Jennifer Jarman – IR, The Blueshirt Group Francis Lee – President and CEO Russ Knittel – Executive VP, CFO, Secretary and Treasurer

Heidi Poon – Thomas Weisel Partners Vijay Rakesh – ThinkPanmure Jeff Schreiner – Capstone Investments Rob Stone – Cowen & Company Yair Reiner – Oppenheimer

Ladies and gentlemen, thank you for standing by and welcome to the Synaptics 2009 first quarter earnings conference call. During today's presentation, all lines will be in a listen-only mode. Following the presentation, the conference will be open for questions. (Operator instructions) This conference is being recorded today, Thursday, October 23, 2008. I would now like to turn the conference over to Ms. Jennifer Jarman of The Blueshirt Group. Please go ahead, ma'am.

Good afternoon and thank you for joining us today on Synaptics first quarter 2009 conference call. This call is also being broadcast live over the web and can be accessed from the Investor Relations section of the company's website at www.synaptics.com. With me on today's call are Francis Lee, Chairman and Chief Executive Officer Synaptics, and Russ Knittel, Chief Financial Officer. We would like to remind you that during the course of this conference call, Synaptics will make forward-looking statements, including predictions and estimates that involve a number of risks and uncertainties. Actual results may differ materially from any future performance suggested in the company's forward-looking statements. We refer you to the company's SEC filings, including Form 10-K for the fiscal year ended June 30, 2008, for important risk factors that could cause actual results to differ materially from those contained in any forward-looking statement. We expressly disclaim any obligation to update this forward-looking information. And now I'd like to turn the call over to Francis Lee. Francis?

Thanks, Jennifer. And thanks, everyone, for joining us on the call today. We are extremely pleased with our first quarter performance, especially given the uncertainty in today’s macroeconomic climate. Revenue of $115.9 million grew a strong 34% year-over-year, representing an all time record for Synaptics. Non-GAAP net income of $17.9 million was also a record, resulting in record non-GAAP earnings per diluted share of $0.50, a 39% increase year-over-year. Clearly, Synaptics continues its history of solid execution in capitalizing on the macro trends, supporting a digitalized style, as touch technology becomes more and more pervasive across a wide variety of products. Compared to the same period last year, revenue from PC and non-PC applications grew up possibly 19% and 97% respectively, highlighted by solid demand from notebook and PC peripherals and an almost three-fold increase in mobile phone revenue. We continue to see a strong adoption of our ClearTouch solutions, particularly at the market's appetite for touch-screen phones continues to gain momentum. Synaptics is engaged with all of the top five mobile OEMs among others, and I’m pleased to mention that we are providing full capacity based touch-screen solutions for two new high profile phones, both in early stages of launch. As you are aware, we executed a three-for-two stock split during the September quarter. This was our first stock split since going public in 2002, and we believe this action is a further testament to our confidence in Synaptics' future and our ongoing commitment enhancing shareholder value over the long term. I will now turn the call over to Russ for a detailed discussion regarding our first quarter results.

Thanks, Francis. In addition to our GAAP results, I will also provide supplementary results on a non-GAAP basis, which excludes non-cash share-based compensation charges and for the comparable period last year certain non-recurring non-cash charges. Please refer to our press release for the first quarter of fiscal 2009 for a detailed reconciliation of GAAP and non-GAAP results. Record revenue for our first fiscal quarter of $115.9 million was up 20% sequentially and 30% over the comparable period last year and exceed our guidance range, as notebook demand was stronger than we anticipated. Our revenue mix from PC and non-PC applications was approximately 72% and 28% respectively. Sequentially, as expected, we did see a decline in revenue from mobile phone applications compared with the extremely strong levels we experienced in the June quarter. On a year-over-year basis, our PC-based revenue increased by more than $13 million, representing approximately 45% of our total revenue growth. This growth reflects strong demand for notebook computers, including increased revenue from our multimedia control solutions and higher revenue from our PC peripheral applications. The attach rate in notebooks for multimedia controls in the first quarter was approximately 19% compared to 17% in the year-ago period, and as expected, down sequentially. As we mentioned on our last call, we have been the market leader for multimedia control applications in notebooks, but as other competitors have entered the market, customers are looking to add additional sources of supply. As a result, we expect this metric may continue to trend down. During the first quarter, revenue from our non-PC applications grew $15.9 million year-over-year, representing approximately 55% of total revenue growth. This growth was driven by a nearly three times increase in mobile phone revenue, which represented approximately 18% of total revenue for the quarter, while revenue from MP3 applications was essentially flat compared to the same period last year, but up more than 13 times sequentially, representing approximately 10% of total revenue for the quarter. Our non-GAAP gross margin was 40.6% compared with 40.2% in the June quarter. This was slightly above expectations and was primarily a function of overall product mix. The headcount at the end of September was 435 compared to 420 at the end of the June quarter. The headcount increase of 15 was less than forecasted, and based on current open positions and our recruiting efforts, we expect to add more than that number in the December quarter as we continue to scale the company to meet the opportunities ahead. As a result of (inaudible) the hiring, operating expenses for the first fiscal quarter increased less than expected totaling $30.4 million compared to $28.2 million in the preceding quarter, which included non-cash share-based compensation charges of $5.5 million and $4.7 million respectively. Other major contributors to the increased spending included compensation cost related to our headcount additions, product development related cost, and IT infrastructure cost. Net interest income was $809,000 compared with $902,000 in the prior quarter, primarily reflecting lower average invested balances resulting from our share repurchase activity in the prior quarter. As we noted on our last call, we continue to monitor and evaluate our investments and auction rate securities on a quarterly basis. None of our failed auction rate securities have defaulted, and all of them are paying interest at the contractual rates. Based on our latest fair value analysis at the end of the quarter, we accounted for a net non-cash temporary impairment on our auction rate securities of $980,000 through our other comprehensive income in the equity section of our balance sheet. During the quarter, we received partial redemptions of $1.6 million and anticipate additional redemptions during the remainder of the fiscal year. As of the end of the quarter, the par value of our investments and auction rate securities was $45.7 million and the carrying value was $35.3 million, all classified as long-term assets on our balance sheet. Our GAAP and non-GAAP tax rates for the quarter were 18% and 22% respectively. Next quarter we anticipate our non-GAAP tax rate will range from 19% to 21%, reflecting the favorable impact of the extension of the research credit signed into law this month. For the second half of fiscal 2009, we currently anticipate our non-GAAP tax rate will be in the range of 20% to 23%. Net income for the September quarter was $14 million or $0.39 per diluted share compared with $11.3 million or $0.27 per diluted share in the comparable quarter last year. Our non-GAAP net income in the September quarter was $17.9 million or $0.50 per diluted share compared with $14.8 million or $0.36 per diluted share in the comparable quarter last year. Now a few comments on our balance sheet. We ended the first fiscal quarter with total cash and short-term investments of $152.5 million compared with $146.5 million at the end of the June quarter. Cash flow from operations was approximately $2.6 million for the quarter. Capital expenditures were $2.9 million in the quarter, primarily for IT infrastructure related items and test equipment. Capital depreciation was $1.2 million for the quarter. Receivables at the end of September were $86.6 million compared with $69.4 million at the end of June, primarily reflecting the impact of the sequentially higher revenue level. DSOs at the end of the quarter increased to 67 days compared with 64 at the end of the prior quarter, reflecting a larger portion of shipments occurring later in the quarter. Inventories at the end of September were $25.1 million compared with $21.1 million at the end of June. Inventory turns this quarter remained unchanged from the last quarter at 11 times. Now I’d like to make a few comments regarding our business outlook. We entered the December quarter with a record backlog of $103 million, more than two times our backlog entering the prior quarter. However, we have seen some shifts recently in order patterns that would suggest some cautiousness on the part of our OEM customers. So, based on our current backlog level and the visibility related to anticipated new orders, we believe revenue for our second fiscal quarter will be in the range of $135 million to $145 million, a 37% to 47% increase over the comparable period last year. While we anticipate growth from PC applications, we expect the major growth driver to be mobile phone applications. We understand that this is a broader range than we typically provide, but feel it's prudent given the concerns regarding the macroeconomic environment. Based on anticipated product mix for the second quarter, we expect our non-GAAP gross margins to be around 41%. We expect our operating expenses to continue to increase primarily reflecting the impact of our planned headcount growth and our pipeline design opportunities. For the December quarter, we expect the impact of FAS 123R on our operating margins to be approximately $5.7 million compared with $5.9 million in the September quarter. Our non-GAAP net income per diluted share for the December quarter is expected to be in the range of $0.65 to $0.75, representing an increase of 62% to 87% to the same period last year. Concerning our first quarter results and our outlook for the December quarter, we are well on track to achieve our third consecutive year of record revenue. So based on our outlook for the first half of fiscal 2009 and current visibility looking into the next calendar year, taking into consideration the prevalent general concerns regarding the global economy, we currently anticipate that our revenue growth in fiscal 2009 will be in the range of 25% to 35%, up from our original estimate of 20% to 30%. I’ll now turn the call back over to Francis.

Thanks, Russ. Our record quarterly results provide further evidence that our strategy of selectively investing in verticals that offer strong ROI is working, while also moving us to a quicker diversification within our business. Turning our discussion of recent product developments within our various markets, last quarter we mentioned the continued momentum for our ClearTouch technologies, including the design wins on the Samsung Togo and Sharp NTT DoCoMo mobile phones. We also introduced proximity sensing as a feature, which is shipping in two Dell monitors. Design activities continue at a very healthy pace across our target markets. And now I’d like to make a few comments about specific progress we have made over the past few months. Recently at CTEK [ph] Japan we announced expansion of our advanced gesture portfolio with the variability of our Two-Finger Flick and ChiralRotate gesture for Touchpad. Depending on the applications, Two-Finger Flick enables users to use two fingers to either flick horizontally, to navigate back and forth to images, documents and objects, or to flick vertically to minimize and maximize the applications. ChiralRotate lets user move one finger in a circular motion to rotate images and graphics quickly and easily. This is an addition to existing advanced features, which include ChiralMotion’s growing momentum and Pinch and are incorporated in our TouchPad solution for HP VooDoo Envy 133 notebook computer, which launched last month. The same gestures also shipping in the Fujitsu LifeBook series, which includes the T1010 that also features Synaptics’ LightTouch scrolling solution, both currently shipping in the US and Japan. Our portfolio of gestures is compatible with hundreds of Microsoft Windows applications and offers tremendous value and productivity to any notebook or peripheral keyboard that integrates Synaptics industry-wide leading TouchPad interfaces. As a reminder, mobile phone and handheld device manufacturers can also benefit by integrating enhanced gestures in their designs using Synaptics solutions. Our ClearPad touch interfaces incorporate our enhanced gesture recognition technology, giving customers the option to enable single-finger gestures such as tap, double-tap, momentum, press and flick, as well as multi-finger gestures such as Pinch and Two-Finger Flick. I’m also pleased to announce that the new Toshiba Qosmio G50 notebook computer incorporates two Synaptics solutions. In addition to a TouchPad, the G50 also features our LightTouch buttons that control the multimedia functionality. This product is currently shipping in the US and is another example of our Synaptics technology can improve usability and industrial design. The newly announced Sony Vaio Type C notebook computer shipping in Japan also features three Synaptics solutions; a TouchPad, LightTouch button, and scrolling for multimedia functionality and an innovative new implementation for proximity sensing in a capacitive sensing. Specifically, it allows the users to move their hand back and forth on the top of the computer to change the colors of an illuminated bar underneath the laptop. Synaptics is also beginning to see traction of our solution in mini-notebooks or netbooks. These products are smaller than your typical notebook, with screen sizes of seven to ten inches. Our TouchPad design wins in this area include the Dell Inspiron 9, the HP Mini-Note 2133, and Acer Aspire One, all of which occur in the shipping. We are also excited to announce our first design win in two digital flat screen televisions for a top-tier OEM. The models will begin shipping in November and features are LightTouch control buttons that allow the user to power on and off, change the channel, and adjust the volume. This is another example of how our technology has brought the leverage bar across different vertical markets and further demonstrates how our solutions enable essential functionality without sacrificing sleek industrial design. In the mobile phone market, our solutions are becoming more and more entrenched within the capacity-based touch-screen phones. Finger-based input on touch-screens by handheld devices is intuitive and easy to use with adaptable UIs that allow the user to access only those functions needed within a specific application. Synaptics ClearTouch solutions have been designed into two new touch-screen phones currently being launched in the market. Due to confidentiality obligations, I am only at liberty to share details on one of these design wins today. The T-Mobile HTC G1 phone, the first phones shipping with Google's Android platform. As you know, we are one of the founding members of the Open Handset Alliance, an initiative that’s strongly committed to break open this in the mobile industry. The G1 touch-screen utilizes our ClearPad Touch interface, which allows users to flick through different applications and easily view content. Every report in the press regarding (inaudible) suggest that G1 phone is being well received. In addition, we’re firmly establishing ourselves as a leading player in a rapidly expanding market for capacity-based smartphone solutions. This quarter’s product highlights illustrate a number of key factors. On a PC side, OEMs are realizing the value of implementing multiple solutions from Synaptics. In addition, our ability to innovate coupled with the adaptable nature of our technology enables Synaptics solutions to be easily carried over into alternative phone factors like netbooks as was entirely new product categories such as television. Finally, ongoing enhancements such as our expanding gesture library further emphasized the broad range of features we offer OEMs, providing them with the flexibility to optimize functionality without compromising industrial design. I would now like to update you on our litigation with Elantech. We have an agreement to settle, and the parties have filed to stay the action while the deal is finalized. Their agreement (inaudible) the broad cross license of certain patents in all fields of use. And we do not expect the settlement to have a material impact on our business. Our financial results demonstrate Synaptics is extremely well positioned to compete in markets around the world based on our leadership as an innovator, an infrastructure that is designed to drive effective cost structures and a global presence. We are pleased to put this matter behind us and believe it will enhance our ability to compete effectively across multiple markets, including the notebook market and new ways to address the growing interest in multi-finger gesture as a way to enhance the user experience. Now I’d like to make a few comments regarding general business environment. While we’re closing monitoring the widespread macroeconomic concerns and have tried to encapsulate the prevailing uncertainty in our guidance. Mid-term [ph] indicators, including our record backlog, provide us with confidence in our business as we head into the typically strongest quarter of the year. We are anticipating growth in (inaudible) business and believe that our new application to mobile phones would be less reflective of macro trends and more a function of our penetration and option rates within the mobile phone market. While we believe the continued diversification of our business would help us weather the potential economic downturn, we are not immune to market fluctuations, and we'll be carefully watching consumer spending and sell-through data over the holiday season to gauge and demand and potential impact on near-term business levels. In these uncertain times, it’s important to emphasize the Synaptics fundamentals, including our balance sheet, are extremely healthy. Fiscal 2009 is off to a very strong start. Another indicator, our growth strategies are working and we remain cautiously optimistic as we continue to anticipate another year of record revenue. That concludes our formal remarks, and we’ll now turn the call over to the operator to start the Q&A session.

Thank you. (Operator instructions) Our first question comes from the line of Heidi Poon with Thomas Weisel Partners. Please go ahead. Heidi Poon – Thomas Weisel Partners: Thanks. Congratulations on a great quarter, guys.

Thanks, Heidi. Heidi Poon – Thomas Weisel Partners: Can I just get a little bit more details on agreement with Elantech? It seems like Elantech sort of jumped the gun and made some press release and talked to the press in Taiwan. So I think they are sort of hinting at extended market share in the notebook business. But you just indicated that you don’t expect a material impact on your business. Could you give us a little bit more color on that?

Sure, Heidi. Like I said in the prepared statement here, we don’t expect the settlement to have a material impact on our business. And we believe that because Synaptics frankly is well positioned to compete in markets around the world based on our leadership as innovator, that infrastructure. And then also there is our very effective cost structures and our global presence. But we are very pleased to put this matter behind us and so that we can return focus to our business. And, furthermore I think it will enhance our ability to compete effectively across multiple markets, including notebook market, a new way to address the gesturing as a way to enhance the user experience. And there’s any comfort, Heidi, I'll tell you, mobile phone is a very good example of Synaptics’ ability to compete effectively. So, Heidi, why I cannot comment on what they have said, and they are not set – you know, I am very pleased this matter is behind us and we feel that has got very little material impact on our business, and we feel very comfortable that will enhance our ability to compete because of the track record that was demonstrated as well as the infrastructure that we have put in place. Heidi Poon – Thomas Weisel Partners: Great. Since the original lawsuit with Elantech was about multi-touch, what does it do for the multi-touch design activity going forward?

Well, I mean, the elements of this patent here is, there is a broad cross-license in all fields of use in certain patents. Like I said, I think it will enhance our ability to compete in that space. Heidi Poon – Thomas Weisel Partners: Great. Secondly, could you give us an update on your ASP range, the guidance for December, 41% is above a lot of expectation, but it seems like there has been a lot of rumors around about your cell phone margin range. Could you give us some update about that?

As you indicated, our revenue for the December quarter, the major growth driver is going to be cell phone applications. And a lot of that is coming from these ClearTouch applications that are being integrated into the total touch-screen phones or smartphone category. Those are relatively new to the market. They don’t have this much volume today. And because of that, they can have higher pricing because nobody has got a chance yet to work on economies of scale or efficiencies within the supply chain because it’s relatively new. Heidi Poon – Thomas Weisel Partners: So, do you have a sense of your long-term target for gross margin? You’re sticking with the 40% to 45%, given there is a growing mix of mobile phones?

We haven’t changed our long-term target model for gross margins. And it does remain to be 40% to 45% at the corporate level on a blended basis. As we’ve indicated in the past, we really don’t see a unique gross margin profile when we look at one vertical market versus another because the gross margins really are design dependent and that’s relatively independent of the end market that the design will ship into. Heidi Poon – Thomas Weisel Partners: Great. Finally, can you comment on the design (inaudible) on the OneTouch solution, your chip solution versus module?

Okay. OneTouch continues to do what we wanted it to do for us in the marketplace. It gives our customers an opportunity to engage with us in two different paths. We continue to see growth in the OneTouch applications, but the rest of the business is doing well. And so today, OneTouch as an element of our business is still less than 5%. Heidi Poon – Thomas Weisel Partners: Great. Thank you very much.

Thank you, Heidi.

Thank you. Our next question comes from the line of Vijay Rakesh with ThinkPanmure. Please go ahead. Vijay Rakesh – ThinkPanmure: Yes, I guess good quarter and guidance. Just going back to – it looks like good margin guidance here too. But looking at the margins on the – can you give us some color on the margins for the handset, the notebook, and the netbook side?

Again, the margins are really independent of the vertical market that we serve. And it’s really (inaudible) it's just the net cumulative impact of the designs themselves, and each design is unique and has its own gross margin profile. Vijay Rakesh – ThinkPanmure: And as the netbooks – I know you have said it's below silicon, but are the margins kind of in line with the corporate or the netbook side too?

Again, our targeted margins on a blended basis remain to be 40% to 45%. And within a particular application, there isn’t a unique margin profile. Vijay Rakesh – ThinkPanmure: Got it. And on the backlog, again very strong backlog at $103 million. How does it break out between notebooks and handsets?

Both were fairly well represented in the backlog going into the quarter. Vijay Rakesh – ThinkPanmure: Okay. And on the – it looks here, if you look at the guidance for the December quarter, it looks like a pretty strong start. But it looks like on the back – for the second half, you are kind of being – looks like not much change to the overall guidance -- or it doesn’t look like the Street estimates would change a whole lot. But why is – are you being conservative in the second half of fiscal ’09, or is it just macro, or are you seeing something else? Are you seeing the Apple iPhone being competitive? Can you give us some color, but it looks like you have a pretty strong start for September and December? So –

Well, our outlook for the first half is very strong, and that’s what allowed us to drive our guide up our revenue range for the full year. So we feel very good about that. And you’re right. It does – the range we’re giving for the full year is fairly broad at this point. And I think that that’s prudent, given the concerns that everybody has about the macro environment and visibility there for everybody I think is impacted by that ongoing view that there is some softness developing. But I don’t think anybody has a full appreciation for that yet, and we’ve tried to contemplate that and capsulate it into the guidance we’ve provided. Vijay Rakesh – ThinkPanmure: Got it. Great. Thanks a lot. Good job guys.

Thank you, Vijay.

Thank you. Our next question comes from the line of Jeff Schreiner with Capstone Investments. Please go ahead. Jeff Schreiner – Capstone Investments: Hi, good afternoon, gentlemen. Great quarter.

Thanks, Jeff. Jeff Schreiner – Capstone Investments: Wanted to ask -- -- kind of stay with the last question there, Russ. Given the large guidance range, it is kind of a unique thing the company is doing to date, not something historically that's been done before. Could you really give us the drivers that get you to the high end as opposed to maybe what drives you to the low end? From what you’ve been saying, it seems like it’s purely economical or macro. Are there other drivers involved in the guidance that you’re giving?

No, we think it will primarily be in-demand driven. So we see the opportunity obviously to end up somewhere within that range with a reasonable degree of confidence. But it’s going to be consumers showing up at the stores and buying products that will make the difference. Jeff Schreiner – Capstone Investments: Okay. Were there any changes to 10% customers in the quarter, Russ?

No. Jeff Schreiner – Capstone Investments: No. And coming kind of back, I think couple of people have touched on it a little bit. The corporate margin is 40% to 45%, and then I know that it’s the corporate margin that you’re focusing on, but has there been degradation in maybe legacy products as the newer products are ramping up with higher margins and offsetting that degradation, or are we just – again we are all getting too concerned with a number that’s a blend of so many moving parts?

I’d say it’s the latter. At times when we introduce new products to the market, they start out with lower margins and then we cost produce as we go into production ramp over the life of the product, and sometimes it’s the other way around where we start with relatively higher margins, and they decline over time based on the price concessions you give to the OEM during the manufacturing life of the design. So there are a lot of moving parts here. And I think it is – there are just is too many moving parts here to focus on. And it’s just a reflection of the overall blended design mix that we’re shipping at any point in time. Jeff Schreiner – Capstone Investments: And one final question, and I appreciate the time, gentlemen. For you, Francis, how is the market now? It’s starting to expand obviously with touch-screen and the iPhone effect and what we're seeing in handsets. And we’re starting to see it even maybe move into notebooks in calendar year ’09. Are we still at a point in the cycle where functionality or technology is the real driver for your end customers as opposed to price? And then when do you see that possibly beginning to shift?

Jeff, I’m a firm believer that people buy devices because of applications and not because of technologies. Okay? So, to the extent that you and I will spend money, we buy any number of those gadgets because there is a reason for it beyond the early adopters of the crowd. Okay? So, to me, what I’d like to see here is functionality because technologies make it easier to have on the gadgets now. And a good example of that is how MP3 music player continued to morph into PMP devices. Okay? PND devices are probably more prevalent. And I believe GPS functions one day would be just like images in every cell phone. So I would like, Jeff, to look at those applications that would trigger individuals to put down whatever money of cost at the end of the day, when the consumer product is a large market, the ASP and the cost will also drive the adoption rate. But I would say, first and foremost, you've got to have compelling applications followed by a (inaudible) cost that’s going to see a wide adoption of it. Now having said that – right, okay? – when you look around it, technologies and the related cost reduction is indeed making it easier to adopt as well as making it cost-effective to do that now. The other thing that I would say besides applications is industrial design. So after you put the application down there, there is such a thing as a coolness of the device. Okay? And a lot of our technologies, like for example, proximity sensing, it’s really kind of make it somewhat of a wild factor. When you start triggering some illumination, going up high and low as you approach, that would be another factor. That will help our OEM partners to differentiate our products. So I’m actually very excited that our technology continues to be proven in the marketplace in all of those areas. And therefore, when Russ and I forecast outlook for the year, in spite of the softness and concerns in the macroeconomic environment, I still continue to convince that the prospect for our capacitive touch solution and together with the experienced infrastructure that we’re building ourselves is going to bode well for our future. Jeff Schreiner – Capstone Investments: All right. Thank you very much, gentlemen.

Thank you.

Thank you. (Operator instructions) Our next question comes from the line of Rob Stone with Cowen & Company. Please go ahead. Rob Stone – Cowen & Company: Hi, guys.

Hi, Rob. Rob Stone – Cowen & Company: Congrats on all the good news. These days we certainly can use it.

Thank you. Rob Stone – Cowen & Company: I wonder, as you think about the outlook for the full year, I know you guys don’t give guidance on a per segment basis. But as you're thinking about your PC notebook or the segment that you report as PCs, which includes more than just notebooks, if you could comment on the various growth drivers or assumptions that are behind that? For instance, what are you thinking about for notebook unit growth going into calendar 2009? And is your forecast driven by that, or do you see increasing content because of the examples you gave on multiple solutions per notebook, or how much are peripherals and other non-notebook devices contributing to that segment?

Well, as Francis said in his prepared remarks, I think to some extent today, we are a bit isolated – or insulated from the broader macro environment because of the early adoption and penetration rates within the newer category smartphones. So in that market, we’re less dependent on what’s going on with organic unit growth as we are – design wins that are ramping and shipping in the market that weren't in the market last year. So that’s a net tailwind for us, if you will. When we put together the outlook for the total fiscal year looking at the PC segment, we did bake into that the low seasonal expectations as we go from calendar year ’08 into calendar year ’09. So I think we've baked in a reasonable amount of prudence and are not being overly bullish in the PC segment. We expect that there will be some impact there. But we do benefit from the additional touch points, and Francis gave some examples of that on the call. In addition, we are seeing some traction in the PC peripheral space, which again represents incremental revenue growth for us year-over-year. So, overall, I mean those are the things that we’ve considered in providing that outlook, and we believe it reflects a reasonable range that we’ll be able to achieve, given the very strong start to this fiscal year that we’ve had. Rob Stone – Cowen & Company: Yes. I actually wasn't questioning the validity of your assumptions on the total revenue. There have been some reports out there suggesting that the penetration of touch screens could triple on handsets. So I absolutely agree with you that it’s a penetration-led story there. What I was trying to get to if you are willing to give such an answer is, what you’re thinking about for notebook market unit growth in the next year or so as one of the underlying assumptions?

We have assumed below seasonal growth. Rob Stone – Cowen & Company: I understand that in terms of December and probably a downtick in March. But if we were looking at sort of rolling a year-on-year number, are you willing to say what you are thinking about for annual year-over-year unit growth in the PC notebook segment?

Not specifically other than we are expecting it to be below what the original expectations were for the total year. Rob Stone – Cowen & Company: Okay. Fair point. In terms of the mobile phone segment, you mentioned being engaged with all the majors. We know there are a couple of important designs shipping this quarter. Any comment relative to – do you still see significant opportunities in terms of launching with people who haven’t launched, coming, for instance, after the holidays?

Well, as we said, going into this fiscal year, our expectations are based on the engagements we have with the OEMs that across the year we will see, we believe, continuing new design wins that will be ramping, and they will be ramping with multiple OEMs. So we continue to feel very good about the opportunities that that segment represents for us. Rob Stone – Cowen & Company: This might actually sound like humorous question for Francis, since we talked about mobile phones every quarter since the IPO. But in terms of the state of the market now, about how long is the engagement typically ahead of launching as a significant new design? I don’t mean a one touch, off-the-shelf purchase, but when you're doing these custom designs, how far in advance do you guys know about a design like that is coming?

Well, Rob, as I mentioned – my, it’s right. Okay. It really depends on the functionality of the cell phone. Some of them more revolutionary and some of them are more evolutionary in nature. But I think you get -- the general color here is the life cycle is going to be shorter and the design cycle is going to be shorter. It’s probably going to be within six to 12 months if you ask me to use a rough ballpark figure. Rob Stone – Cowen & Company: Okay. Final question on the flat screen TVs that you mentioned, which geographic markets are those shipping in?

Obviously, for obvious reasons we haven’t talked about that. We’d just leave it at that. Rob Stone – Cowen & Company: Okay, all right. If you’re not permitted to say, I understand. Thanks very much.

Thank you, Rob.

Thank you. Our next question comes from the line of Yair Reiner with Oppenheimer. Please go ahead.

Hello? Yair Reiner – Oppenheimer: Can you hear me?

Yes. Now I can, yes. Yair Reiner – Oppenheimer: Okay, sorry, problem with the headset.

Before I couldn’t hear you. Yair Reiner – Oppenheimer: I apologize. There’s a problem with the headset. I was just saying, first of all, congratulations on the fantastic results and very impressive guidance.

Thank you. Yair Reiner – Oppenheimer: First, just brief cleanup question. Russ, did you mention the percentage of attach rates for the multi-touch – I’m sorry, for the multimedia touch on PCs, on notebooks?

Yes. For this quarter, it was approximately 19%, which is compared to 17% in the same quarter last year. Yair Reiner – Oppenheimer: Okay, great. And then just a follow-up question on Elan, in 2005, you signed a cross-licensing agreement with ALPS. And I believe that was for single touch on notebook. As you understand it now, following this cross-licensing agreement with Elan, did they have all the IP they need to compete in the notebook segment, or did they all seem to turn out to do cross-licensing agreement with them before they can effectively compete for the OEM business?

Well, we do have a relatively broader cross-license with ALPS than we do with Elantech. I really can’t comment on whether or not Elantech feels they have all the IP required to compete effectively in the market. Yair Reiner – Oppenheimer: Okay. Very good. And the other thing is, in terms of the MP3 market, directionally do you expect it to be kind of in the same range next quarter as it was this quarter? What’s your visibility there?

As we said before, the MP3 market for us is much more opportunistic than the other two markets in terms of visibility. And in our prepared remarks and related to the guidance, we did say that we expected to see growth in – from PC applications, but the major growth driver for the quarter would come from cell phone applications. We’re actually expecting revenue from MP3s to be down sequentially. Yair Reiner – Oppenheimer: Okay, very good. And just kind of final question on the competitive landscape right now, on the wireless side, I mean, from what I can tell, you guys have essentially won all the major RFPs that are out there I guess with the exception of the iPhone. What do you think, either you are doing right or your competitors are doing wrong, because you've had such fantastic success?

Well, Yair, first of all, we’ll never underestimate our competition there, Yair. Okay? So let me tell you that we believe we have a very strong execution record in terms of working with our OEMs. We focus on offering a complete solution rather than pieces of the solutions. As you know, we have almost 0.5 billion unit of integrated solution experiences now. We have fast located very close our customers so that we have very good response in that. We are working hand-in-hand, side-by-side in terms of developing solutions. One note that I would like to highlight here is, these products are all customized, Yair. I mean, it’s not something that has been a product people will look at the catalog and buy (inaudible) price, very good collaboration between R&D teams and (inaudible) to make sure that happens. And we just have a very good experience track record in delivering those solutions. Having said that, market continues to evolve. Okay? And we have to say in the forefront in terms of innovation, and you would see us continue to invest in the marketplace to strengthen the areas where we feel we need to vis-à-vis the market characteristics. Yair Reiner – Oppenheimer: Okay. I guess I just have one other question. In the past, you’ve talked about being resource constrained and I guess not being able to go as aggressively after all the opportunities have been out there. Is that still the case, or do you feel that you are at this point more or less able to go after the business that you want to go after?

We still have a very robust pace of design activity inside the company. It’s probably not as out of balance as it was previously, but we haven’t seen a big drop-off in design activity. Yair Reiner – Oppenheimer: Okay. Thank you.

Thank you.

Thank you. Our next question comes from the line of Vijay Rakesh with ThinkPanmure. Please go ahead. Vijay Rakesh – ThinkPanmure: All right, guys, just one follow-up on that Elan thing. The settlement with Elan, is that for notebooks and handsets both? And also, I know Elan was not able to ship outside of Taiwan, right? They were not able to ship freely to the US. Does this allow them to do that or --?

Well, these are – the cross-license patents are all US patents on both Synaptics’ and Elantech’s part. So they are just US-based patents. And the patent license is broad, and there are no restrictions as to field of use. Vijay Rakesh – ThinkPanmure: Got it. Great, thanks.

Thank you. Ladies and gentlemen, that does conclude our question-and-answer session. I would like to turn the call back over to management for any closing remark.

Thank you for being on the call today and we really look forward to updating you again next quarter. Bye-bye.

Thank you, ladies and gentlemen, that does conclude our Synaptics 2009 first quarter earnings conference call. Thank you for your participation. You may now disconnect.