasing, there are areas where there will be a limited, very limited reduction. But overall I believe that in Q1 the wholly-owned business of ST would perform better than seasonal trend. And finally, wireless. I think the case of wireless for us is very specific because I would say particularly in ST-Ericsson but for certain products in ST that are intended to wireless application we have been impacted and we are impacted very significantly in Q1 by the position at our major customer both in terms of reduced demand and also in terms of reduced prospect due to their strategy change. So summarizing, we are encouraged by the sign of improving bookings that we have experienced during the second part of the last quarter. We want to remain prudent in terms of loading because we are of course concerned about the overall macroeconomic situation, particularly in Europe. But at this point I believe we have reached the bottom and we should move on starting to grow again in bookings and of course from Q2 also in terms of revenues. And I will leave Carmelo the part on MEMS and what are the new drivers, both in terms of new products and in terms of new applications.

Yes, I would like to separate my answer in two parts. One is the way we are addressing the market with MEMS and the other is the product that allow us to address the market. Very briefly, we starting with the gaming industry. It was a very success story and then from there we moved into computer laptop and hard disks and more then that into smartphone, which have been a great success story. We are now not abandoning this segment because there are new products that will fit in this segment by enlarging the scope into the industrial arena, into the healthcare and fitness, and into the automotive. Don’t forget that we are number one in MEMS, excluding automotive. If you consider automotive as a 50% of the total market, we still have a great opportunity ahead of us. So this technology has been tested foolproof for automotive after so many years, so this is a great opportunity that will materialize starting from 2012 onwards. Take also into account that in automotive it takes a lot of time in terms of design-in and so, but this will be material from 2012 second half and ’13 onwards in terms of products. So we still keep pushing and very visible in terms of result with gyroscopes and accelerometers, with their evolutional products. And then there will be the new products like pressure sensors, not only for mobile phones in terms of altimeters but also for industrial application. The active microphones and the compass. Some of this products may go into in standalone, some may go together into this so called (inaudible). So all of that allows us to say that the MEMS will be also in a good year also for 2012.

The next question is from Mr. Gareth Jenkins from UBS. Please go ahead. Gareth Jenkins - UBS: Two very quick ones if I could. I just wanted if you could comment on inventory in the channel that you are currently seeing. I think one of your competitors overnight talked about distribution, inventories being at record low, 6.5 weeks. I just wondered how that feels to you. And then secondly, just on the OpEx side, I wondered if you could give us a sense for 2012, what your intentions are with regard to R&D in particular? Will we see that up in 2012, if there are any budget areas that we will see up. Thank you.

Carlo will take it.

Good morning, good afternoon everybody. Carlo Ferro is taking the question. So on inventory on the channel we have quite a similar view of other competitors at this point. We see the channels much much cleaner then, as they were entering the fourth quarter. We have to consider that we have significantly under-shipped the distribution during the last six months. I mean that our selling, distribution has been significantly lower than the sale out of our products from distributors to final customers. So in this respect we are somehow encouraged that we are entering the year with quite a healthy situation and for sure lower inventory in the distribution channels. The second part of your question is about the operating expenses. I understood your question about the full year and you please understand our guidance approach which is more on a quarter after quarter basis. On a quarter after quarter basis, I would eventually suggest to model some, a few tens of million dollars higher expenses then Q4. This is due to a combination of the seasonal effect of having higher number of vacation days in Q4 as opposed of Q1. And also we have to consider and you may have noted that Q4 OpEx has been below Q3 OpEx level, slightly below the Q3 OpEx level. Again, the seasonality and this was also due to the fact that having a number of incentive target being missed during 2011 in Q4 expenses that take somehow some advantage of the reverse of accrued incentives. So overall, you may expect OpEx in Q1, in dollars, higher than Q4. For the rest of the year there are significant actions there. There is an important initiative of focus and simplification within all the company, within also the ST businesses addressing the G&A area. There are significant opportunities of synergies in the G&A between ST-Ericsson and Ericsson, that under the current, if (constant), the situation of ST-Ericsson will be addressed and taken. And there is of course the continuation of the ongoing phase of the restructuring plan of ST-Ericsson. I mean the one that has been anticipated in June last year on top of what may eventually occur with some additional strategic consideration which is too early at this stage to share with you.

The next question is from Tristan Gerra from Robert W. Baird. Please go ahead. Tristan Gerra - Robert W. Baird: Hi, good afternoon. You mentioned on the call that you see no need for significant capacity expansion. Your competitors yesterday said that it’s ramping its all fab capacity. How do you see the risk of potential of a capacity in the industry as a risk this year and also if you could talk about pricing trends, expectations for this year and also your outlook for Q1.

Yeah, I will say that in the end it’s true the industry is in a phase currently of absorbing available capacity and in this respect, frankly, the situation going forward cannot be but then easier and better than the one that the industry has incurred in the second half of the year. And then in respect to pricing, it’s true that there is some effect of that but it’s quite -- it’s somehow quite relative. This morning in the conference, and everyone may find it on the website, we presented for instance, an analysis of the operating -- the margin dynamic of our wholly owned business in first half and second half. It’s slide number 20 of this package. And you may note that the pricing impact in second half has been very very much similar to the one in the first half. The structures there are very similar. So this is something that we are obviously prepared to address and to take. And as usual, the rule of the game is innovation. And in this respect we are encouraged. And I make again a reference to this same chart of this morning’s presentation. We are encouraged on the fact that in both the two half of the year the product mix has positively contributed to the operating margin. Tristan Gerra - Robert W. Baird: Thank you. And just a quick follow up question. Are you able to quantify how much is the impact of your large wireless customer on the revenue guidance for Q1 and also should we look at the difficult comparison from that customer pretty much behind by the end of Q1, or do you think there is more to fall I other quarters?

Maybe I will, eventually, I know whether we want to add that, overall consideration about this situation. On the specific question on the impact of the largest customer on the Q1 guidance has, this really effects the ST-Ericsson business and Tait has reminded we have Didier and his team ready on discussing that result and prospects in an hour and half. My suggestion is not to burn all the questions for Didier -- also just to address in the ST-Ericsson call.

The next question is from ....

Sorry, as a follow up really -- encourage me to give more color. It’s very significant. It’s very significant also considering that there are two implications. One implication is the acceleration in the phase out of revenues for legacy products but the other implication is that under the decision on the (similar) road map of the customer ST-Ericsson is incurring is that the ramp up new products with this customer is much much lower than what was expected.

The next question is from Janardan Menon from Liberum Capital. Please go ahead. Janardan Menon - Liberum Capital: Hi, good afternoon. Thanks for taking the question. My question is also on ST-Ericsson but it’s a fairly top level, high level question. You have been trying to turn this around for now for well over two years and the business actually seems to be getting worse as anything into the current year. And it looks like, even if it is turned around over the next couple of years, the cash burn would be quite heavy as well. I just want to revisit as to why in your minds ST-Ericsson is important to STMicroelectronics. And what would be the negative impact on the wholly owned businesses if you were to try and sell ST-Ericsson to a private equity company or to shut it down or something like that? That would be my first question. Second is a smaller question. You have talked quite highly about the new set-top box chip, the Orly. Is there any signs that you could be taking market share back in the U.S. satellite market on the back of that chip in terms of design wins or interest that you may have already got from the customer base.

Well, let's start from the first one. Of course it is important when you look back to what happened during the last, you know 24 months or so. Also try to understand what is the root cause of the problem. Because we should not, you know, reach conclusions, wrong conclusions if we do not understand well what are the root cause of the problem here. There is one main problem that ST-Ericsson had to face and is facing today, is -- and ST is facing this problem, is the much reduced demand from one major customer and the change of strategy of the same customer. This is of course tremendously impacting ST-Ericsson but it is also impacting ST. With Nokia, if I go back a few years now, we were even above 20% of total sales for ST and in 2010 these represent between, I believe 14%, 15% of total revenues. I think we are now about 10% of (inaudible) and we expect it will decrease. So of course it is a very important customer but will be one of the many important customers that we have. So this is the problem that we are facing and this is the major problem that ST-Ericsson is facing. Now, I believe ST-Ericsson has the ingredients, the tools to succeed in this market by expanding the customer base, focus strongly or more strongly on execution and very importantly also on lowering the break-even point. And we see, of course let’s say a package of things that are on the table. Management is today reviewing the product road map. The management is reviewing the business plan. And there are many things that we can do. And, including, extracting synergies, significant synergies in the area of application processors, between what we do in digital consumer and what Ericsson, ST-Ericsson does for smartphones and tablets. So I think we are convinced that ST-Ericsson remains and important opportunity to create value for the company and I think ST-Ericsson is focusing on products and applications that are more and more converging with what we do in digital consumers. So we believe it will be more and more important and possible to extract synergies from this convergence. And these are the reasons that are encouraging us to support this joint venture. On the other hand it’s obvious that we need to face the realty and therefore we are absolutely committed to make sure that there is all the sense of urgency that is needed to turn this company around by lowering the breakeven point, focusing on simplifications, making sure to extract all the synergies between the company and the parent, looking at opportunities of partnerships etcetera. So I think this is what is on the table today and management is working on this plan and we are of course absolutely committed to address this challenge with the strongest sense of urgency.

May be I can take the second part of your question about the Orly chip and its use to gain market share in North American satellite market. I will start to say that the Orly chip is a very high-end chip which basically delivers the performance that others have been promising. So we had a pretty formidable competitor who has been trying to enter our market. A U.S. company very successful in the PC segment, if you see what I mean. And they have promised certain performance levels and Orly is finally delivering on those promises in a way. So you can look for Orly to penetrate the kinds of markets that this competitor had been targeting, which is mostly IPTV and cable in fact. So the first impact on sales will be in IPTV and cable because it’s basically going to gather some design wins in those areas that our competitor was targeting. Now as far as American satellite is concerned, we had already actions in place even before Orly was on the market, to regain market share in American satellite. So Orly may contribute to this at some point, but probably not in 2012. In 2012 we have other products that will allow us to gain share in American satellite. Beyond 2012, so looking at 2013 and beyond, yes, we certainly hope Orly will contribute in that market as well.

(Operator Instructions) The next question is from Lee Simpson from Jefferies. Please go ahead. Lee Simpson - Jefferies: Hi, good afternoon, gentlemen, thank you for taking my question. Just wanted to ask a question on the emerging free cash flow story. I was just wondering if you had a CapEx to sales that you were comfortable with this year and how that might change should indeed high end analogs and MEMS continue to ramp as strongly as they are?

At the end our ability of extracting free cash flow as you rightly highlighted, it’s a combination of product margin and the capital intensity. I have to say that 2011 in this respect was, frankly, not a great year, it was of the intense capital spending in the first half of the year. To build this capacity for MEMS and automotive that has been then well used and loaded and fueled these two businesses to substantial growth in 2011, one doubling and the other one increasing by 18% of sales. And the gross margin which instead, in the second half took the charge for unused capacity in other technologies and in other fabs. So overall it has been a year 2011 (inaudible) in respect of free cash flow. The fourth quarter is already at the inflection points. As you have noted, as we turn to $47 million of free cash flow generation which let me remind, that includes one other percent of the burn of the cash by ST-Ericsson, not only our 50%. And then we are encouraged that in 2012 the combination of much more moderate capital spending, continuing to controlling inventory and accelerated cash conversion cycle, and improvement in the overall dynamic of gross margin and EBIT which have led into a solid, positive free cash flow for the year. Of course, in the wholly owned business, somehow reduced by the use of cash in ST-Ericsson that will continue through 2012. However, the balance of the two will be a positive free cash flow as reported. Including the ST-Ericsson free cash flow. And I believe that we will start from this current quarter and deliver again as in Q4 a positive free cash flow. Lee Simpson - Jefferies: Perfect, thanks. I just wanted to a quick follow-up, maybe a question or clarification. You mentioned PDP could grow this year. I wondered if you could just may be reiterate what the rationale was for PDP growth this year and what sort of a level of growth are you looking for?

Well, this year, Carmelo speaking, this year we saw a decrease in business for two major reasons. There was a price drop and there was a major decrease at a single customer for what we call the iPad. This explains the result or the decrease. So the overall market and then a major decrease at one customer, a single customer. For next year -- sorry, for 2012, we have a very good element to be confident. Of course a lot depends how the market will evolve. But we have new products. We have the IGBTs, more than ever in good shapes in terms of product offering. We have the modules and we have all the activities that we are doing with the other customers, also for the iPad, an activity that we started two years ago, almost. Therefore we will grab market share. Then the final result will depend on the general growth of the market. But we have our ingredients in terms of new products.

The next question is from Niels de Zwart from ING. Please go ahead. Niels de Zwart - ING: Good afternoon, gentlemen. Couple of questions. First of all on the cycle. You clearly indicated that you believe bookings have bottomed and will increase into the first quarter of 2012. Can you give any feel of what type of uplift we could expect for your revenues if your shipments would start tracking end-demand again, so if the inventory correction would be fully over? That would be my first question. And my second question would be on ST-Ericsson. You’re clearly indicating that actions need to be taken for ST-Ericsson to get on track to profitability again. Does it indicate that for the coming quarter your expectations for the contribution to operating income are relatively flat so with the results remaining at the current level or do you foresee improvements going forward, maybe on the back of the restructuring already initiated. Those are my questions so far.

Yeah, I would take the second question on ST-Ericsson and I believe Carlo will take the first part of your question. So, well, yes, we expect costs for ST-Ericsson, frankly, that Q1 is the bottom. And this is related to two things. Despite the major problem with one -- with the larger customer, in fact there is a wave of design-wins, particularly in the world of Android. And some of these products have started, some of these products will start in Q1, some of these products will start in Q2. Therefore from the bottom of Q1, we expect a continuous improvement on the top line. However, compared to what was the visibility 12 months ago and even with what was the visibility six months ago, this growth per say is not at the level we expected for the reason that I said, therefore we need to add to this a more decisive action in terms of lowering the breakeven point of the company. And as I said, on the table there are many things starting from extracting G&A, synergies between ST-Ericsson and the two parents, extracting important synergies in the R&D, again between ST-Ericsson and the parents. Looking at partnership opportunities, reviewing the scope of products and in general improving execution and focusing on cost reduction. So we need two things and definitely we think that the bottom is Q1 of this year.

Niels, can you rephrase your first question, please. Niels de Zwart - ING: Well my first question basically was to get a feel for how much of a rebound you could see in quarterly revenues once your revenues start tracking end-demand again. So once the inventory correction is fully over and, yeah, your customers, especially in distribution will no longer reduce inventory.

Yeah, of course Carlo will take this, and we have our numbers but we also need to be prudent in giving -- of course it depends a lot on the macroeconomic situation overall. And this is exactly type of mistake that vis-à-vis the loading of our fabs, we do not want to run the risk to do. And also we are very cautious in terms of loading in the fabs, because simply looking at historical from customers, from the product groups, the prospect may be good, but on the other hand we need to make sure that we do not run the risk to be too optimistic vis-à-vis the overall macroeconomic situation and the uncertainties related to this situation. But anyhow, Carlo?

Yeah, frankly, it’s a little bit difficult questions and when I heard the question I was, if you allow me a joke, wondering whether you’re expected to be in a call for an utility for company. For a semiconductor company it’s a very difficult question since of course this is an always a continuous big and tough game on which at the end of the day the rule of the game for us is flexibility, is agility. So I could say easily, I would say, say that at under, I would say the current status of the business, of course ST today is a company that on a baseline may run with revenues in the range between $10 billion and $11 billion, normalized on a cycle. Based on the portfolio, based on the customer base. At the end of the day what is important for us is the flexibility, what we are (inaudible) about the second half of 2011 is that the downturn came to early or eventually our actions have been only the midst of the completion in order to gain a higher level of flexibility with foundry, with subcontractors, with reduction and flexibility of the manufacturing footprint. Thus the impact of the cycle on our gross margin in the current quarter and in the prior two quarters have been too much more severe than what it should be and it will be in the future. So at the end of the day your question is very valid. However, for a semiconductor company I believe that the management focus is really on gaining as much as possible flexibility. We are doing that. We are substantially duplicating the qualification of technology between the foundry, the internal fab, in order to have a higher flexibility. Similar for the assembly packages between our plants and the sub-contractors and the intent is to create a significant buffer of volume outside (inaudible) repatriation and quick ability to repatriate, we will be able to mitigate the overall volatilities of demand, which remains a characterization of this industry. Niels de Zwart - ING: Okay. Thanks a lot.

I am not sure whether I answered your question, we did the best. Niels de Zwart - ING: Yes, the color you provided is very much appreciated.

The next question is from [Shawn Conner] from UBS. Please go ahead.

I am just trying to figure out real quick on ST-Ericsson if you can maybe talk a little bit about funding needs for 2012. I believe they have used up most of their funding that you had guaranteed them. Are you going to have to expand their, basically their debt levels, or what they would owe to STMicro?

Yeah, I -- Carlo Ferro is taking your question. As anticipated since now several quarters, ST-Ericsson is funding its temporary cash needs in this transition phase by a combination of some independent working capital financing and a parent line from the two parents, which is 50:50 shared between Ericsson and ST. And frankly, as you can imagine, at the end the capability of the first source is somehow complete and more recently the parent line have increased to the amount of $800 million overall. $400 million for ST, $400 million for Ericsson at the end of December. Our assumption is that they would need additional funding support during the next future is correct. Together with the partner we have agreed for the first quarter to go ahead and increase the parent line. I am not sure whether under the disclosure protocol between Ericsson and us I can exactly share the amount, but there will be some additional few hundreds of million dollars of course to be divided 50:50 each.

I think we will take one more question please.

The last question is a follow-up question from Mr. Gareth Jenkins from UBS. Please go ahead. Gareth Jenkins - UBS: Thanks. So quite a specific question on MEMS, if I could. I just wondered, it seems like there was a few smaller competitors coming out offering CMOS based MEMS via the foundries or looking to do this. And I just wondered what your view is in terms of the threat posed by some of these companies coming through and really the competitive levels within MEMS going forward. Thanks.

Carmelo will take this. We treat all our competitors equally. There are -- we need to be careful with all. But we want to be paranoid in this business, and I leave the work to Carmelo.

Yes. What is coming into effect is the fact that compared to previous years there are more bigger names coming into the MEMS, because the market is attractive. It’s booming all over into various segments and therefore this attracts also big guys. But the good point about this thing has been that we started first an entire 8-inch wafer fab both for the mechanical MEMS and the companion chip that the analog A to D convertor. We were the first among big and small compass. This is a competitive edge that we are still leveraging on because it allows us not only to have a larger number of dyes on a wafer but also it allows to maneuver in terms of shrinkages that we are doing continually. And on top of that there is the product portfolio is continuously enlarging, and that is to say the innovation rate has been one of the largest factors allowing us to penetrate big customers. And I like to recall that in every segment where we have been going, have become number one. With the exception of automotive that we excluded by decision at the very beginning. We wanted to play safe with the technology. And now, starting from now would be also the year of the automotive that with 50% of market to grab. So we don’t fear anybody. We respect everybody but we think we have all the ingredients to go all alone. We have the manufacturing capacity, we have doubled, more than doubled the manufacturing capacity. We have the new products. There are lots of promises and the customer are delighted to work with us. So no fear but a lot or respect.

Thank you, Gareth. Carlo, any closing comments? Okay, I think on behalf of Carlo and the entire ST management team we appreciate you attending the conference call. Thank you and have a good day.

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. Good bye.