Tait Sorensen – Director, Investor Relations Carlo Bozotti – President and CEO Didier Lamouche – Chief Operating Officer Carlo Ferro – Chief Financial Officer Carmelo Papa – Sr. EVP, Industrial and Multisegment Sector Philippe Lambinet – CSO and Sr. EVP, Home Entertainment and Displays

Stephane Houri – Natixis Andrew Gardiner – Barclays Niels de Zwart – ING Gunnar Plagge – Citi Jerome Ramel – Exane BNP Paribas Tristan Gerra – Robert Baird Francois Meunier – Morgan Stanley Bernd Laux – Cheuvreux Didier Scemama – RBS Guenther Hollfelder – Unicredit Sandeep Deshpande – JPMorgan Janardan Menon – Liberum Capital Gareth Jenkins – UBS Johannes Schaller – Deutsche Bank

Good morning or good afternoon. This is the Chorus Call Conference Operator. Welcome and thank you for joining STMicroelectronics Q3 and First Nine Months 2011 Earnings Results Conference Call. At this time, I would like to turn the conference over to Mr. Tait Sorensen, Director, Investor Relations. Please go ahead, sir.

Thank you, Dino, and thank you to all for joining our third 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 thank you for joining us on today’s conference call to discuss our financial results, product advances and outlook. I’d also like to share with you our initial views on the early part of 2012. Turning first to an overview of the third quarter as you’ve seen from our press release, our third quarter results were substantially in line with the output – with the outlook we had provided. At that time when we set the third quarter range in July, our outlook may have surprised people, but in fact we were subsequently proven correct by the number of semiconductor companies that pre-released in the September timeframe. Looking at the ST’s result net revenues decreased 4.9% sequentially other end of our range, reflecting the overall weaker economic situation in different regions and end markets, we had began to note in June as it was further progressive weakening over course of the third quarter. Gross margin also came within our guidance range, in fact is largely above the midpoint with gross margin of 35.8%, one of the key component of the sequential decrease relates to the anticipated underloading of our wafer fabs and resulting unused capacity charges. Here we are responding to lower demand from a major customer, as well as working to bring down our inventory levels in general due to the softening we were seeing in several product families including digital consumer and microcontrollers. Beyond revenue and gross margin, our wafers product families revenues and operating results also attract to our expectation. Inline with our approach to the third quarter let me show our outlook for the third quarter and directionally for the 2012 first quarter. We think it is appropriate to report the broader and more significant weakness in the semiconductor market environment that we are experiencing. Here is a good deal of macro uncertainty and so we think it is reasonable to take this level of caution going into the fourth quarter and the beginning of 2012. Today our best judgment is that fourth quarter net revenues will decrease sequentially approximately 8%. We’ve seen an overall revenue range of about $2.15 billion to $2.3 billion. We expect weakness in most of our product segments with the exception of wireless, where a slight sequential increase in net revenues by new product penetration is anticipated. Our fourth quarter gross margin outlook is about 33.5% with plus or minus range of 125 percentage points, compared to our normal 1 percentage point assumption to take into account increased market uncertainties. Our gross margin outlook mainly reflects lower volumes and further substantial (inaudible) charges higher than those experienced in the third quarter. Our goal had been to bring inventory into full alignment or close there to in the third quarter. While we did make progress even the further weakening of the semiconductor market we are continuing to take aggressive actions. For example, we have initiated programs to significantly reduce activities at our fabs using the highest flexibility provided by the local levels in each jurisdiction we operate during the fourth quarter to align with where we believe the market will be. With respect to capital expenditure, we anticipate the second half expenditure in total will be substantially lower than the first half, as we outline last quarter and that remains our expectation. The third quarter level of $384 million reflects the equipment that was delivered in the first half and paid for in the third quarter. So there is some lag to the reduce spending. Looking to the fourth quarter the figure would be very significantly reduced. Without giving a specific free cash flow outlook, based upon our investment plans and fourth quarter revenue outlook. We anticipate a very substantial improvement in our free cash flow. During the fourth quarter, following the last two quarters of negative of free cash flows. Based on our experience with the industry cycles, we practically took action steps last quarter to help and navigate through this period and maintain our solid financial position rather than wait for more concrete signs of more then in multi quarters semiconductor inventory correction. At October 1st, cash and short-term deposit equaled $2.55 billion, total debt including 100% of ST-Ericsson debt as consolidated by ST was $1.71 billion and our net cash financial position was $827 million. However, about $1 billion in committed credit-facilities remain in place and we plan to continue in the near-term to reduce that including the potential redemption of our convertible debt in February 2012. And let me be very clear here even with the heavy investment to support R&D at ST-Ericsson our financial position is strong and we’ll remain so. We do anticipate at this point that fourth quarter market conditions will likely impact sequential revenue trends into the third quarter. So our caution extends in 2012. As the gross margin line based on current visibility fab underloading will continue into the first quarter of 2012. At this point, now let’s turn back to the third quarter of sales in further details. As I indicated total revenues were substantial in line with our expectation. Looking by product segment ACCI revenue came in slightly below $1 billion. Sequential result reflected market weakness and also our anticipated exit from hard disk drive system and chip. We did benefit from year-over-year growth in both Automotive and Imaging which were also two areas of strength during the second quarter. As we outlined last quarter our Power Discrete Product sales are being negatively impacted by lower demand largely related to a major customer and softer than expected demand in the industrial markets. AMM was lower sequentially but posted year-over-year growth, thanks to our MEMS business. We remain on track where our MEMS business to double in 2011, compared to 2010 as MEMS sales for the first nine months have grown by almost 130%, compared to the year ago period. Wireless showing the progress of ST-Ericsson posted a sequential increase in net sales of 18.8%, but it is down significantly year-over-year with substantial operating losses. Let me turn now to a brief review of our nine months results, which demonstrate the sales advances and improved profitability for all of our wholly-owned businesses. Looking at the top-line net revenues from our wholly-owned businesses increased also $1 billion or 9.3%, which is clearly higher than the expected market growth. AMM net revenues increased by 18.6%, ACCI rose by 5.7% and PDP by 3.5%. When you think that this sales expansion was made while also facing headwinds including the market softening and customer specific issues affecting several product segments, it is certainly a solid result. In particular, we saw growth in MEMS, Automotive, ICs, Microcontrollers and Imaging products. Based upon these figures our wholly-owned businesses have clearly gained market share. Secondly, operating income from our wholly-owned business totaled $775 million for the first nine months of 2011. This represents an increase of 28% year-to-date. Again, we did these with headwinds -- not all clear savings and from a profitability perspective, ACCI, AMM and PDP all saw important improvement in their operating margin with AMM at 21%, PDP at 12.5% and ACCI at 9.7%. So, all in all, we made a very good progress on a year-to-date basis with our wholly-owned business. We think there is more way to be extracted and so we’re making some changes to our product segments internally in order to further sharpen our focus and leverage our resources. We intend to grow and capture value for analog and video. Specific to digital, in order to further enhance R&D effectiveness, reduce end market and better exploit synergies, we’ve decided to combine all efforts in our wholly-owned businesses in the area of multimedia processors in one unit. Therefore, effective January 1, 2012, we will bring together all application processor activities related to non-wireless digital platforms in a new [Tele] group named Multimedia Convergence Platforms. And we have decided to combine all activities concerning imaging and operated in a new group called IAG. The Microfluidics division and the BCD Power Division today in CCI will be moved to AMM. These transfers will create important synergies in the area of MEMS and BCD technologies and we support our goal of ensuring we have the appropriate focus on key parts of our digital business. So, our objectives are clear for analog and mixed-signals, we want to expand our sales opportunities over the mid-term and in digital businesses our goals are both higher sales and improved profitability. Before concluding, just a few brief comments on some of our new products and design wins. We are continuing to build our leadership in sensor and power. During the quarter we introduced our new family of microcontrollers, the world’s fastest microcontroller base on the ARM Cortex-M4 and the low cost Discovery Kit to help customers get started using it. The MEMS we are committed to maintaining and growing our leadership position in consumer and portable applications and in Q3, we launched several new numbers of the iNEMO family of advanced motion-sensing modules, as well as the iNEMO engine sensor fusion suite. We also announced two new gyroscopes including the world’s smallest and another with exceptional noise immunity. Step-by-step we continue to strengthen our position in multimedia convergence. This has been a quarter of breakthrough launches for this pillar of our division. We introduced and demonstrated early the most powerful set-top box Systems-on-Chips in the market because it is able to record four full high definition streams simultaneously or may enable a truly connected home where consumers can seamlessly stream content across their TV sets, tablets and laptops with the highest performance and speed while accessing operators application stores, as well as open market stores. Moreover, we launched our latest generation broadband TV home entertainment platform which recognizes the TV is the center of our connected homes and allows a more personalized and socially interactive viewing experience with amazing 3D graphics and easy-to-use smart navigation. In Automotive, we achieved major design wins for embedded microcontroller from a leading Korean car maker for a chassis-controller application and in car body applications with a major U.S. Tier 1 customer. We also won a major anti-collision system design with a worldwide leader in automotive safety and we were awarded the main processor socket in a multimedia car radio for a leading global automotive supplier. To wrap up, I want to be clear that we anticipate that the fourth quarter in just about 2012 will reflect a weak semiconductor market environment, also ST-Ericsson is currently in a transition from legacy to new products. The company’s innovative product roadmap will position ST-Ericsson for success as an industry leader and will translate our current efforts into a value opportunity in the future. As you saw last week, ST-Ericsson’s third quarter results show progress in that respect. However in the event of a significant worsening of the current market conditions or a lack of result we will consider additional actions to improve performance. At the same time, we have made solid progress in a number of areas so far this year in an environment that is quite mixed. Our financial position is strong and we continue to be the case in the quarters to come. We would be happy to take your question now. Thank you.

First question is from Mr. Stephane Houri of Natixis. Please go ahead sir. Stephane Houri – Natixis: Yeah. Good afternoon. Quick question if I may, yesterday, Texas Instrument said that they were seeing some kind of cyclical but forming especially with the pace of declining orders which are slowing down in August and September. It seems like you don’t exactly see the same thing. Can you confirm that?

Well, of course, it depends whether you talk about bookings or billings. I think during the last two, three weeks we have experienced the same in terms of some form of bookings selection, of course this is relatively good news, but first of all we need to understand whether it is sustainable because there is a reason, as we said this two, three weeks and of course, this will not have necessarily a very short-term impact in terms of billings. So, I think, of course, we will watch and see I think, again last week was better in terms of bookings, so I’m just reporting the most recent -- on the most recent date that we have but we need to understand whether this is sustainable -- this two, three weeks that is going better but we do not know for sure whether this is sustainable. Stephane Houri – Natixis: Right. And can you update us on the capacity utilization rate for Q3, but also what you’re seeing for Q4 and Q1, because you’re guiding for also really below seasonal Q1? Thank you.

Yeah. I think, we have two priorities, let’s say from now to the end of the year. The first is on the business that we control 100% is again gaining share. As I said, the first nine months of -- see how we grew 9.3% that is better than the market we want to continue to do so. So, priority number one in market share and priority number two is – is definitely inventory reduction. So we are focusing on cash and cash flow and of course, there will be degradation of our fab loading and Carlo Ferro will provide the most updated figures.

Yeah. Good morning, good afternoon, everybody. Thanks Carlo. So to open the data point, loading in the third quarter of the fab has been in average at the 83% and as you know, you -- we measure it on the standard line utilization, utilization rate. So this is very much in line with the expectations we shared with you three months ago in entering the quarter. For the fourth quarter we expect it to go down as anticipated and for the reason that Carlo has mentioned in the range between 70% to 75%. Then when talking about the first quarter, at this stage is a little bit earlier that to anticipate an expectation, the visibility we have is that some underloading we continued to the first quarter but again also given the booking situation Carlo was mentioning is a little bit early to offer you a further visibility on this respect and the current visibility we are preparing for the first quarter manufacturing activity below normal. If I can take the opportunity of Carlo having passed that, that wasn’t better to go, on the first part of your question Mr. Stephane, I noted many comments in the reports this morning about our outlook for the fourth quarter other competitors are looking to fourth quarter. And I did a quick math and if you measure the second quarter revenues of as you mentioned [PI, PI] and National are combined and their expectation for the fourth quarter and you measure ST midpoint of expectation compared to $2.57 billion revenues of Q2. This sales decline is very, very similar, is very, very similar. So we believe that at the end what we are currently anticipating for the fourth quarter is not different from other major competitors. Stephane Houri – Natixis: Okay. And if I may the last question, you seem to say that the situation is much different to the – from 2008. Can you give us some color about this comment?

Yeah. We do not expect, I mean, what we are talking here over six months period is a drop of – is a drop of 10 plus percent, right. So, 10% to 15% over six months period, I mean if I go back to 2008 the drop over six months was much more important. Also, I think, we do not see the same panicking at the major accounts. I have to say that during the crisis at the end of 2008 many of our top customers physically closed the doors, they stopped buying anything and this is not the case today. Of course, we are concerned about the macro-economic situation overall but from what we see from the booking trends, from the decline over six months from the more stable behavior of our top customers. We do not see the same pattern. Stephane Houri – Natixis: Okay.

Thanks, Stephane. Stephane Houri – Natixis: Thank you.

Next question, Dino.

Next question is from Mr. Andrew Gardiner of Barclays. Please go ahead, sir. Andrew Gardiner – Barclays: Thanks very much. I was just interested in following on to the utilization question a little bit. You’d mentioned on the second quarter call that you are working to reduce your level of foundry sourcing as well, but that it would take time to do that wasn’t possible on a very short-term basis, but how are you thinking about that now as we look through to fourth quarter and into early next year? And also, distribution sell-through was weaker understandably in the quarter, I’m just wondering how you’re seeing the channel at the moment as well? Thank you.

Okay. Thank you for your question. Didier Lamouche speaking. Yeah, we are starting to repatriate clearly the volume that we have subcontracted outside and mainly with the foundry. We are clearly boosting the effort today. We anticipate roughly to reduce by a factor of two, roughly, compared to the 5 point level of outsourcing, I think Q2, yeah, the level of repatriate of activity outside. We are in the middle of it. We should reach the maximum, I would say somewhere in the fourth quarter. But I want also to mention that this is a very dynamic environment because we are qualifying new products everyday, developing new products everyday, so of course, we cannot ensure maximum flexibility at any point in time, so that’s the reason why it takes time to re-qualify new products, I mean products that are manufactured outside into our own factories. So, this is an ongoing effort in which we have put a lot of focus and that will continue through Q4 and Q1.

Do you have a follow-up Andrew? Andrew Gardiner – Barclays: No. Just in terms of the channel inventory as well, but that was clear on the foundry sourcing? Thanks.

Right. Yeah. In terms of say position at our distributor, so I would say that probably the bottom of the POS was in Q3 the point of base of our distributors and of course, again we would like to see, because we are tracking this at the monthly level at every distributor many of the regions where we operate. And in terms of inventory we had some adjustment, but we will continue to adjust and this is clearly for our own inventory but also for the inventory of our distributors. So, on one hand, I think in terms of POS probably the bottom of Q3, again we’ll have to see and on the other hand the action started in Q3 in terms of adjustment of the inventory at the distributors, but we’ll continue during the course of the last quarter. Andrew Gardiner – Barclays: Thanks very much.

Hope this quarter yeah.

Thank you, Andrew. Dino, next question?

Next question from Mr. Niels de Zwart of ING. Please go ahead, sir. Niels de Zwart – ING: My first question is basically one clarification on what you mentioned about the bookings turnover to past three weeks. Did you mention that bookings improved compared to the weeks thereafter or did the rate of decline improved and then I have short follow-up, please?

No. The booking did improve. Niels de Zwart – ING: Okay.

The booking did improve and it is -- as I said it is basically three weeks two, three weeks, last week was a more significant improvement, but it had really brought them, it was really low and this is factual. Now, we’ll have to understand the sustainability but there is a net increase in the booking rate. Niels de Zwart – ING: Is there – that we could see a book-to-bill again above 1 for Q4 is that where you say now?

I think it is clearly to say, it is clearly the book-to-bill was very, very – we do not provide the book-to-bill information but it was clearly below 1 -- it was clearly below 1 in Q3 and I would say it’s too early to anticipate it is going to be above 1 in Q4. Niels de Zwart – ING: Okay. Thank you. That’s clear. My follow-up would be on your operating expenses, I mean, you’re clearly prepared for a lower level of revenues in Q4 maybe likely in Q1 as well. Are you prepared to take any action on the operating expenses side, in other words what should we take into account to the models for operating expense in the coming quarters?

Yeah. Carlo Ferro is taking the question and if you allow me I would bifurcate about the very short-term in the fourth quarter and 2012. It is better part of the current quarter we’re exiting third quarter that as you know is somehow affected by seasonality as we have a vacation in Europe and indeed I believe we did in the third quarter what we had anticipated that you to do operating expenses in dollar remains substantially flat. They have absorbed about $40 million of increase due to the fact that ST-Ericsson has no longer these R&D services sold to a third-party that reduce expenses by $40 million – it has -- they have absorbed about $10 million negative currency impact. So we have been able to deliver a substantial savings due to the third quarter seasonality for vacation in Europe but also due to some other more structural factors like initial savings from ST-Ericsson on going restructuring and cost control measures in ST. So, overall, we enter the fourth quarter with an expectation on some seasonal increase. Overall, so I should anticipate a moderate quarter-to-quarter increase in operating expense in the fourth quarter. We are preparing for a 2012 taking in account the market scenario, it’s quite early at this stage to state a guidance or whether I believe, I can anticipate that we target some significant reduction in absolute dollar term in respect to the current rate to the level of expense that incurring this current quarter, of course assuming a similar currency rates. Niels de Zwart – ING: Okay. Thank you. That’s clear.

Thank you, Niels. Next question, Dino.

Next question Mr. Gunnar Plagge of Citi. Please go ahead, sir. Gunnar Plagge – Citi: Yeah. Hello. And I was wondering with a couple of comments last week about competitors saying that they are seeing under shipping to the end markets. I don’t, I was wondering to what extent do you see that and particular, I was interested about your outlook for the automotive industry going into Q4?

Automotive. Gunnar, you said under shipping.

Shipping, about whom, we did not understand. Gunnar Plagge – Citi: By a competitor.

By a competitor. Gunnar Plagge – Citi: No. Under shipping end to end markets that the industry is under shipping into end markets.

Did you understand?

Yeah. Gunnar maybe you could rephrase that question, sorry. Gunnar Plagge – Citi: So basically that the semi-industry is at the moment under shipping what end markets really need that we should see a snapback in the semi-industry at some stage?

Listen I -- let’s go through for a moment, I mean, take a -- I mean we have a strong position in distribution worldwide. We are one of the major player in distribution in Europe, of course, but also in Asia and also in the United States. What we have experienced in Q3 is a significant decline of the resale activity our distributors to small and mid-sized customers. And typically these customers they hold their inventory at the distributor premises. So this is a real decline of the underlying demand. If we move to other things, Asia is not great any longer. Taiwan is weak and the consumer business in Taiwan is weak, the display business is weak, of course the PC industry is also weak and during the third quarter even the Power Supply business weakened. The growth of the Automotive market in China is at the different level. It was a tremendous growth and now there was a very, very important to this the deceleration of the growth. Indeed there are areas where the Tablet market is negatively good, the infrastructure market, the communication infrastructure market is good. Now, there is an under shipment. Well, I think is a two thing, so I think there is for sure in inventory correction in the semiconductor business or in this sense somehow is under shipment, because that overall after six, seven quarters of very strong performance, I think is clear and very likely that there is an important inventory correction that we believe that there is also an underlying weaker demand. So I think is a combination of the two things. Gunnar Plagge – Citi: Okay. Thanks.

Thank you.

Thank you, Gunnar. Next question, Dino.

Next question Mr. Jerome Ramel of Exane BNP Paribas. Please go ahead, sir. Jerome Ramel – Exane BNP Paribas: Yeah. Can you hear me?

Yeah. Very well. Jerome Ramel – Exane BNP Paribas: Yeah. Good afternoon.

Good afternoon. Jerome Ramel – Exane BNP Paribas: May be a question for Philippe and I just wanted to know you have an update on where the set-top box market and digital TV market is, what’s your view on the file that Intel is expecting there, so I can understand as on one hand you might be happy to see Intel leaving the business, but on the other hand, I remember that we’re happy to see Intel with high ASP, high margin competitor. So, just like to understand the competitive landscape in digital TV and set-top box going forward? Thank you.

All right. Well, I don’t think I will surprise to tell you the market this year this isn’t the best. Consumer market is quite weak due to general economic conditions. Now this is a global factor, now looking at more precisely inside the market there were two major news recently, Broadcom exiting digital TV and Intel announcing something quite very but anyway some form of exits of some part of their targeted markets which I think is good news for ST. The fact we introduced as Carlo mentioned earlier all the fourth generation platform, I think is very strong indication that we intend to take the high end of that market, which now is very much available to us. So, I think, our product announcements come exactly at the right time to fill the expectation that had been created by other people. So its actually good timing and we are the first to introduce such powerful platform in 32-nanometer and we definitely have created a lot of interest and we have already recorded some very good design wins that we -- of course we will generate some business next year based on this. So, for us the macro-environment is very unfavorable at the moment but the micro-environment is very favorable and we are recording a number of design wins which let us pretty optimistic for the medium-term. I hope I answered your question. Jerome Ramel – Exane BNP Paribas: Yeah, yeah. And may be just a follow-up on capacity utilization rates specifically for Crolles 300 millimeter and would have an idea where you are today?

I don’t think we give Jerome we give information fab-by-fab. Clearly, the utilization is not the best, especially due to the weakness we see with ST-Ericsson and products. But, going forward I’m sure you capture the fact that ST-Ericsson has won a key design win with HTC recently, which is obviously a product which will be manufactured in – is manufactured in Crolles the 300 millimeter. Second point is also, our Imaging product line if you look to our numbers is doing pretty well and this is the key product which is also manufactured over there. And today, without giving you a specific numbers, this is not the factory where we suffer the most, which is for the future good news because obviously this is the future products and product for future business which are manufacture over there. Jerome Ramel – Exane BNP Paribas: Okay. Thank you very much.

Thank you, Jerome. Dino, next question, please.

Next question is from Mr. Tristan Gerra of Robert Baird. Please go ahead, sir. Tristan Gerra – Robert Baird: Hi. Good afternoon. Just looking at the Wireless JV we see some encouraging progress in terms of the design wins including the HTC-1 that that’s been advertiser some time. Could you just reframe perhaps long-term how strategically that Wireless JV is important for ST and whether that strategic important has changed given the changes that Nokia since the beginning or earlier this year?

Yeah. Well, I think for us there are two things that are important, of course, this business is from a strategic point of view is important because it’s part of is one of the two pillar of our vision that is the multimedia convergence and we are focusing on high-end consumer products using VLSI platform. So this is clear and very strategic to us but also and what is very strategic to us is the financial performance. So, it’s clear that we must make sure we get to do. I mean, this -- we cannot dissociate the two things, right. So, I think, we are encouraged by the progress in one of the ecosystem, I mean, of course, HTC now we are mentioning HTC, because it’s the first [result with once] in the shops, which is good. It’s good that is in our NovaThor platform. It is good that it’s prestigious name and it’s not one area, it’s in Asia, so it’s a good example that we can make good products also for innovative and competitive markets. But I think we’ve done good progress in general in the ecosystems on Android and as I said, it’s not only HTC. We have one restructuring plan that is not yet giving any benefits business was basically nothing close to nothing in the third quarter. It is targeting savings for $30 million per quarter or $120 million per year. But again this is not enough. So, we need to do more in terms of covering more customers and today as long as financial performance we look, I mean, a reasonable timeframe. Tristan Gerra – Robert Baird: Very good. Thank you. And just a quick follow-up, how much revenues would you expect from your MEMS business this year?

I think we’ll double compare to last year. This I mean through the end of the third quarter I think I read before we grew 100%, but I think is overall in the year, we will double. And we’re of course, we have new products. I mentioned here this fusion kits, this iNEMO, but we have two new families of product that are not really improving in terms of revenues one is our microphone, digital microphone family. The other one is the pressure sensor that is very important particularly for an Android smart phone. And on top is the e-commerce. So, it is a good business. We are performing well, but there is more to come and of course is important to move on here with all these new families quickly.

Thank you, Tristan. Dino next question.

Next question Mr. Francois Meunier of Morgan Stanley. Please go ahead sir. Francois Meunier – Morgan Stanley: Yeah. Thanks for taking my questions. Yeah. Carlo Ferro you were talking about improving those free cash flow in Q4, does it mean that actually your return for cash flow was seen in Q4 and maybe you can help us with the two important number of I mean CapEx has remained quite high actually in Q3 I thought you would have cut it. So, how much you expect to spend in Q4? What’s your budget? And maybe if you could give us a glimpse into the CapEx budget for next year because I think by present I have got 800 million for next year I don’t know given what you’ve spent this year just there would be sharp drop. And inventory days if my calculations are right it was 98 days in Q3 down from 99 may be you got some slight difference, but that’s roughly ballpark where we are. Do you see inventory days will go down in Q4, I understand the inventories would go down in absolute terms but inventory days, do you expect them to go down and may be if you could tell us how inventory could go down in terms of absolute dollar? Thank you.

Okay, Francois. We’ll take your sole question, right, but this is all around the acceleration of generating free cash flow, so may be I start from this point and then elaborate on the capital expenditure and the inventory. In the second quarter at the end we have incurred negative cash flow and in third quarter we have substantially reduced from minus 250 to minus $136 million. The other important data point on the third quarter as you may have noted from the ST-Ericsson press release the free cash flow ST-Ericsson is publicly disclosed is ST-Ericsson may get use of cash in the quarter has been higher than $136 million which means that the wholly-owned businesses obviously in the third quarter that generated some positive free cash flow. Not yet enough and we have planned on accelerating it. The key point is we have started to reduce capital expenditure in May, June but in term of payment as you see from the press release $384 million of payment in a quarter is still a significant -- was still a significant amount in the third quarter. We are now going really to substantially reduce, we’ve already reduced so far in the fourth quarter, I could anticipate a very minor amount of payment for our capital expenditure. Overall, we believe that we will position the year in a range of $1.250 billion of paid capital expenditure. Their received tools are much lesser as you can expect that is the Q4 2010 has been quite in terms in receiving tools in Q1 ‘11 at very intense in payment of capital expenditure. So in these respect also we are profitable that the overall CapEx situation at the constant exchange rate at current level of exchange rate that should not conflict into a significant change in depreciation from ‘10 -- from ‘11 into ‘12. Indeed, we do expect that the depreciation at the current exchange rate in ‘12 to be very similar to the one that we had this current year. Then for 2012. For 2012, frankly what we know is the first part of 2012 and capital expenditure for first part of 2012 a plan that to be very, very low. Where there at the end from second quarter of course we will modulate based on the need of capacity on the visibility we’re going 2012 before the second half of the year. Finally on the inventory. On inventory we have reduced inventory into Q3, not as we have originally planned, since evidently we did not made to the mid-point in term of revenues while we remain within the guidance. And we continue to plan and to reduce inventory by a more significant amount for the fourth quarter, obviously assuming a constant exchange rate on the inventory valuation. In term of days in terms we plan some acceleration, but at these level of revenues frankly for us the [key point] was on extracting cash by reducing inventories in dollars and this is what we’re currently doing and what we plan to do and what could help to have on the fourth quarter a level of overall cash flow that I cannot grant whether would have a positive or a negative sign overall, it may depends also on ST-Ericsson use of cash but whether it could be a very marginal amount where positive or negative. Francois Meunier – Morgan Stanley: Okay. Thank you. Can you ask another question about automotive in China to Carlo Bozotti, actually you were mentioning a bit of a slow down in the growth rate over there can you may be quantify if you could and also if you could tell us who you are shipping to in the Chinese automotive market is that to local guys, is that to the (inaudible) trend pipe or is to the German manufacturers?

Well I think for us the -- we are really a very important position locally. So we are the first supplier in the automotive business in China. So what we ship into China so we are the biggest -- we are the biggest supplier there. And of course we also have a very important business in certain western companies, particularly with German companies that ship itself high end car to Chinese consumer. The decline that we see in the growth is not a bit, I think is more material now probably Paul is not here Paul Grimme, but if I recall well, the projection for car volume growth the next year in China is in the range of 3% which is well below what it was in the past. So, yeah, it’s still growing but at the pace that it is well below what it used to be. Francois Meunier – Morgan Stanley: Okay.

Maybe we should reconfirm this number with Paul Grimme I said 3% this is what I recall which is a, yeah, which is a significant decline of the phase of the growth. Francois Meunier – Morgan Stanley: And you’ve seen weakness across the board, so both with Chinese manufacturers and Western guys?

Well, in the Western it is not black and white. I think in U.S. it’s relatively okay and I have to say that there are companies in Europe that they are still performing well very well and there are companies in Europe that are performing less well. There are companies in Europe that are still okay and there are other countries but it’s obvious. I mean I would say that Italy and France in this base is weaker Germany is stronger. And in Germany maybe somebody is stronger than others but of course I cannot make the names of the customers. Francois Meunier – Morgan Stanley: Okay. Thank you guys.

Thank you.

Thank you, Francois Francois Meunier – Morgan Stanley: Okay.

Next question.

Next question is from Mr. Bernd Laux of Cheuvreux. Please go ahead sir. Bernd Laux – Cheuvreux: Good afternoon together.

Good afternoon. Bernd Laux – Cheuvreux: Can you hear me?

Yeah.

Yeah, yeah. Bernd Laux – Cheuvreux: Okay. In your introductory presentation you mentioned the reorganization for the Digital Processors and the Imaging. And I wonder if you could shed some additional light in the expected benefits if possible quantified like progress in that respect and the timeline you have in mind in order to make that working. And are there any capacity adjustments attached to it that reshuffle or not. Thank you.

Yeah. The organization is what you see as ACCI is our segments defined as ACCI so is of course touching head CCI and so basically what we have done we’ve put all the application processors for [CAN] navigation TV and set-top box in the same unit. Today, we have the same structure in terms of, of course, for what we do for instance in TV and the set-top box. It was not the case in the past. So we manage to work. And thanks to this convergence of the utilization of the ARM cores for [CAN] navigation processors, TV processors and set-top processors. We are going to centralize this platform effort in one unit and particularly in one R&D unit and this will be what I have called in fact multimedia convergence platform group and this group will be managed by Philippe Lambinet. Then there is a the second part of our visible activity that is the traditional ASIC business for communication infrastructures for the digital color printer, the digital color printers and but its mostly CMOS ASICs, plus the Imaging products and this is a combined in another group and this group will be called Imaging and ASIC Group therefore, IAG. So, the two groups will be part of a segment, we’ll form a new segment basically that is the Digital segment of the company. And starting from the beginning of next year we will report using this methodology. The new organization will be effective at the beginning of next year. There are two axis of value for us, the first of course thanks to the efforts that we have done in the past for discussing the convergence of ARM core we expect a more effective R&D and the reduced time to market but, there is a second vector and of course, is about synergies and we believe we will be able to extract synergies from what we’re doing digital, but also from what we transfer from the existing CCI into analog. In fact, from CCI we are transferring our Microfluidics activity into our MEMS operations. And we are transferring the motor control activities for computer peripherals into our BCD activity that is of course in IMS. So, we will be more focus in digital on one side and there would be more focus on analog on our side. This focus, the intention as we said is to give in terms of effective in the R&D effort but on the other side also to extract more synergies. And the new organization is effective, the 1st of January and I forgot to say that the IAG group will be managed by Gian Luca Bertino. Bernd Laux – Cheuvreux: Thank you.

Thank you.

Thank you, Bernd. Next question please.

The next question is from Mr. Didier Scemama of RBS. Please go ahead sir. Didier Scemama – RBS: Hi, good afternoon. Thanks for taking my question, gentlemen.

Good afternoon. Didier Scemama – RBS: Good afternoon. I’m just wondering as we have to do the first quarter of 2012, I know Carlo you said you are a bit cautious on that and I can understand that, but if I’ve done the math correctly you’re under -- your 2Q, 3Q and taking into account your Q4 guidance you’re about 25 points below normal seasonality. I understand some of that is due to ST-Ericsson and also exiting the HDD SoC market, but don’t you think you’ll slightly if not massively under shipping and consumption. And secondly, relative to some of your peers that have already said that Q1 shipping up to be better than normal seasonality, you think in participating that as well. I think one of your peers said that yeah they have never seen more than two quarters of inventory correction in the disti channel? Thanks.

Yeah. No. Of course, we are not giving guidance today for the first quarter of next year. I think the assumption that we are taking today is as I said we do not believe this just corrective -- correction that you’ve seen inventory. We have some evidence I think he spoke for us and this is for everybody in the world of weaker underlining demand and of course, this is what is concerned. I’m sure that this fiscal year to ST and these other too many other companies is not just an inventory correction, because we see it, the POS of our distributors is for ST, but is also for our competitors is declining and this is not really just an inventory, not an inventory correction. I think that for sure we will go on curing inventory and today the priority is as I said two, two faults one is market share and the other one is the cash and of course is the inventory reduction and today we expect that there would be a further significant reduction of inventory in the course of the fourth quarter, but we anticipate to go on and take all the necessary measure also in the first quarter of next year. So we expect a sub-optimal loading situation in Q1 next year again to make sure that we go back to a very clean position inventory and again priority is cash. I want to come back to market share in the first nine months on top ST-Ericsson we grew 9.3% I believe is higher than their market growth and I also have to say that 20 semiconductor companies made a profit warning in the course of Q3 and we did not I mean we were a little bit more cautious in July. So indeed there is massive inventory collection but there is also something at the level of [underlying]. Didier Scemama – RBS: And then at the same time you are not getting any cost so I’m just wondering why you not mean that you are using many in a weak?

No. We are definitely cutting cost, we are cutting cost today is a little bit among drains and we have not quantified and we will not quantify but this is not immaterial, what we are doing in a certain area of our business we are running restructuring plan in ST-Ericsson that is at the level of $120 million saving per year. We have -- we are ready to take on necessary measures to go back to an R&D level that is congruent and compatible with the level of revenues of course. And we are very aggressive in terms of repatriation and we’re using in all the tools that we have in Europe to reduce cap costs, some of these tools are very competitive I think, what we can do it in France and in Italy in terms of using these such tools for reduction of the activities in the fab are pretty competitive. So we’ll really focus on the cash and we have on the table a number of initiatives to make sure that if the market will not resurrect all the necessary actions will be taken. Didier Scemama – RBS: We know it’s a cyclical market, so it’s going to come back at some point?

Can you say again?

Cyclical. Didier Scemama – RBS: It’s cyclical and it’s going to come back one day?

Yeah. It’s going to come back. But 2009 is closing up and so we need to make sure that we are better prepared to manage these cycles. This year, we gain market share so far in the first nine months for ST-Ericsson. We have two problems. One problem is the market of course the other problem is called Nokia. And we need to be capable to absorb the swings that are now more frequent, is only three years and more rapidly. Didier Scemama – RBS: All right. Thank you so much.

Thank you.

Thank you, Didier. Next question please.

The next question is from Mr. Guenther Hollfelder of Unicredit. Please go ahead sir. Guenther Hollfelder – Unicredit: Hi. Thank you. I had a question about customer specific issues in the past quarter regarding your iPad business and PDP and on the other hand the Imaging business I think where you were impacted by two customers, so I was wondering whether this business will remain on a lower level going forward or whether you would expect at some time a rebound here?

Carmelo speaking, I’m answering you. Actually there we had clearly said in the outlook that the iPad was affected by 1 major customer. But what we didn’t see there are lot of this headwinds that to be materialized the next year and this will be pretty big. So the iPad will be resurrected next year thanks to the larger customer base that we started identifying in designing at since the earlier -- this year. So that’s so far for the iPad. Did you have any other question will certainly be in a...

Or I can cover Imaging, this is Philippe here. On Imaging the impact is still relatively manageable, because we are mostly focused at one of our biggest customer we’re mostly focused at the low end phones and the feature phones which haven’t been so dramatically impacted. So, this year is still a good year for Imaging. And this year also is a very active year into getting designs in other customers to diversify our customer’s base and our application base. So, we have a strategy in place to diversify products and customers. But this year is a fairly good year for Imaging because we cover markets that are not so affected. Guenther Hollfelder – Unicredit: Okay. Thank you.

Thank you, Guenther

Thank you, Guenther. Next question please.

The next question is from Mr. Sandeep Deshpande of JPMorgan. Please go ahead sir. Sandeep Deshpande – JPMorgan: Yeah. Hi. Thanks for letting me on. Just a quick question kind of, I thought you answered I think a reporter question this morning where you said that this was not the right time to sell ST-Ericsson?

Oh! I didn’t say. Sandeep Deshpande – JPMorgan: So is there a right time to sell ST Ericsson?

I’m sorry, I didn’t say that. The question was, are you planning to sell ST-Ericsson. And of course I did not say that this is not the right time to sell ST-Ericsson. I said that what I already described before, I think this is important because of course it’s part of our global strategy. We have these two pillars, we want to be strong two pillars one is about analog power, microcontrollers and MEMS which is very simple for many markets including automotive. And the other one is high-end products for smartphone, tablets and digital consumer this is ST right. So the first is simple and the second is more challenging. Now the second today is more challenging is more challenges because we have a very important R&D effort that in digital consumer is 100% ST and in the area of wireless we share with the Ericsson Group. Now what I said is that this is part of our strategy. We support this strategy but on the other hand we need to see the results and therefore of course we will take all necessary measures to make sure that while supporting the strategy the results will be coming sooner and I think I want to clarify you well so the interpretation is not this is not -- I didn’t say this is not the right time to sell assuming that there will be a good time for sell. So but of course we’ll of course we have to make sure that the results will be coming. Sandeep Deshpande – JPMorgan: Okay. Thanks for the clarification. Secondly, on you’ve highlighted I mean your wholly-owned businesses which have done better but I mean just looking through the operating margin of the wholly-owned businesses in this up cycle. Overall the operating margins have been about 12.5% or so in the entire up cycles starting in January of 2010. I mean which is I mean fairly good but given that now you are already I mean in the where wholly-owned businesses is moving into a loss making territory into the fourth quarter and maybe remaining in that level in the first quarter. I mean what is -- I mean you’ve talked about in the past having 10% margin over the cycle and that has not been achieved in one of the best semiconductor cycles in 10 years. So clearly there is something about the product mix within STMicro probably in the old ACCI business, which are now breaking up into a different bit but which is not meeting the kind of margin structure that you have in the old AMM business which of course has very strong margins.

Thank you maybe Sandeep we’ll expand more on the how we had feel so to the litigations on sometime with you and the understanding on the profitability of this of our business but we do no provide a guidance of operating income on the sort of company we do not provide by segment but frankly and can easily exclude your assumption that the wholly owned business is in a loss making position this current quarters. Sandeep Deshpande – JPMorgan: Okay. Thank you.

Thank you, Sandeep. Next question please.

Next question is from Mr. Janardan Menon of Liberum Capital. Please go ahead sir. Janardan Menon – Liberum Capital: Yeah. Thanks for taking the question. Just going back to ST-Ericsson and your comment in your opening remarks in your press release saying that if the significant listening of market conditions. We will consider additional action to improve performance. I was just wondering what those additional actions might be?

Well, of course, I think it is clearly that there are at least three access and then I’m talking conceptually just a second because there is nothing on the table on today. The plan is to make the turnaround with what we have on the table that is a restructuring plan that is an important restructuring plan. A good presence in Android and of course we want to expand more in terms of customers and systems. But conceptionally there are always three things. This is a -- lets start from something that is very, very simple. For instance this is now ST-Ericsson is basically a separated company and there are certain level of overlaps but if you take our G&A performance for instance is in Q3 this year this was at the level of 4.5% right Carlo our G&A we divest our G&A performance and for ST-Ericsson this is definitely not the level. So this is one angle of course this has a lot of implications because ST-Ericsson today is a separate company but this is one again conceptionally potential thing. And other potential thing of course again conceptionally is the project scope. Today the project scope of ST-Ericsson is pretty broad and of course we’re very fine to support this project scope with a vision that we are today but as we say these the condition we change we will take action. In other angle is potential -- other potential corporation with other partners. So, you see there are -- again it’s not in the table but conceptually a number of vectors that we can focus on in case we believe is the time to make additional actions. Janardan Menon – Liberum Capital: Okay. Thank you very clear.

Thank you. Janardan Menon – Liberum Capital: Just a followup on your weakest segment sequentially in the Q3 was automotive, which is to some extent in contrast with many of your peers both in Europe and the U.S. who have been seeing somewhat more stability in the Automotive segment compared to industrial, distribution et cetera. I was just wondering whether you have any ideas on why you think some more weakness is that customer base and or is it more that the entertainment areas where you are exposed to is more volatile than some of the core safety boundary kind of areas in the car. And do you have any -- can you give any ideas on any insight into how the Automotive segment will be into your Q4?

Yeah. Well, I think frankly looking at our performance in the automotive since you know the end of 2009 crisis we have definitely gained market share and this year, we’ll grow faster in the market. In Q2 we had a fantastic quarter and we had a fantastic quarter because that was also an important business coming from Japan that -- coming from the Japanese disaster reflect as a consequence. And of course then we saw the discontinuity in Q3. I have also to say that our base is more in Europe so seasonally Q3 is weaker. But I think it’s very, very specific to certain customers and really not related to our performance in the automotive. And if we move on I would leave to Carlo what is the visibility in the next few quarters, but I think short-term there is a degree of stability, right Carlo and then starting to grow again from the beginning of next year.

Yeah, Carlo. At the end we need also to consider that the ST business in automotive very much were graphically distributed, the way they are ahead. So it’s a significant business in Europe and normally the activity in the third quarter for the automotive business is lower than it is seasonally lower. So we have experienced in the third quarter also this ingredient. Going forward frankly, we expect that at the end of the fourth quarter automotive to move on as the overall situation of the industries in the fourth quarter or where that we have anticipated in entering the year that we were expecting the automotive business to grow in the range of 20% on a year-over-year basis from 2010 into 2011. Maybe it will not exactly be 20%, but will be very, very close to 20%, so a significant year-over-year growth for 2011 over 2010. Janardan Menon – Liberum Capital: Okay. Thank you very much.

Thank you, Janardan. I think we have time for one more question.

The final question is from Mr. Gareth Jenkins of UBS. Please go ahead. Gareth Jenkins – UBS: Yeah. Thanks. I guess just a couple if I could. Firstly, just on the micro controller market I want to whether you can say where the, you’ve lost market share though whether I say market dynamic that is weakening and likewise in the industrial space when whether you could just give a sense of how the industrial markets are moving for you into Q4 and Q1. And then secondly I just wonder whether you can call out any kind of one-off related under saturation charges both in Q3 and into Q4 whether you’ll see any inventory write-downs et cetera? Thank you.

For market share on micro controllers, now we are getting this will be market share with time especially in these 32-bit area which is were major effort has been put on the AMR based devices. This is for the digital production same as, I already said for MEMS in the R&D portion, so…

Well, we do not have I mean we saw a real, real raid for several quarters very strong growth and I think this is a market adjustment is a global adjustment but we are absolutely doing we are gaining share in the area of micro controllers is a good business seasonality business you have seen that get introduced the new family empire few days ago I mean couple of weeks ago in fact it is higher performance 32-bit ARM core. So I think is a significant adjustment of the market after the impressive growth for several quarters. There was another question on here on last year right.

The second question I guess was about the effect of the newest capacity to the gross margin right. Janardan Menon – Liberum Capital: Yeah.

Yeah. For the third quarter the impact is in the range of 1.5 to 2 points, obviously negative to the gross margin dynamic. On the fourth quarter, we expect to raise in a range of 4.5 points. So is quite significant there we have about 2.8 to 3 points of higher impact in the first quarter and it’s better to the third and these very much justify the guidance for the first quarter gross margin. Janardan Menon – Liberum Capital: I’m sorry, could you just suggest how long that will move in Q1 please?

Well, on Q1, I repeat what we said earlier, is a little bit early to have a full visibility on the current manufacturing plan. We expect that fab not too below the optimal level and some unused capacity to continue through the quarter. How large it could be frankly, it’s -- we need a few or a more months of booking, building and demand to be more accurate on this point. These are the current level of visibility what we anticipate is that some charges for our newest capacity will continue through 2011 and 2012 as well. Janardan Menon – Liberum Capital: I think I’ll just confirm that you see no inventory write-down at all for Q4?

See that as a usual in these phases of our market demand and booking declined in the third quarter the overall impact of the inventory went down and it went for a rate we server where it has been a little bit heavier than what it normally is and this is at the end what we have -- you have to understand obviously absorb all what is needed under current circumstance. Janardan Menon – Liberum Capital: Thank you.

Thank you.

Thank you, Gareth, we will take one more question.

Last question for the day is for Mr Johannes Schaller of Deutsche Bank. Please go ahead. Johannes Schaller – Deutsche Bank: Yeah. Thank you for taking my question. Just really one on the HDD SoC exit that you’re basically doing, could you remind us what roughly I know your revenue run rate this year is at roughly I think $400 million is that the right number to think about? And then maybe you give kind of some color about the timeframe you think or you plan to ramp that down from here?

Yeah.

Yeah. So I think the first question is on the run rate of the billing and Carlo will provide and I think Philippe can you comment on the early…

That’s hard disk drive?

Hard disk drive.

HDD.

No. I think, sorry we understood HED you know I think we -- as we had largely anticipated I mean anticipated I mean we are out from the SoCs so the contribution is basically zero. And we have an important business in the area of motor control that and we do not provide the secrecy because they are really very specific to very few customers and to other client. And this is the part of the business that we are now emerging with the rest of BCD and IMS, right. So, but it is absolutely not a new thing that we are exiting -- we have exited now because in Q3 the revenues were already basically zero that the system on a chip, system on a chip market, the digital core of the disk drive so this is now the past for us. Johannes Schaller – Deutsche Bank: Yeah.

So it’s done, it’s finished. Johannes Schaller – Deutsche Bank: Okay. Thank you very clear.

Thank you, Johannes. I think at this point we’ll go ahead and close the call, Carlo any final comments.

No. Its fine, I think....

Okay. We’ll go ahead and close the call. Thank you everyone for participating and thank you, Dino.

Ladies and gentlemen, the conference is now concluded. And you may disconnect your telephones. Thank you for joining. And have a pleasant day. Good bye.