Jennifer Jarman – The Blueshirt Group Francis F. Lee - Chief Executive Officer & Director Russell J. Knittel - Chief Financial Officer, EVP, Chief Administrative Officer, Treasurer & Secretary Thomas J. Tiernan - President, Chief Operating Officer & Director

Steven Fox – Bank of America/Merrill Lynch Paul Coster – JP Morgan Heidi Poon – Thomas Weisel Partners Anthony Stoss – Craig-Hallum Capital [John Venn] – Collins Stewart Daniel Amir – Lazard Capital Markets Vijay Rakesh – ThinkEquity, LLC Robert Stone – Cowen & Company Yair Reiner – Oppenheimer Jeff Schreiner – Capstone Investments

Welcome to the Synaptics second quarter fiscal 2009 earnings conference call. During today’s presentation all parties 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 on Thursday, the 22nd of January, 2009. I’ll now turn the conference over to Miss Jennifer Jarman of The Blueshirt Group.

Thank you for joining us today on Synaptics second quarter fiscal 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 of Synaptics; Tom Tiernan, President and Chief Operating Officer; 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 F. Lee: Thanks everyone for joining us on the call today. We’re extremely pleased to report the highest quarterly revenues and profits in our history especially in the current macro economic environment. Revenue of $141.5 million represented robust growth of approximately 43% year-over-year. Non-GAAP net income totaled $29.5 million up 73% year-over-year and non-GAAP earnings per diluted share was $0.84 resulting in an increase of 110% year-over-year. Our second quarter performance demonstrates the benefits of our diversification strategies. Our mobile phone revenue was up 14 times compared to the same period last year evidence of our successful execution and delivering intuitive capacitive interface solutions that enhance the user experience for these feature rick devices. Revenue from PC applications was down approximately 4% from the same period last year reflecting a widely reported softness in the notebook market. However we can see strong traction in the netbook category which was the sweet spot within the notebooks during the quarter. Revenue from non-PC applications grew roughly 178% from the prior year period. This was driven by the production ramp of the new mobile phones we highlighted for you last quarter in addition to strong recurring orders from earlier released models and the introduction of some new mobile phones I will discuss shortly. This is very clear validation that our strategy of selectively investing in additional high growth markets is working and we intend to further invest in calendar year 2009. I will now turn the call over to Russ for a detailed discussion regarding our second quarter results. Russell J. Knittel: 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 certain other non-operational and non-cash items. Please refer to our press release for the second quarter fiscal 2009 for a detailed reconciliation of GAAP and non-GAAP results. We achieved record quarterly revenue in the second fiscal quarter of $141.5 million up 22% sequentially and 43% above the comparable period last year and for the first time our revenue mix was roughly evenly split between PC and non-PC applications. On a year-over-year basis our PC based revenue declined approximately $2.9 million reflecting the general weakness in notebooks, a lower price product mix and a reduced attach rate for our multimedia control solutions. The attach rate in notebooks for multimedia controls in the second quarter was approximately 11% which was down as expected from 19% last quarter and 18% in the comparable period last year reflecting the competitive dynamics we’ve discussed on prior calls. Revenue from our non-PC applications grew approximately $45.7 million over the comparable period last year. The strong growth was driven by a 14 fold increase in mobile phone revenue which represented roughly 40% of total revenue for the quarter while revenue from portable digital entertainment applications was down as anticipated. Our non-GAAP gross margin was 41.1% compared with 40.6% in the September quarter and 42% in the same period last year. This was in line with our expectations and was primarily a function of overall product mix. We added 25 employees in the second quarter bringing total headcount at the end of December to 460 compared with 435 at the end of September. We plan to continue to add staff as we intend to selectively invest to further strengthen our market position. Total operating expenses were approximately $29.7 million in the second fiscal quarter compared to $30.4 million in the preceding quarter including non-cash share based compensation charges of $5.3 million and $5.5 million respectively. Our operating expenses were lower than anticipated primarily reflecting the timing of headcount additions which occurred later in the quarter than expected, lower legal costs to wrap up patent litigation and lower marketing and selling expenses as a result of specific actions we took in the quarter. Net interest income was $653,000 compared with $809,000 in the prior quarter primarily reflecting lower average invested balances resulting from the retirement of a portion of our outstanding convertible notes which I will talk about shortly. As we noted on our last call we continue to monitor and evaluate our investments in auction rate securities on a quarterly basis. During the quarter none of the failed auction rate securities defaulted and all of them paid interest at the contractual rates. Our valuation analysis for the quarter which takes into consideration current market conditions and other factors that impact fair value resulted in the recognition of a $6.5 million non-cash other than temporary impairment charge to our quarterly earnings and a $611,000 net reduction of temporary impairment through our other comprehensive income in the equity section of our balance sheet. As of the end of the quarter the PAR value of our investments in auction rate securities was $45.7 million and the carrying value was $29.4 million all of which is classified as long term assets on our balance sheet. We believe our existing cash and other short term investments and our expected future cash flow from operations will be sufficient to fund our growth initiatives. During the quarter we retired $59.7 million of our outstanding convertible notes at a discount of approximately 7%. After deducting the associated unamortized debt issuance costs for the retired notes we realized a $3.6 million net gain on retirement of debt. Our GAAP and non-GAAP tax rates for the quarter were 18.1% and 14.5% respectively. Both our GAAP and non-GAAP tax rates benefited from the retroactive extension of the Federal R&D Tax Credit while our non-GAAP tax rate also benefited from the tax impact of nonrecurring items. Net income for the December quarter was $21.2 million an increase of approximately 49% compared to $14.2 million in the comparable period last year. net income per diluted share was $0.60 representing roughly an 82% increase compared to $0.33 in the year ago period reflecting the combination of our strong operating performance, more efficient tax structure and the impact of our stock repurchases. Our non-GAAP net income in the December quarter was $29.5 million or $084 per diluted share compared with $17 million or $0.40 per diluted share in the comparable quarter last year representing increases of 73% and 110% respectively. Now a few comments on our balance sheet we ended the second fiscal quarter with total cash and short term investments of $136.8 million compared with $152.5 million at the end of the September quarter. As I alluded to earlier we used $55.6 million during the quarter to retire approximately 48% of our outstanding convertible notes the remainder of which $65.3 million has been reclassified from long term to short term on our balance sheet in accordance with the terms of the note. Taken into consideration the retirement of the notes we increased our net cash position by $44 million during the quarter. Cash flow from operations in the quarter was approximately $39.4 million and stock options contributed $971,000. Capital expenditures were $2.9 million in the quarter primarily for general infrastructure and test equipment, capital depreciation was $1.5 million for the quarter. Receivables at the end of December declined to $81.7 million compared to $86.6 million at the end of September. This was despite the 22% increase in sequential revenue as we saw strong collections within the quarter benefiting from the timing of customer shipments. DSOs at the end of the quarter were down sequentially at 52 days compared with 67 days at the end of the prior quarter and our more typical range of 65 to 70 days primarily reflecting the favorable timing of shipments I mentioned earlier. We anticipate DSOs will be closer to our typical range exiting the March quarter. Inventories at the end of December were $22.1 million compared with $25.1 million at the end of September. Inventory turns this quarter increased to 15 times from 11 times last quarter reflecting the combination of the lower inventory level and the higher shipping rates during the quarter. Now I’d like to make a few comments regarding our business outlook. We entered the March quarter with a backlog of $50.6 million reflective of the current macro environment which will weigh on normal seasonality. Nonetheless we are expecting solid year-over-year growth for the fiscal third quarter. Based on our current backlog level and the visibility related to anticipated new orders we believe revenue for our third fiscal quarter will be in the range of $88 million to $98 million a 12% to 24% increase over the comparable period last year. As in the previous quarter the growth is expected to come from mobile phone applications. This relatively broad guidance is a reflection of limited visibility and the resulting cautiousness we are seeing from our customers given the macro uncertainties and the impact on consumer spending. Based on our backlog and anticipated product mix for the third quarter we expect our non-GAAP gross margins to be around 41%. We expect operating expenses to be close to flat sequentially as our anticipated increase in headcount will be offset by further reduction in legal costs and other actions we have taken to ensure discretionary spending is in line with current business levels. We are also expecting a sequential decrease in our FAS 123I charge to approximately $5.3 million compared with $5.7 million in the December quarter. For the second half of fiscal 2009 we currently anticipate our non-GAAP tax rate will be in the range of 19% to 21%. Our non-GAAP net income per diluted share for the March quarter is expected to be in the range of $0.27 to $0.37 representing an increase of 17% to 61% compared to the same period last year. We continue to closely monitor the impact of the global economic downturn. At this time considering our record results for the first half of the fiscal year and our current visibility looking into the remainder of fiscal 2009 we anticipate annual revenue growth to be at the low end of the 25% to 35% range we provided this last quarter. Given today’s environment we are very gratified to be forecasting this level of growth. I’ll now turn the call back over to Francis. Francis F. Lee: Our results show that as the market share leader for touch interface solutions in the PC market Synaptics is not immune to the broader economic conditions affecting the notebook sector. However our diversification strategy to penetrate new target markets is clearly working differentiating us from other PC German companies within the current economic and business environment. Turning to a discussion on recent product developments within our various markets, last quarter we touched on new design wins incorporating features from our Gesture Suite for notebook applications. Our developing traction in netbooks our first design win for flat screen TVs and our inclusion in two recently launched high end touch screen phones. The current recession notwithstanding design activities continues to be strong across our target markets. I’d like to make a few comments about specific progress we have made over the past few months. At the Consumer Electronics show earlier this month we announced the general availability of four additional Gestures to our Gesture Suite for notebooks, Two-Finger Scroll, Two-Finger Rotate, Two-Finger Pinch Zoom and Three-Finger Flick. Synaptics has a broad and expanded portfolio of Gesture functionalities and we expect to see continued adoption of Gestures as touch interfaces are implemented across various devices. We are pleased to announce that our dual mode TouchPad solution has been chosen for Bell’s new high end precision M6400 mobile workstation which has been designed to make video editing and graphic design easier. Our dual mode solution easily transforms the TouchPad from a navigation device to a customized launch and control center. The M6400 is shipping worldwide. Synaptics TouchPad was chosen for the all new Echo Star Dish Network ViP 922 remote control which is bundled with the DVR. Our interface solution for this remote includes scrolling regions on the right hand side and along the bottom allows the user to browse channels in an intuitive manner. This product was announced at CES and will be shipping in the US in the spring. In the mobile phone market we have added additional OEMs to our growing base of mobile phone customers. First turning to the Japanese market we have our first design win with NEC Mobile. NEC has integrated our ClearPad solution to enable intuitive and contextual controls in the NTT DOCOMO prime series N-01A mobile phone. These solutions also support our enhanced Gesture recognition technology which enables single-finger gestures as well as multi-finger gestures such as pinch. This product is now shipping in Japan. We were also awarded our first design wins with UT Starcom who has integrated our ClearPad capacity touch sensing module into the AT&T Quick Fire Phone which is now selling in the US. This interface enables advanced Gesture based control such as click which allows for easier and more intuitive navigation. In the China market we were awarded our first design win with Meizu Electronic Technology. The Meizu M8 mini one phone uses our ClearPad solution enabled with pinch and flick gestures. The M8 is shipping in China in the March quarter. We’re also pleased to announce several new design wins with existing accounts namely LG and Sharp. In early 2007 we launched the first shipping clear capacitive touch screen in a mobile phone with LG Prada. Today our ClearPad technology is also being featured in LG Prada 2 which also incorporates our enhanced Gesture recognition technology to provide effortless finger control and multi-touch gestures. This phone is currently shipping in Europe. Our ClearPad solution is also providing the touch screen interface for the LGL-01A another prime series mobile phone with NTT DOCOMO. The ClearPad enabled phone offers a sleek design which allows interaction with media applications including a music player, photo and document viewer, broadcast television and maps. It is now shipping in Japan. [Inaudible] initial design with shop in 2008 our ClearPad enabled touch screen solutions are shipping with two more mobile phones from NTT DOCOMO in Japan. The prime series SH-03A and the pro series SH-04A. Finally Compulab has announced its enterprise digital assistant exeda which enables custom built devices leveraging the Android and Angstrom Linux platforms. These devices feature a Synaptics map point solution which is a very small form factor touch pad that gives uses very small intuitive input device without sacrificing usability. The exeda will be shipping in March. Of course the other design wins we cannot discuss due to NDAs and our policy of respecting the wishes of our customers. With several of this quarter’s design wins utilizing some of our more advanced features and functionality such as dual mode and our own library of gestures for both TouchPad and ClearPad we continue to reinforce our position as the leading innovator in our market helping our OEM customers deliver differentiated products to the marketplace. Now I would like to make a few comments regarding the general business environment as we enter the second half of the fiscal year. Clearly the high degree of widespread economic uncertainty continues and shows few signs of subsiding in the near future. This has significantly affected visibility and near term growth rates in the PC market. I’d like to make it clear that the resulting impact to Synaptics’ core notebook business is purely reflective of the overall market environment. We do not believe that his quarter’s results signify any major shift in the competitive landscape where our win rate for new designs remains very consistent with historical patterns as does our market share leadership. While the market today has its challenges looking to the five years out the market for notebook is still projected to grow in mid to high double digits based on factors like the continuing migration from desktop to notebooks, proliferation of wireless connectivity and adoption of portable computers in developing countries. Netbooks the bright spot in notebook category during the holiday season are merely an extension of this trend. Synaptics is very well represented in the netbook arena with our design wins at key notebook OEMs which include products currently shipping HP, Dell and Acer. Turning to our new markets we remain less susceptible to fluctuating growth rates in the mobile phone market as we are in the early stages of adoption and penetration. This initial lack of our diversification strategy is serving us very well in today’s environment. The resulting shareholder returns enabling us to continue to invest strategically and selectively in future market opportunities so that we emerge from the economic downturn in a better position in both our existing and target markets. In summary we are very proud of what we have achieved and are well positioned to take advantage of the emerging and growing digital lifestyle trend. While we remain cautious about the macro environment it’s apparent from the product update I just provided that our traction in the mobile phone market continues to build. We added new OEM customers, moved some of our existing accounts and clearly demonstrated our momentum with new designs. We continue to expect fiscal 2009 to be an outstanding year for Synaptics. As I have said in the past the company’s fundamentals including our design win rate and balance sheet are extremely healthy. We remain internally focused on the long term growth opportunities in front of us and we continue to execute the strategies that have driven our success even during this challenging time. As is evident from our guidance we expect our revenue mix to reflect continued growing contributions from mobile phone applications over the balance of the fiscal year and are well on track to achieving a record year for both revenue and profits. That concludes our formal remarks and we will now turn the call over to the Operator to start the Q&A session. Question-And-Answer Session Operator Ladies and gentlemen at this time we’ll begin our question-and-answer session. (Operator Instructions) Our first question is from the line of Steven Fox – Bank of America/Merrill Lynch. Steven Fox – Bank of America/Merrill Lynch: A couple questions, just going back over some of the new win commentary, you mentioned there’s wins that you can’t discuss, I wasn’t clear whether you were saying they were other wins in the quarter that will help revenues over the next couple quarters and if you can maybe generally talk about whether that was more handset related or other areas. Francis F. Lee: Basically it is our general policy every quarter when we talk about it we’ll respect our customers’ wishes as well as our policy here in the NDA that we don’t talk about all the design wins that get covered in the quarter and I was just trying to be very explicit with audiences this does not cover the universe of other design wins that we have done or are shipping in the quarter. This is not meant to sign anything that is peculiar to this particular quarter, Steve. By the way that is our policy moving forward as well. Steven Fox – Bank of America/Merrill Lynch: When you look at the revenue outlook you provided is there any other color you can provide around served market expectations besides the fact that you’re cautious on the PC markets? Francis F. Lee: As you know, Steve, the PC market continues to be a concern of a lot of people certainly the fact that Intel for example has moved the earnings twice that that is an indication that frankly I don’t know whether the bottom is flattened out or not. That has factored into our guidance in terms of how we do that much like we have found that last quarters. We are participating very healthily in the part of the notebook that is growing and in the netbooks. Frankly that represents the leadership position that we have always said that we will maintain and will continue to maintain. One more note, Steve, about your comment about, you may have misunderstood, about what we said on not disclosing other design wins. That they are new designs that we can’t yet disclose this quarter, that is a factual statement. So what I told you is a policy as well and it did happen this quarter. Steven Fox – Bank of America/Merrill Lynch: That’s what I was getting at. That’s helpful. Lastly, looking at the operating expenses maybe going out more than one quarter, as you look out and considering that you’re still hiring design engineers would it be reasonable to expect to see op ex start to increase after this quarter given that the legal expenses are coming down and are flattening out or how should we look at that beyond the March quarter? Russell J. Knittel: That’s correct, Steve. We are continuing to add to our staff and as Francis said in his prepared remarks, we do intend to continue to selectively invest to enhance our market position coming out of the current downturn. So once we get beyond the March quarter it’s a reasonable expectation that you will see our op ex again start to trend up.

Our next question is from the line of Paul Coster – JP Morgan. Paul Coster – JP Morgan: Can you give us some sense of how the pricing trend is happening in both major segments? You have had great success in maintaining gross margins at this level. I know many investors are concerned that in time it will deteriorate. Can you just give us some sense on how you’re able to sustain this kind of margin level? Russell J. Knittel: There’s no question that our overall average selling price did move down in the quarter and it was one of the reasons that we saw a decline in year-over-year revenue contributions from PC because we are selling into a lower priced product mix one of those being the netbook category which does have physically smaller product and because our pricing reflects the amount of the third party content pricing follows with that. Just because something is lower priced doesn’t mean necessarily that it has lower gross margin profile associated with it. Francis F. Lee: The other part about it, Paul, is we have been at this thing for a long time, like I said the ASP in general of consumer electronics continues to decline or either you expect more functionality for the same dollars. The competitive and the pricing dynamics has really not changed and we focus on cost reductions continuously. This is really through a combination of those two factors that we continue to broadcast that that 40% to 45% is near our target gross margin range on a blended basis. Paul Coster – JP Morgan: There’s a lot of interest in the market on multi-touch, on clear touch phones at the moment. The pinch capability that you’re now bringing to market with ClearTouch, is that the capability that you are able to offer let’s say three months ago or is it a new capability? How close is it to the pinch capability that we’re all familiar with on Apple iPhones? Francis F. Lee: First of all, Paul, I think I have said it a number of times, the Gesture that we offer here frankly needs to go hand in hand working with OEM customers so they get worked into the user interface part of the functionality. First of all, there is really no secret in the sense that we kept our technologies can offer the kind of capabilities. To answer your question three months ago if we were working hand in hand with OEM customers the interest manifests that way, then of course we were able to do that. There was really no reason why we could not. Now the fact that we are announcing those kind of capabilities like the Gesture Suite enhanced gesture technology is the same way we see the market with concept prototypes with usability patterns. That’s how we stem interest in terms of creating very unique customizable features much like how we are continuing to do different kinds of dual mode technologies. Paul, we were capable of doing that on a base technology, nothing that could have stopped us obviously we are not an end device company and we work with OEM partners to introduce those kinds of features out in the marketplace.

Our next question is from Heidi Poon – Thomas Weisel Partners. Heidi Poon – Thomas Weisel Partners: I would like to ask about in terms of your design wins, in terms of the complexity of the solutions that you’re winning, it looks like your competition is winning the lower margin type sales such as the multimedia strip on the PC side. On the mobile side, would you say that this year do you have confidence that you have most of the more dominant or flagship designs that are scheduled for launch this year? Francis F. Lee: Heidi, innovation is our strength, so of course a capacitive navigation clear technology is more complex than the opaque kind of navigation but to say the innovation stops just because you see the clear capacitive technology is also not true. Just like what Paul was asking about Gestures and how it works hand in hand with device wholes, how we say power, how we provide unique kind of gestures that fits OEMs personalities and characteristics. So I guess the summary of what I’m saying here is you can expect, Heidi, as we move forward here how we keep on reinventing the TouchPad doing different functionalities you should expect a similar kind of up on the clear touch solutions, Heidi. Heidi Poon – Thomas Weisel Partners: In terms of the development or progress of the one touch would you still say that most of the designs you’re having right now are still module based? Francis F. Lee: Correct. Most of the design is in the module base. Heidi Poon – Thomas Weisel Partners: Usually these customized solutions would lead you to a sole source position, right? Thomas J. Tiernan: Generally that’s correct. Francis F. Lee: In general, yes. Heidi Poon – Thomas Weisel Partners: In terms of netbooks, Intel has made comments that it represents more of an incremental market development for them, do you see the similar trend and also could you comment on in this upcoming cycle in terms of the competitive landscape of netbook designs, do you see any change there or more competition especially after your cross-licensing agreement with Elan? Thomas J. Tiernan: Definitely we see netbooks overall as adding to the volume of the whole notebook space. Francis F. Lee: On the whole notion you mentioned about Elantech there for a minute and I think I have commented even last quarter we don’t expect a Elan settlement to be material in any way, shape or form to Synaptics’ business moving forward because the reason why we took on the Elantech settlement is really to promote a strengthening IT position and put the lawsuit behind us much like how we have handled a settlement with [Elks] in the earlier time there. We remain very confident as in my prepared remarks that we will be the market leader in the notebook space, our design win rate inclusive of the netbook has not changed in terms of the market dynamics and the reason why we continue to have a high confidence level in it is because of all the other enabling factors that help our OEM and ODM partners to succeed, Heidi. Heidi Poon – Thomas Weisel Partners: Finally given that you will continue to invest through this downturn, at what timeframe do you think you’ll be able to maybe allocate more resources to address growing consumer electronics or appliance trend of having more touch solution? Francis F. Lee: The interesting thing about Synaptics is we see a very long run rate here with capacitive enabled solutions and we are one of the few pure play capacitive solution providers out there. The fact that that this general economic downturn is impacting a lot of our competitors is because they play in more of a portfolio play and when that hit, that really hit them bad. We are taking used when other people may be pausing hiring or may be shutting down operations and stuff like that, we are not skipping a bit here. We’ll continue to invest and that will include other capacitive opportunities. Frankly the space that we are playing in, there is tremendous room to grow. Where you see us investing is continue to grow in the target market as we have done and then we have to invest in technologies and innovation capabilities that will make us even stronger in that space. Thomas J. Tiernan: Our whole goal is to take this horizontal capable technology and by further investing in it, extend its reach and expand the capabilities of that as we address new opportunities in the future.

Our next question is from Anthony Stoss – Craig-Hallum Capital. Anthony Stoss – Craig-Hallum Capital: If you wouldn’t mind give us a sense of your $50 million in backlog, is that skewed more towards mobile phones or maybe just a sense of what that entails? Russell J. Knittel: It is skewed towards mobile phones. Anthony Stoss – Craig-Hallum Capital: Also, Russ if you don’t mind commenting about lead times, how they’ve changed over the last quarter or so, if they’ve changed? Russell J. Knittel: Our manufacturer lead times are still relative consistent with what they’ve been historically, four to six week range is what’s required for us to process an order from a customer and deliver assembled tested product. Anthony Stoss – Craig-Hallum Capital: Also could you give us a sense, maybe this is better off for Francis, is your capabilities on the mobile handset side, is that what’s winning you the deals, is that becoming more price competitive on some of these designs that you’re bidding on? Francis F. Lee: We are one of the only pure capacitive manufacturing claiming to have shipped half a billion of interface solutions and really our value proposition to our customers is we know how to enter capacitive solutions into the hose devices better than anybody else. That includes ideas, it includes our challenges related sometimes not even to the core technologies. What sometimes you in the general public see here is patents in the area of disclosable intellectual property, there’s a lot of trade secret know how in terms of doing consistent yields, consistent performance, like people said that there was in the details. We have plenty of experience in details and we believe that’s why we are recognized as a leader out there. As far as pricing is concerned, it’s always challenging, always challenging. We play in a part of the market in consumer electronics nothing has changed in that particular area and you have to be in the ballpark figure to play and if you’re not in the ballpark figure to play, you cannot win on technology alone. Anthony Stoss – Craig-Hallum Capital: Another tough question I guess for you, Francis, if you could look out into the future at what point do capacitive touch phones start to bypass resistive touch in your opinion? Francis F. Lee: That’s hard for me to say, but I can certainly tell you that, let me just give you an analogy there, if you look at the PC market, I talked about it when we went IPO in 2002, that I expect by the end of the decade that there will be more notebooks in PC than desktops. Now is that going to happen in the SmartPhone category or in the mobile phone category, take about x number of years similar to notebook computers? I don’t know, but I’ll tell you the single biggest thing that’s going t enable that in my mind is applications that OEMs and operators is going to dictate on what kind of cell phone that is going to come out. For example, Anthony, you notice that I said a lot of our phone designs have been released in Japan. In Japan, they used the cell phones quite a bit differently than we do in the US. They use it for all kinds of applications beyond voice calling. As long as operators all over the world and in major markets, then you’re going to see that. So just to conclude the remark, I think the revolution already has started. If you count the number of new designs to serve the capability that we have I will arguably say that has already happened. There will be more new design on the capacity in a feature rich forms, use the capacitive technologies and resistive technologies. And, the actual volume is picking up very, very fast so when you look at the [gradient] of the composite touch phone option, in my mind it already exceeded the [gradient] on the resistant screens. Anthony Stoss – Craig-Hallum Capital: On the concept of touch monitors there seems to be a bunch of new models coming out. None of them appear to be capacitive. My final question is your thoughts on if capacitive has a role to play in touch monitors? Francis F. Lee: Absolutely. As a matter of fact, we have been reporting in our wide range of capacitive buttons and stuff like that on monitors. So, there’s already a way that’s already happening and I will continue to see that okay migrate in to things like televisions and stuff like that which is one of the five benefits of our monitors. As far as PC and notebook monitors is concerned there’s wide spread discussions about like Win 7 and stuff like that that is going to enable the notebooks to be touch sensitive. I would say that over certain applications, people is going to want a notebook computer to be touch sensitive especially on the one that is the slate type of notebook computers. I see a clamshell kind of notebook computer, the touch sensitive part to be less of an adoption and that’s purely because of ergonomic, not anything else. Lastly, I mean when you put touch in the notebook computers, it’s not free so for user they want to spend the kind of money on that, there’s got to be a reason behind it. So, in general I’m very excited about touch moving to monitors as well as specific notebook space. I’m just less sure about the adoption rate in terms of what the market will bear.

Your next question comes from [John Venn] – Collins Stewart. [John Venn] – Collins Stewart: First question is can you give us a sense of what the mix of net books and notebooks were in the quarter? Francis F. Lee: John, you know as we have said you know we really see the net book as the expansion of notebook and certainly of the consumer sector and we don’t break it out. Russell J. Knittel: It was a meaningful portion of our overall mix. [John Venn] – Collins Stewart: Then obviously you talked about kind of a ASP differential between touch pads for netbooks versus nettops if you will. Can you give us a better sense of what that ASP differential are? Russell J. Knittel: Again, we’re not really comfortable talking about specific pricing on products. But, they fit within that $2 to $5 range that we’ve mentioned before for 95% of our total design mix. [John Venn] – Collins Stewart: Then obviously netbooks continues to be a growth sector for you guys obviously you talked about some challenges on the notebook side, can you give us a sense in terms of what you guys are seeing in ’09 in terms of kind of market growth expectations for notebooks and netbooks? Francis F. Lee: John frankly, typically we would look at industry data like IDC, we talk to our OEM and ODM customers, I think the issue of talking about the expectation here is visibilities are very poor right now. As long as the people do not sense that we have reached a bottom and arguably whether we have reached the bottom nobody really knows there are some sentiments in here that the US remains to be pretty robust and Europe is not doing as well and Asia is kind of flat to maybe still looking for the bottom. So, I don’t think that you’re going to find a good consensus in terms of what the growth rate for the balance of fiscal year 2009 is concerned. So, as a company, what we have to do is focus on the areas that are doing well and that’s the notebooks and we have to be responsive to our customers in case they come in with upside orders and so on and so forth. I guess the good news there is we don’t really at least see severe inventory issues in the channels anywhere on the notebook computers. [John Venn] – Collins Stewart: Do you at least see growth in the overall notebook market on a year-over-year basis in ’09? Francis F. Lee: Well my personal feeling is that there probably will be but on the other hand I don’t have a crystal ball on the general macroeconomic situation. So, it depends on how much of a doomsday believer you are by the end of this calendar year whether this December quarter is going to be worse between ’09 and ’08. [John Venn] – Collins Stewart: The obviously you gave us an update in terms of your full year expectations. If you think about your full year expectations and obviously you’ve talked about kind of slowdown in PCs, can you give us a sense of how much of your kind of revised expectations for the full year reflects kind of a slowdown PCs versus handsets? Russell J. Knittel: Well as we said on the call the guidance does contemplate the fact that the growth is going to come from mobile phone applications. So, in our full year outlook we have contemplated the current softness in the notebook market. [John Venn] – Collins Stewart: And your revised guidance versus a quarter ago are you seeing any sort of downward revisions in your handset expectations or are your handset expectations of ’09 growth the same as it was previously? Russell J. Knittel: Handset revenues have been very strong as you can see from our December quarter results. Based on the designs that are currently shipping, some of the new designs Francis mentioned on the call, we continue to feel that for the remainder of this fiscal year that cell phone applications are going to be the next growth driver for us. So, what that means going forward for the second half of the year, greater than 50% of our revenue is going to be coming from the cell phone market. [John Venn] – Collins Stewart: The last question for me is from a technology point of view one of your competitors has recently kind of demoed kind of the ability to support up to kind of 10 simultaneous touch points on a capacitive touch screen. Can you maybe just comment on that and are you seeing kind of RFPs and interest from some of your customers for increasing simultaneous points of touch on a touch screen? Francis F. Lee: I guess those kinds of claims in interesting. At the end of the day, I think we cannot get carried away with technologies versus applications. I guess what I am saying is I can talk a lot about technologies in terms of doing a lot of things in the end that really doesn’t matter. I don’t think you can do 10 fingers matters. I mean it may be interesting in terms of a technical research paper and stuff like that but I cannot think of usability that people will buy to buy that kind of stuff. So, as far as I’m concerned I just take it as a scientific research paper that I don’t think it’s got any commercial relevance.

Your next question comes from Daniel Amir – Lazard Capital Markets. Daniel Amir – Lazard Capital Markets: A couple of questions here, first of all on the mobile phones front can you comment about how skewed the business is to maybe one or two models or is it pretty much well diversified among the different models that you guys are designed in to? Russell J. Knittel: Last quarter it was somewhere between 15 and 20 different models that were shipping. Daniel Amir – Lazard Capital Markets: And were the revenues skewed to just two or three models? Or, was it pretty well diversified in terms of revenues? Russell J. Knittel: Well, just like in the notebook market you do have some models that ship more volumes than others. Daniel Amir – Lazard Capital Markets: In terms of the mobile phone opportunity I guess going forward here, do you expect it to surpass I guess PCs by [inaudible] maybe in terms of revenues for the company? Russell J. Knittel: I think it will surpass PC revenues in the March quarter. Daniel Amir – Lazard Capital Markets: And going forward it would stay at that level then? It should stay higher than PCs? Russell J. Knittel: Well, part of that is a function of how both markets develop for the remainder of the year, right. I mean if notebooks and the PC market come back in a very strong fashion in the second half of the year we’re very well positioned as a competitor to take advantage of that growth. If it doesn’t manifest that way then again, we’re very well positioned in the mobile phone market to continue the ongoing trend that we’ve shown in the December quarter and are forecasting for the remainder of the current fiscal year. Daniel Amir – Lazard Capital Markets: Francis, in terms of strategically about new applications that we should look at, it looks like calendar year ’09 you’re obviously largely focusing on the mobile phone opportunity but as we look in to 2010 what’s kind of in the drawing board that is as big applications that could be using capacitive touch that you think that could be another growth driver for the company going forward? Francis F. Lee: Well, I have said that our approach to growing some of those other vertical market is through the deployment of OneTouch and I will say that it will continue to be true. So, the beauty about OneTouch is we can deploy it in to a number of vertical markets without dedicated go to market and sales and marketing resources. So, that is our way of trying to penetrate other vertical markets without influencing the focused market we have. Now, the beauty about the strategy there okay is when you add up all the other potential vertical markets out there, it’s actually a huge opportunity sitting out there for us without diluting our resources. Another way we’re thinking about that Dan is we already now today situated very close to some of our key customers. So, LG, Samsung and HP and so on and so forth. Those companies sell more than our focused target market. There’s really no reason when our go to market resources [inaudible] we could encroach on some of the other product segments that they have and that will be our focus moving forward around those two fronts.

Your next question comes from Vijay Rakesh – ThinkEquity, LLC. Vijay Rakesh – ThinkEquity, LLC: Just talking about macro here, when you look at your backlog coverage for the March quarter it looks like your backlog coverage is like 50% versus your December quarter you had almost 75% backlog coverage. I was wondering how comfortable you are with the guidance given the macro? Russell J. Knittel: Well our typical turns business is in the 40% to 60% range and based on our backlog coverage at the end of the quarter and what we guided to we would be in a range of 40% to 50% so not quite as conservative as we were in the prior quarter but still well within what our typical range is for turns. Vijay Rakesh – ThinkEquity, LLC: Looking at the notebook market overall it looks like notebooks are down about 20% going in to the March quarter but assuming your backlog is more skewed here, the $50 million is more skewed towards handsets, it looks like notebooks are coming down quite a bit more in to the March quarter, down like 35%ish. Is that more inventory or can you give a little bit more color on that? Russell J. Knittel: Q2 revenue for us was down 4% year-over-year. Some of which of that was guided, as I mentioned on the call, by lower price mix, just the general state of the notebook market and lower attach rates on multimedia vis-à-vis our TouchPads. For the current quarter, the range we’ve given you contemplates declines in notebook revenues year-over-year. Vijay Rakesh – ThinkEquity, LLC: And on the SmartPhone side, I know you said you’re going to focus on that, what’s the company landscape like as you see new phones coming out from the next generation phones coming out on Google and Palm and Nokia and all of those. What are you seeing people moving more towards chip solutions? What’s happening there? Francis F. Lee: Well first of all Vijay I hope that I have been very clear that when we tell you design activities are strong, those will generally result in revenue six to nine months out. So, when Russ and I mention about it in the March quarter that remains to be strong, those are design wins that has happened some months ago and we’re basically broadcasting as well that design activities continues to be strong. I know there is a lot of market chatter today about chip solution and modular [play] solutions and I just want to remind you Synaptics is not saying that we have to have one kind of business model to sell devices. At the end of the day we have to make sure our OEM partners are successful in terms of introducing capacitive touch solutions and you’re going to see some products we might sell chips and sell modules depending on the kind of business arrangement that we make with each of the OEMs. At the end of the day, like I said, our strength we believe is in terms of integrating capacitive solutions on to the whole devices and you’ll continue to see us focus on that. We will succeed whether it is chip or module.

Your next question is from Robert Stone – Cowen & Company. Robert Stone – Cowen & Company: I know you guys don’t specifically forecast segments going forward but looking back at the December quarter I was quite surprised to see how well you came in to your revenue range given the big fall off in PC notebooks and PCs reported by others. As the quarter came in was that because handsets were much stronger than you had anticipated or did the quarter come together more or less the way you were thinking at the time you gave the guidance? Russell J. Knittel: Well generally things were within the range and the different scenarios that we had contemplated when we put the guidance range together. But, there’s no question that as we got in to the quarter December and we got to mid quarter order rates for notebooks dropped off dramatically. Francis F. Lee: By the way Rob, I think during the quarter both Russ and I, we have reiterated that Synaptic is not immune from the macroeconomic situations and therefore we have given a wider than normally what we do in terms of the ranges because there is lack of visibility. Unfortunately, the lack of visibility did come out in the sense that the notebook were weaker than expected as we moved through the quarter. But, we had already factored that in to our guidance.

Your next question comes from Yair Reiner – Oppenheimer. Yair Reiner – Oppenheimer: Just a quick housekeeping question, any 10% customers this quarter? And, are there any new ones this quarter? Russell J. Knittel: We did have a couple of 10% customers in the quarter, yes. Yair Reiner – Oppenheimer: Are you able to comment on whether any of them are new? Russell J. Knittel: Well again, generally we’re selling to the ODMs directly and the ODMs as you know manufacturer products for multiple OEMs. Francis F. Lee: The dynamic has not changed is what Russ is trying to say. The demand can shift in to various ODMs and stuff like that but the dynamic is the same. Yair Reiner – Oppenheimer: When we look out in to 2009 there seems to be two kind of trends in the notebook side. On the one hand lower ASPs from netbooks, the other hand maybe higher ASPs from larger TouchPads that you see on notebooks trying to emulate the MacBooks. When you weigh those two factors out net/net do you think that your ASPs in notebooks are going to be down, flat or up for the balance of the fiscal year? Francis F. Lee: First of all, when you look at the macro trends right, four, five years ago there’s no doubt the TouchPad as a vanilla flavored TouchPad will compute a decline in terms of ASP just because the nature of the consumer market as well as we’re getting further and further penetration in the various segments. I don’t think that’s going to be different in any way moving forward here. So, what Synaptics has very consistently been able to do here is keep on trying to create more value in one after the next one. Obviously the last one was MMB which is the multimedia buttons and this one is the larger TouchPad. We will not know the adoption rate of the speed of some of those things but in general you should factor in the ASP of the entire notebook sector. When you average the summary of it over time, the ASP will continue to decline.

Your next question comes from Jeff Schreiner – Capstone Investments. Jeff Schreiner – Capstone Investments: The one question I wanted to get in just real quick is there’s been talk about the notebooks slowing, the macro issues, the netbooks and you guys obviously securing some design wins there but how does this macroeconomic issue change the buying habits of the end user of notebooks? And quite possibly create a sub $500 netbook market becomes very strong and you either buy a netbook or you buy a notebook and the pricing of a notebook might be only $750 to $800? How is the pricing and this strong demand for these lower price notebooks really driving things for Synaptics at this time? Francis F. Lee: First of all Jeff I don’t have a crystal ball of the markets but I’ll share with you what I’m thinking. I know that netbooks now are getting a lot of visibility because in today’s tough economic environment the are in general lower price points, probably get their share – and also, a lot of the netbooks goes to second or third notebooks in the family for younger children and stuff like that so there is no bout in my mind they continue to grow. However, I do not expect the netbook to be the dominate form factor of the notebook factor. There are lots of reason why individual wants, they have for a lack of a better word more of a traditional notebooks. The fact that there is all this macroeconomic uncertainty to me is no different than why a lot of the retail stores are suffering and all that stuff is going on and people are trying to look for better deals before they buy clothing, before they buy shoes, before they buy any of this stuff. To me it’s no different. So, as far as I’m concerned I do believe the notebook reach will continue to expand and I do believe the lower part of the notebook is good in the sense it expands the [inaudible]. I do not believe the netbook is going to be the dominate form factor that’s moving forward here.

Management please continue with any closing comments. Francis F. Lee: Thank you for being on the call today. We look forward to updating you again next quarter. Thank you.

Ladies and gentlemen this does conclude the Synaptics second quarter fiscal 2009 earnings conference call. If you would like to listen to a replay of today’s conference you can do so by dialing 303-590-3000 or 800-405-2236, input the access code 11124754. Those numbers again 303-590-3000 and 800-405-2236, input the access code 11124754. We’d like to thank you very much for your participation today. You may now disconnect. Have a very pleasant rest of your day.