Tom Tiernan - President and Chief Executive Officer Kathy Bayless - Chief Financial Officer Alex Wellins - The Blueshirt Group

Kevin Cassidy - Thomas Weisel Partners Yair Reiner - Oppenheimer & Co. Shaw Wu - Kaufman Bros. Ian Ing - Broadpoint Rob Stone - Cowen & Co. Blayne Curtis - Jefferies John Vinh - Collins Stewart Rajvindra Gill - Needham & Co. Jeff Schreiner - Capstone Investments Lauren Stoller - Lazard Capital Markets Paul Coster - JP Morgan Vijay Rakesh - Thinkequity Anthony Stoss - Craig-Hallum

Ladies and gentlemen, thank you for standing by. Welcome to the Synaptics second quarter fiscal 2010 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, January 21, 2010. I’d now like to turn the conference over to Alex Wellins with The Blueshirt Group. Please go ahead.

Good afternoon and thanks for joining us on Synaptics second quarter fiscal 2010 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 Tom Tiernan, President and CEO; and Kathy Bayless, the Company’s Chief Financial Officer. In addition to the company’s GAAP results, management 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 the press release issued after the market closed today for a detailed reconciliation of GAAP and non-GAAP results. Additionally 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, 2009 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. With that said, I’ll turn the call over to Tom Tiernan. Tom.

Thank you, Alex and I’d like to welcome everyone to today’s call. I am pleased to report another quarter of solid financial results. We posted revenue of $133.3 million in the December quarter, which was near the high end of our guidance range and represented an 11% sequential increase. Non-GAAP gross margins rose slightly to 41% and non-GAAP net income was $21.7 million or $0.62 per diluted share, up sharply from the September quarter. Non-PC revenue grew 33% sequentially, showing robust demand for our solutions in both mobile phones and personal entertainment devices. As a pure play in human interface solutions, Synaptics continues to capitalize on the significant industry trends towards the implementation of touch based solutions in a variety of consumer electronic devices. We continue to demonstrate solid execution in our target markets and we recently introduced two key innovations to our customers. First, Scrybe is a next generation software enhancement to our TouchPad driver that increases productivity by allowing users to do more with their TouchPads than ever before. Second, Fuse is a concept mobile phone that we believe may help to drive change in the way consumers and OEMs think about phones in the not too distant future. We received positive reactions to these innovations at the recent CES show. I will ask Kathy to review our financial results with you in detail and then I will provide you with a closer look at our design wins, recent product innovations and key growth drivers in the markets we serve before taking your questions. Kathy.

Thanks, Tom. Revenue of $133.3 million for our second fiscal quarter was near the high end of our guidance, an increase of 11% over the previous quarter. The revenue mix from PC and non-PC applications was approximately 65% and 45%, respectively. On a sequential basis, revenue from PC applications was relatively flat. Internal business we saw in the December quarter was below our expectations. As we have indicated in the past, our revenue can vary quarter-to-quarter from timing differences between our sell in and the sell through of the assembled notebooks as well as the product lifecycle of our customers’ products. On a year-over-year basis, revenue from PC applications increased 5%. A strong increase in notebook TouchPad revenue was mostly offset by the lower attach rate for multimedia controls. The attach rate for multimedia controls a year ago was around 11%. The attach rate in the December quarter was approximately 3%, consistent with the prior quarter. Revenue from non-PC applications increased 33% from the prior quarter, driven by the increasing adoption of Synaptics capacitive touchscreen solutions by major mobile handset manufacturers and strong demand for personal entertainment devices. Revenue from non-PC applications declined 17% from the comparable period a year ago primarily due to product mix changes. In addition, module ASPs and related costs have also come down from the prior year as market adoption of capacitive touchscreen solutions has increased. Non-GAAP gross margin was 41%, slightly above our gross margin of 40.8% in the prior quarter and reflects our overall product mix. Total operating expenses were $39 million compared to $33.7 million in the preceding quarter, including non-cash share based compensation charges of $11.3 million and $6.6 million respectively. Non-cash share-based compensation expense in the December quarter includes an incremental onetime charge to correct the cumulative impact of calculation errors in the third party software that we and other companies use to quantify FAS 123R expense. Onetime charge increased FAS 123R expense by $4.5 million or $3.1 million net of tax. Excluding share based compensation; our operating expenses increased by approximately 2% and were inline with our expectations. Total headcount was 553 compared with 534 at the end of September, reflecting continued R&D investments to enhance our technology and product design capability. Interest expense was $968,000 compared to $1.4 million in the prior quarter. The decrease primarily reflects the impact of the settlement of $63 million of our convertible debt on December 1, 2009. Our GAAP and non-GAAP tax rates were 13.2% and 19.6% respectively compared to GAAP and non-GAAP tax rates of 24.9% and 20.6% respectively in the September quarter. Our GAAP tax rate for the December quarter decreased sequentially as the September quarter included a write-off of deferred tax assets. Non-GAAP net income was $21.7 million or $0.62 per diluted share compared with $17.2 million or $0.48 per diluted share in the prior quarter. Turning to our balance sheet, we ended December with cash and short term investments of $140 million, down from $197.6 million at the end of September. Cash flow from operations was $25.7 million. In the December quarter, we used $63 million to retire the convertible debt that I mentioned before and we repurchased approximately 783,000 shares of our common stock for $19.1 million. Year-to-date we have repurchased the equivalent of approximately 5% of total shares outstanding. Currently shares outstanding are less than $33.5 million. Employee participation in our employee compensation plans contributed $509,000 for the quarter. Capital expenditures for test equipment tooling and general infrastructure were $2.1 million and depreciation was also $2.1 million. Receivables at the end of December were $100.3 million compared to $91.1 million at the end of September. The increase in receivables was primarily due to the higher revenue level in the December quarter. Day’s sales outstanding were 68 days compared with 69 days from the prior quarter. Inventories were $15.8 million compared to $15.7 million at the end of September and our inventory turns were $20 compared with $18 in the prior quarter. Looking ahead to the March quarter, based on our backlog of approximately $58 million exiting the December quarter, our expected product mix, customer order patterns and forecasts; we anticipate revenue will be in the range of $110 to $115 million, an increase of 9% to 14% compared to last year. The March quarter generally reflects seasonal trends, however, personal entertainment devices currently look below seasonal norms and are underrepresented in our backlog. Using our current backlog as a proxy, we expect our non-GAAP gross margins to be similar to the December quarter, anticipate some incremental increase in operating expense this quarter as we continue to selectively enhance our engineering and technical capabilities, meet the opportunities we see ahead. We expect a FAS 123R charge to be in the range of $7.5 million to $7.8 million. We expect our non-GAAP tax rate for the March quarter and fiscal year to be in the range of 18% to 20%, slightly lower than our prior guidance. Non-GAAP net income per diluted share for the March quarter is expected to be in the range of $0.39 to $0.45. Given our results for the first half of the fiscal year, customer forecasts, design wins and our pipeline of new business opportunities; we anticipate revenue for the fiscal year to be in the range of $495 million to $505 million. I will now turn the call back over to Tom for a discussion of our design wins, recent product innovations and key growth drivers in the markets we serve.

Thanks, Kathy. I’ll pick up with a review of our key markets, starting with the PC sector. We remain the clear market leader in delivering TouchPads to PC OEMs. Subject to the typical quarter-to-quarter fluctuations we regularly see, our market share remains in the 65% to 70% range and we have seen no changes in the competitive landscape. Consistent with the last several quarters, we saw strength in consumer oriented notebooks. Reviews of Windows 7 have been positive and Synaptics would benefit if the adoption of Windows 7 were to trigger a corporate refresh cycle in calendar 2010. Additionally, we are tracking other market trends that we believe board well for our business. The first is the adoption of multi finger, gesture enabled TouchPads. In the December quarter, about 60% of our TouchPad shipments were multi finger enabled, a full 10 percentage points higher than in the September quarter. Another trend is the adoption of our ClickPad solution, an integrated TouchPad that incorporate the functionality of traditional mechanical buttons typically located below the TouchPad, thus enabling a more sophisticated and clean industrial design. ClickPad’s generally carry higher ASPs and give Synaptics a larger footprint in the overall notebook design. Since ClickPad’s shipment started in the December quarter, they comprised a low single-digit percentage of our overall TouchPad unit shipments. OEMs are actively designing ClickPad’s into their products and we expect ClickPad shipments to increase in a meaningful way going forward. Synaptics continued to garner a number of notable design wins during the quarter. A sampling of new designs shipping in the market include our multi touch TouchPads in HP ProBook 6545b, the Lenovo IdeaPad UA50P, the Samsung R780 and the Sony VAIO C and CES. New netbooks include the Acer Aspire 1420P, the Asus Eee PC 1201N and the Fujitsu LifeBook MH380. Our ClickPad is shipping in the new HP Mini 2102, the first netbook in the market with a Synaptics ClickPad. Underscoring our success in the notebook category, five out of the six notebooks that were nominated for the Best of CES Award, feature Synaptics TouchPads. We recently announced Scrybe which allows customization of easy-to-use, gesture based workflows that enable users to launch and execute popular applications and tasks without ever touching the keyboard. You can download the beta version of Scrybe now by visiting www.uscrybe.com. Scrybe works on the vast majority of Synaptics TouchPads in the market today and we are seeing strong interest from our OEMs to include it in future designs. Scrybe gesture workflow is another sample of our innovative leadership. While we are initially introducing Scrybe for TouchPad applications, it promises to be beneficial for larger format touchscreens in emerging categories like slates or tablet PCs. Since these products may not have a physical keyboard, Scrybe represents the type of gesture usage model that could help drive adoption of these form factors. As you know, several PC OEMs announced new products with touchscreen solutions at CES. Our touchscreen offering will include this feature and we anticipate revenue from this category in fiscal 2011. Turning to the non-PC category, we had a solid quarter with healthy design activity. Industry analysts suggest that smartphones will grow at nearly a 30% rate in 2010 and OEMs are motivated to implement touch widely across their product lineups. We continue to deliver solutions to the largest mobile handset makers in the world. A few of the recent mobile designs now shipping that we are able to mention include Google Nexus One, the HTC Droid Eris offered by Verizon, the Samsung H1 and M1 phones offered by Vodafone, the Sharp Aquos SH-030b offered by DOCOMO and the NEC 931N and offered by Softbank. Synaptics customers appreciate our design and innovation prowess. We take full responsibility for the touchscreen solution and work with OEMs to help them differentiate their user interfaces and usage models. Our portfolio offering of chip, tail and full module solutions is unique in the industry and addresses the diverse needs of our customers. Customers continue to engage with us in multiple ways and we expect this to continue in the future. In December, we announced Fuse, a new concept phone that we launched in collaboration with other companies that supply mobile OEMs, including Texas Instruments. We are currently demonstrating the benefits of the Fuse interface technology concepts to leading handset OEMs and believe it may help pave the way for the next generation of mobile devices. We continue to move ahead with new market applications as well. We generated our first revenue from the e-reader category in the December quarter as Synaptics technology was incorporated into the Barnes & Noble Nook and Spring Design’s Alex e-reader. We also shipped several new designs for monitors and TVs for companies including Dell and Vizio that use our OneTouch solution to replace mechanical buttons and streamline the industrial design of their devices. As we hit the midpoint of fiscal 2010, I would like to reflect on the progress we’ve made and how we see things moving forward. On the PC side of our business, we have grown our market share while weathering both a tough economy and the expected decline in our multimedia revenue contribution. On the mobile side, fiscal 2010 is a transition year for us as we have firmly established the product portfolio approach that we signaled last year. Structurally, we have continued to invest in our global design centers so we can offer local real time design support to our customers. From an innovation viewpoint, we have enhanced our gesture suite, introduced Scrybe gesture workflows and ClickPad, all of which are intended to enhance the way users interact with their electronic devices. From a market perspective, there is no doubt that the interest in touch based interface solutions is continuing to expand across multiple markets and Synaptics is the only company that can satisfy their design requirements in a flexible way. To sum up, we knew that fiscal 2010 would be a tough environment and we head into it with the goal of strengthening our overall position as we exit the year. We have made good progress toward that end and we are well positioned to take advantage of the markets we serve. Our second-half guidance reflects a return to double digit growth. As the markets continue to develop and improve, we are confident we will return to our historical growth rates. In conclusion, I would like to thank the entire Synaptics team for another quarter of solid execution. As a pure play in human interface solutions; it is the combination of innovation, technical expertise and intellectual property that will continue to move Synaptics forward. With that, let’s turn the call over to the operator to start the Q-and-A session. Operator.

(Operator Instructions) Your first question comes from Kevin Cassidy - Thomas Weisel Partners. Kevin Cassidy - Thomas Weisel Partners: I was wondering if you could say how you think the tablet PC market might change, any of the dynamics.

Tablet PCs, whether they or tablet form factors, slates, we even commented on e-readers; these are all devices that are somehow fit in between the smartphones and the classic Clamshell notebook form factor. What we see there is a very strong adoption of touch technology as a central part of those kinds of product offerings and we see that as a net new opportunity for the company and an exciting opportunity for the company overtime. Kevin Cassidy - Thomas Weisel Partners: I wonder if for your guidance for the March quarter, if you could go into a little more of the weakness that you are seeing in the entertainment sector?

Sure, in that space, as you may know, it’s a fairly concentrated market. The personal digital entertainment category for us was one of the two big growth drivers for the company in the December quarter. The visibility we have into that category in the March quarter is limited and we factored that into our guidance.

Your next question comes from Yair Reiner - Oppenheimer & Co. Yair Reiner - Oppenheimer & Co.: So, the first question, could you give us breakout for us the contribution from mobile and personal media devices as you’ve done in the past?

Yes, as a percentage of total revenue, mobile was actually 31% of total revenue. That was up from 29% in the prior quarter on a larger base and the personal digital entertainment percentage of revenue was 14% in the December quarter. Yair Reiner - Oppenheimer & Co.: Then my next question, I guess you have implicitly provided guidance for the June quarter as well and it implies a pretty healthy sequential growth from the March levels. Is that based on typical seasonality or is there kind of incremental design wins into potentially new categories that would be driving that sequential growth?

Yes. It reflects the forecast for the designs that we’re shipping and the designs that we have won and will be shipping in that horizon and you’re right, it is a sequential growth from the March quarter and it’s also up of course versus the previous year’s quarter.

Your next question comes from Shaw Wu - Kaufman Bros. Shaw Wu - Kaufman Bros.: Could you talk a little bit more in terms of pricing dynamics? This is in both the PCs and also mobile, some color there. Thanks.

Sure, and thanks, Shaw. So I guess I’d get characterize pricing overall to be still quite rational across both categories. We haven’t seen any major shifts in the pricing dynamics there. That said, as we have commented before, specific to the mobile touchscreen area, we continue to drive value engineering for the modules that we ship which means essentially getting costs out of the solutions. We continue to see reduced pricing from the substrate, the sensor vendors that we work with and we continue to pass along those cost savings in the form of lower ASPs and that as well is something that is factored into our forward guidance and has been discussed at length in the past. Shaw Wu - Kaufman Bros.: Just a quick follow up in regards to the gross margin. Kathy, you commented it would be somewhat similar in terms of the gross margin and this is despite kind of a sequential decline in REVs. Any color on kind of the longer term model there, if your price some help there? Thanks.

Sure, Shaw. Yes, we ended this quarter at 41% and we do see the March quarter as being similar. Really most of our gross margin contribution is variable based upon the products that we’re selling and as far as the actual 41%, that’s really a function of the mix of products that we sell in any quarter. I think we have said in the past, our history has been gross margins in the 40% to 45% range. We’ve been tracking at the lower end, 42% and 41% for a while now and we think that’s a reasonable range for the company.

Your next question comes from Ian Ing - Broadpoint. Ian Ing - Broadpoint: Over on the PC side, could you summarize any of the differences between the customers served, typically the turns business versus served by shipments from backlog? I assume these are typically leading OEMs and what gives you some confidence that share shifts are not occurring in that area?

So, with the market share position we have in the notebook space at the roughly two/thirds of the market, the customers we service are all the customers you know about, all the major OEMs in the market and so our business is totally reflective of that. We are in our tracking of our shipments, tracking of the products that we are in, we follow that very closely and obviously we track our design wins and losses very closely everyday of the quarter and we have seen no shift in any of the competitive landscape there. We view our performance in December although a bit lower than we had expected to still be quite strong and reflective of that strong market position and really if you go back into our September quarter, you may recall that we had over delivered on the top line and that was really coming out of notebooks. So you look at it over that period of time, we posted some really good numbers for that category. Ian Ing - Broadpoint: Then in TouchPads, my follow up is historically you have competed with ALPS there’s talk of some new entrants coming in. Could you talk more about your existing patent portfolio and blocking IP and how that plays out overtime. I believe a lot of your patents were from the early 90s?

You’re right. We have a very, very strong IP and patent portfolio, both issued and pending, in the category and that’s at the physical level as well as the usage model level, I might add and that has been a very strong point for the company. The competitors we see in the market continue to be ALPS primarily and secondarily, smaller companies like Elantech. Our patent expiration dates string out over a long period of time and yes, there are some that were issued in the 90s, but our whole value proposition in this market is to continue to push the innovation envelope as demonstrated by the most recent introduction of Scrybe and we see ourselves continuing to outpace the market and the value proposition in the products that we offer.

Your next question comes from Rob Stone - Cowen & Co. Rob Stone - Cowen & Co.: A question for Tom, as you think about the notebook TouchPad or notebook overall product mix going forward, in the last year you have been seeing a declining revenue per unit trend, not necessarily on ASPs, but because of the shift towards netbooks and the shift away from multimedia controls. Looking out into calendar 2010, do you see the opportunity for larger format TouchPads to accommodate gestures, multi finger gestures, and ClickPad’s perhaps reversing this trend or at least more stabilizing the revenue per unit?

Thanks, Rob and I guess the short answer is yes and yes. You’re right, through the past number of quarters, most of the relative strength in the category in TouchPads has been on the consumer side and of course double-clicking on that, a lot of the growth in consumers was netbooks and we definitely held our own in that market, but, yes, as we go forward. I mentioned in the prepared remarks that about 60% of what we’re shipping today are multi finger enabled and as the OEMs are able to upgrade their hardware itself, the actual physical boxes these things go into that would lend itself to larger TouchPads, which generally directionally would have a bit higher ASPs. Then the second is as you mentioned ClickPad which we just started shipments over the past quarter, still low single digits. We expect that to increase pretty substantially over the coming year and those generally do carry higher ASPs. So, we think we’re well positioned in that space. Rob Stone - Cowen & Co.: With respect to that same type of mix analysis on handsets, did you mentioned that the past year was sort of a transition year-on-year as the volume goes up, both the price and the cost is coming down. Would you expect that trend to continue at the same kind of pace this year or is the curve flattening out a bit in terms of average revenue per unit on the handset side?

So, it really when we’re talking about this, we’re talking about the module side of the business primarily and we do as I mentioned expect costs and prices to continue to come down, perhaps not at the same rate as we saw over the past four to six quarters, but still directionally down and the other thing I would mention just going back to the questions you had on notebooks. One of the key drivers that we think could be positive for the company, and it’s not really factored into our guidance in anyway in this fiscal year, is that corporate commercial side of the notebook house. Windows 7 continues to get good reviews and if there is a corporate upgrade cycle that would definitely be beneficial to the company as well.

Your next question comes from Blayne Curtis - Jefferies. Blayne Curtis - Jefferies: Tom, I’m trying to understand the PC business in Q4 December quarter. You were pretty flat there. The notebook builds were pretty strong, up 10% to 15%. Particularly in December the builds continued to be strong. So one, I was trying to figure out why you didn’t see some of that outside and then two, kind of taking a longer view, if you look at calendar year ‘09, ex-media VARS, your PC business was still down. Notebook builds were actually strong, up 20% to 25%. You had that mix to the multi finger going on then, you gained some share. You’ve talked about ASP erosion being fairly small. I wonder if you could just reconcile all of that.

First of all, let me start at the end of your question on calendar ‘09 performance in notebooks. Actually, when you take out the multimedia control applications compared to the previous year, we had actually grown our TouchPad revenue and so the bulk of the headwind vis-a-vis that year-on-year compare definitely was multimedia control VARS and we’re very, very confident with those numbers that we posted. In terms of the builds that you had mentioned, in the current quarter and September, we did see, as I had mentioned, very strong demand toward the tail end of our fiscal Q3 September. We did deliver a very strong notebook growth in the Q3 quarter driven by that surge in September and of course we sell into the ODMs, palm rest vendors we sell into different stages of the supply chain, of their supply chain based on the actual company we are dealing with. So the sell in sell out can be different based on the models we are shipping into and the customers we are shipping to and that’s what I think explains the bulk of why we didn’t see the incrementally higher growth on September and December. Blayne Curtis - Jefferies: Okay and the second question, the digital entertainment business has been pretty volatile for you. It’s been down; normal seasonality is hard to tag. It’s been down 40%, 70%. So that business is going to be down greater than seasonal. I was wondering if you could give me a little clarity there. As for the other businesses, do you expect them to be up or down in Q1 and then you lowered the full year guidance to the bottom of the range. It still leaves a pretty big sequential for June, so could you talk about some of the factors that give you confidence you will see that increase in June?

Sure, so first on the personal digital entertainment business, you’re right. That is pretty volatile for us and as you know, we don’t build our business around that part of our product lineup. We treat it as opportunistic. There has been a lot of volatility there. I would say in the context of the March quarter, the loading that we had going into the quarter out of December was quite a bit lower then we would historically have expected and when we went into the December quarter we thought could be. So we’ll see how that plays out visibility for us in that space is limited and we are just factoring in the forecast that we are getting in the present in that category. In terms of the June quarter, again it’s factoring in the products that we’re shipping, the forecast that we’ve got and new products that we will be bringing to market in both the handset as well as the notebook area. For our business, our fiscal Q3 of the March quarter is generally seasonally lower than the December quarter as you would expect. That’s factored in and at the end of the day we’re just very happy to be back into a double digit growth rate for the second half of our fiscal year.

Your next question comes from John Vinh - Collins Stewart. John Vinh - Collins Stewart: Hi, just wanted to follow up. I don’t want to beat a dead horse on the PC front, but maybe what could just some light on the results for PC in the quarter. Can you its maybe talk about order linearity in the quarter is it typically linear or is typically a little bit more lumpy and what are your expectations for the March quarter for PC notebooks in terms of order linearity there?

I don’t think we’ve seen from an order linearity standpoint, as Tom mentioned, we ended the September quarter with pretty healthy shipments and when we baked in the guidance, we were looking for the track seasonal trends. I think as we got further into the quarter, the turns business just didn’t seem quite as strong as we had expected. I think it really is the, as Tom reiterated, the sell in versus the sell out between September and December quarters.

The only other thing color I would add there, John, is just if you look at our ending backlog which of course reflects primarily notebooks and handsets, the mobile touchscreens, $58 million is over 50% of a loading for the March quarter which is right where it needs to be. Historically we have been 40% to 60%. So we feel pretty comfortable with the numbers that we’re guiding to base on that backlog. John Vinh - Collins Stewart: Typically, what are your typical turn assumptions for PC notebooks in any given quarter?

What we’ve said I mean for all of our products basically, our lead times are typically four to six weeks.

For us, it’s very simple. If we’re booked at 40% to 60% entering the quarter, the turn’s business on average is the flip of that, 60% to 40%.

Your next question comes from Rajvindra Gill - Needham & Co. Rajvindra Gill - Needham & Co.: Just to follow up on the guidance for March, could you talk a little bit about what your expectations are for the notebook business going into the March quarter. Do you expect to see the same timing issues that you saw in the December quarter and based on the actual numbers in the portal media player business, it reflect a massive step down in March. How do you see the mobile phone business going into the March quarter and what are you seeing in terms of competitive dynamics in pricing in March?

Again, Raj we don’t really breakdown from a guidance perspective the detailed category numbers there, but what I can say is that for notebooks seasonally, the March quarter is lower than the December quarter and we expect that to be true as well for the mobile space as we learn and experience this business. In terms of the pricing dynamics in mobile relative to the March quarter, as I referred to earlier, we don’t see a lot of change there. A lot of what we’re shipping in the March quarter is product that we have shipped in the previous quarter and then new products that have already been won that are planning to ramp in the quarter and aside from the commentary that I had on the module side of the business where every new design we introduced to the market, we are passing along to the end customer lower pricing due to lower materials costs. Aside from that, it’s pretty stable and rational. Rajvindra Gill - Needham & Co.: Right, but could you describe a little bit about what’s going on in terms of the fulfillment models, now that you have been doing this, being that you’re in the mobile business for almost over a year are you seeing more a shift more to chip solutions or some sort of chip flextail with some of the new handsets that are coming out or are you still kind of reiterating that there’s a healthy balance between flextail and module and chip?

Yes, Raj, absolutely. We continue to see a healthy balance in the present and that is comprehended in our March guidance as well. We still continue to see customers engaged with us, even the same account in multiple levels in different fulfillment models and we don’t really see that changing overtime. We see that as one of the strengths of our company. That’s one of the unique value propositions we bring to the market. As far as we know, we are the only player in the market that can satisfy all of the customer needs out there and that’s how we positioned the company.

Your next question comes from Jeff Schreiner - Capstone Investments Jeff Schreiner - Capstone Investments: Tom, I want to understand, just going back to a prior question kind of about the guidance here. We just heard from Kathy that as you got into December quarter, you found out that maybe turns were not going to be as strong perhaps as you had thought that they were. Could you help us understand what improvements in the visibility you guys have now seen regarding your turns business, because it seems like turns business is still a little bit slow in the March quarter. So I’m just trying to understand where the visibility is really coming from for June for the big step up you’re going to need based on the guidance provided.

We are already in week four of the quarter, so of course our guidance includes not just the exit load that we had last quarter and the forecast, but also our current load, but in terms of the June quarter, a lot of that of course is the back of mobile and on the back of new designs that we anticipate ramping in that period of time. Jeff Schreiner - Capstone Investments: Just as my follow up, the ClickPad seems interesting and was just trying to understand. Tom, is this a product that could be maybe outside the corporate ASP range or does it fall within the typical maybe $4 to $6 or $2 to $6 ASP range for the company’s product?

It would still fall within that range that we have communicated, but of course it is, since it does include additional functionality, on a like-to-like basis, a ClickPad to a TouchPad, the ASPs are higher than a traditional TouchPad.

Your next question comes from Lauren Stoller - Lazard Capital Markets. Lauren Stoller - Lazard Capital Markets: So you guys mentioned that you are in the Barnes & Noble Nook and the Alex e-reader. Did I catch that correctly?

Yes, that’s correct. Those are two of the e-readers we were able to comment on. Lauren Stoller - Lazard Capital Markets: So was that a ClickPad design? It’s not the full touchscreen is it?

What it is, if you are familiar with those form factors let me just talk about the notebooks there’s the main grayscale reading panel there and then there’s a color LCD underneath where a lot of the gesturing happens. We are in those secondary color displays. That’s what we’re selling into there. Lauren Stoller - Lazard Capital Markets: Then I believe in the past you guys had mentioned that you would be out with a larger form faster touchscreen in the first calendar quarter. Was that correct? Is that still the goal by March?

Yes, what we mentioned as we’d be sampling our technology in the first calendar quarter and we would remain on track with our offering there and relative to material revenue, that is we have always characterized that as FY ‘11 revenue. Lauren Stoller - Lazard Capital Markets: Then just one more quick question. Would you be willing to breakout the mix between chip sales and full modules?

No.

Your next question comes from Paul Coster - JP Morgan Paul Coster - JP Morgan: The first question I have got, Tom, is the Scrybe and Fuse products that were demonstrated at CES, can they contribute to fiscal year ‘10 revenues?

Great question, Paul, and thanks for stopping by there. So, the relative to fiscal ‘10, the short answer to that is no and the reason is the Scrybe we are offering is yet another one of our innovative features as part of our standard driver that ship with the TouchPad. So from our perspective, it’s a way to continue to lead the market and increase the gap between us and the other guys. That are competing for business with us and that’s how we position that and then in terms of the Fuse concept phone, think of those as our really our outbound marketing where we demonstrate those kind of innovative technologies to our customers, to the OEMs, and then start working with them on real devices that would deploy one or more of those concepts that you saw demonstrated in Fuse. So we would expect to see those kinds of concepts in phones, not in the three to six month period, but beyond that. Paul Coster - JP Morgan: Then in the end of your prepared remarks, you said that its will be at double digit growth in the second half of this fiscal year and that you expect to get back to historical growth rates with sort of normal demand. Now historical growth rates were in excess of 30% for two or three years there and do you think that is the kind of level you can get to and if so, does this sort of mean sort of constant steady state mix of modules versus chips and the ASPs stabilize or do a number of good things have to happen for that to come about?

I think, Paul, first the way to look at it is if you look at the company’s CAGR since we went public, it’s been in the 20% to 25% range not north of 30. So, when we talk about historical growth, we are referring to that number first and foremost, but yet we think the market opportunities are there as I think I mentioned earlier believe it or not, we continue to be design constrained relative to all the opportunities across all the various sectors in the market. So we think the market is going to be there. We think our investment in our product portfolio and the different applications that we’re genie that product for are going to be highly relevant to those evolving applications and new categories. We expect to play in a big way in those markets and you know as the markets develop, we have every reason to believe that we will be in that same CAGR range as we historically we have been as a company.

Your next question comes from Vijay Rakesh - Thinkequity. Vijay Rakesh - Thinkequity: Just looking at the December quarter, besides PC that was flat, it looks like the handset, the mobile revenues and get these numbers, was flat also and I think mobile was pretty strong should have been strong in Q4, right?

The mobile revenues on a sequential basis were up substantially. So, the total non-PC segment of the business on a sequential basis was up 33% and mobile revenue was 31% of total revenue compared with 29% in the prior quarter on a much larger base of revenue in the December quarter.

Vijay, we actually feel pretty good about posting that kind of sequential growth in mobile because remember, it’s not just a larger revenue base, but it’s also with the dynamic I have been talking about in terms of module pricing for the new modules that we are selling. Vijay Rakesh - Thinkequity: Just looking at the March quarter here, not to beat a dead horse again, but when you look at the guidance down 18% sequentially and I think the notebooks are barely down 8% looking in that guidance, I think touch itself is growing. I was wondering what gives on the guidance there?

Again, we’ve commented, Vijay on the fact that our loading for our personal digital entertainment category is softer than what we had expected a quarter ago and that is reflected in our guidance range and that of course for PCs overall, seasonally the March quarter is a down quarter versus December as well as mobile and again, our view is that relative to the second half of our fiscal year, we are very happy to be flashing numbers here to get us back to a mid teens growth rate. We think is very good in this market.

Your next question comes from Anthony Stoss - Craig-Hallum. Anthony Stoss - Craig-Hallum: Most of my questions were answered other than on the e-book and tablet side. Is it fair to assume that your gross margins would be above your corporate target?

The way we are looking at that business as we look at all businesses is capacitive technology is a horizontal technology that fits within many applications and verticals and we are managing that in the same way in the e-book space as we are in every other category that we are selling into and the only further commentary is in terms of gross margin ranges, there are ranges product-by-product. It’s a function of many factors and as a company, as Kathy mentioned before, our target model for gross margin for the company remains the same and we manage the mix accordingly. Anthony Stoss - Craig-Hallum: Lastly, also the number of handsets, that you are currently shipping in the quarter?

Yes, I think we talked about it a bit, but we are still in the September quarter where we popped out of the 15 to 20 range and into the 20 to 25 range. We are still in the 20 to 25 range in the December quarter. Overtime of course, our strategy is to continue to grow the number of SKUs. Handset for us continues to be a pretty volatile business in terms of forecasts and what have you. So, our basic strategy for dealing with that is just like in notebooks, increasing the number of SKUs that we’re selling into overtime.

Your final question comes from Yair Reiner - Oppenheimer & Co. Yair Reiner - Oppenheimer & Co.: My question is on IP. We have seen some of the big guns in mobile, specifically Apple and Nokia, kind of come to blows over IP related to touch. We have yet to see any of the vendors like yourself issue any lawsuits. What is the reason for that and do you think that it’s liable to change over the coming months?

As I said, I think the industry and our customers know we have very strong IP. In the human interface area, we’ve been a pure play in this space for much longer than anybody else and our IP portfolio represents and reflects that. There are as you talked about, some giants going after each other. We track that data very closely, but beyond that, we can’t really comment on what we’re doing on their IP front and we can’t go into specifics about our own company’s plans there.

Ladies and gentlemen, that does conclude our question-and-answer session for today. I’d now like to turn it back over to management. Please go ahead.

Yes, thank you for being on the call with us today. We look forward to seeing you on the road and updating you again on our next earnings call. Thank you much.

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.