Jennifer Jarman – The Blueshirt Group Rick Bergman – President and Chief Executive Officer Kathleen Bayless – Senior Vice President, Chief Financial Officer, Secretary, and Treasurer

Kevin E. Cassidy – Stifel, Nicolaus & Co., Inc. Rob W. Stone – Cowen & Co. LLC John N. Vinh – Pacific Crest Securities LLC Anthony J. Stoss – Craig-Hallum Capital Group LLC Daniel L. Amir – Lazard Capital Markets LLC Raji S. Gill – Needham & Co. LLC Paul Coster – JPMorgan Securities LLC Darice Liu – National Securities Corp. Liwen Zhang – Blaylock Robert Van LLC Shaw Wu – Sterne, Agee & Leach, Inc.

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Synaptics’ Second Quarter 2013 Earnings Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator Instructions) This conference is being recorded today, Thursday, January 24, 2013. And I would now like to turn the conference over to Jennifer Jarman of The Blueshirt Group. Please go ahead.

Thank you, operator. Good afternoon, and thank you for joining us today on Synaptics’ second quarter fiscal 2013 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 Rick Bergman, President and CEO and Kathy Bayless, CFO. In addition to the Company’s GAAP results, management will also provide supplementary results on a non-GAAP basis, which exclude share-based compensation charges and certain non-cash other or non-recurring items. Please refer to the press release issued after 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, including but not limited to, statements regarding the Company’s future financial performance and outlook, including financial guidance for the third quarter of fiscal 2013, anticipated growth in mobile product revenue for the third quarter, the Company’s expectation is year-over-year top line growth in the third quarter. The Company’s expectations that a number of designs in its pipeline will launch over the course of calendar 2013 including the growth of display integration solutions, expectations of design wins in market with ForcePad and ThinTouch later in calendar 2013, the Company’s expectation of the ultrabook share of the notebook market in 2014, expectations that Windows 8 notebook touchscreens using the Company’s product solutions will begin shipping in key OEM products in the next few months and the Company’s belief that it has a very strong technology roadmap and market leadership in display integration that will be pivotal within the next the generation of products. 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, 2012 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. I will now turn the call over to Rick Bergman. Rick?

Thanks, Jennifer. Synaptics delivered strong results for the December quarter, as revenue of $143 million exceeded the high end of the guidance range we provided last quarter. Our topline results reflect better than anticipated revenue for mobile phone, touchscreen applications partially offset by lower than expected PC revenue. As a result of the revenue mix, our gross margin performance exceeded our expectations as non-GAAP gross margin was 48.4%. We delivered strong non-GAAP net income of $17.7 million or $0.53 per diluted share also above the high end of our guidance range. Synaptics do a strong audience at the recent Consumer Electronics Show where we reinforced the progress we made across our key goals for calendar year 2012, and demonstrated our vision for 2013 and beyond. During this past calendar year, we achieved growth across several of our key markets, furthered our technology leadership and differentiation and continued our focus to remain the number one human interface company. As we move into 2013, our expertise across our strategic roadmap positions us to continue to excel at the premier touch provider in the industry. Topline growth would stand out a key priority for fiscal ’13, and we look forward to an expected return to year-over-year growth in the fiscal third quarter. Today, I’m going to update you on our core markets. I’ll then turn the call over to Kathy to review our second quarter results in more detail, and to provide our current outlook before opening up the call to your questions. Let’s start with the mobile market, which continued to show incredible growth. The latest projection from IHS Research in November shows the smartphone market hitting 660 million units in 2012. Based on a 22% CAGR, the market is expected to achieve over billion pounds in two years. Synaptics is the clear technology leader in mobile and we have garnered the latest flagship design in the market across our global customer base. These include the Google Nexus 4 from LG, new phones from HTC including Verizon’s Droid DNA, several new phones announced at CES from Huawei including the Ascend with Magic Touch. The Nokia Lumia phones with super-sensitive touch, the Sony Xperia T featured in the new James Bond movie and hot new phones from Lenovo and Sharp. In addition, we are pleased to have broadened our design win base within Samsung with our first smartphone in several years, the Galaxy Music, which is available today. As I talked about last quarter, China is a major segment of the smartphone market representing almost a third of all units. Domestic OEMs account for 60% of these units and Synaptics continues to maintain a leadership position with the major domestic OEMs including Lenovo, Huawei, ZTE and Coolpad. Moving to a discussion of display integration, we continue to be bullish on this trend. We have a number of designs in the pipeline expected to launch over the course of calendar ‘13, which include the aggressive display integration solutions. The range of designs will not only deliver thinner phones with better optical clarity, as with the few In-Cell models available today, but a range of solutions targeting the value as well as premium segments in the market. We expect Synaptics will continue to be at the forefront of display integration with innovative On-Cell, In-Cell in our most advanced TDDI touch and display solutions in the market. Turning to the PC market, rigorous design momentum continues for our TouchPad and keyboard product lines. Our demos at CES include a prototype of our new ForcePad and ThinTouch keyboard solution. There is significant interest in both of these products with major OEMs, and we continue to expect to have design wins in market later in the calendar year. Innovations like ForcePad help Synaptics remain ahead of the competition by combining the latest technology backed by our design tools, and system level engineering expertise. We’re already sampling the next generation ForcePad OEMs, which will enable much thinner notebooks. ThinTough expands our market opportunity within the notebook bill of material by providing an integrated keyboard tech solution with our TouchPad and ClearPad solutions. Additionally, a large portion of tablet buyers are demanding access to a superior keyboard experience to help with a content creation and productivity applications like Microsoft Office, other areas where we expect ThinTouch and large TouchPads will come into play. As you know, the notebook market continues to be weak and industry analyst that scale back projections for growth this year to mid single-digit following a disappointing 2012. Ultrabooks remain a bright spot however and we continue to expect ultrabooks to reach 35% of the notebook market in 2012. I’m pleased to report that Synaptics’ TouchPad family of solutions is currently incorporated in seven of the top 10 ultrabooks according to PC magazine. Recently launched ultrabook models include Lenovo’s Yoga, 11-inch convertible for Windows RT and HP ENVY x2, of which I’ll first review our comments. Window 8 focused on Gestures has made the track pad even more important. Along these lines, we are also working with major OEMs and peripheral manufacturers on external trackpads. Synaptics now shifts touch capable mice and external ClickPads from Logitech, HP and Dell. We expect this segment to continue to grow as touch capable devices are required to deliver the full Windows 8 experience for Desktop and all-in-one PCs. I think it’s important to point out that the market expectations for touchscreen enabled notebooks have dramatically shifted upwards. IDT’s projections for notebooks with touch is now 25% of the unit shipments by 2014. The fact is that Windows 8 demand touch, and more specifically touchscreens within an exploding array of new form factors including ultrabooks, hybrids convertibles, sliders and detachables. Synaptics has an excellent product line, our design pipeline is building and we have established a firm pathway towards providing the right high performance, cost optimized solutions to drive the adoption of large touchscreens and notebooks in even larger surface areas. In looking more specifically at the tablet, or large touchscreen market, tablets grew past 100 million units last year, and combined with large touchscreens and notebooks is expected to see 200 million units in 2013, and close to 300 million units the following year. As I said in the past, this is a Greenfield opportunity for us. We’re taking our leadership in touch technology as well as our display integration knowledge, and our attacking this market. Volume on our recent success with the Samsung Galaxy Tab2, I am pleased to report that we’ve added Windows 8 based Razer Edge 10.1 inch gaming tablet to our growing number of design wins, with a range of best of CES awards, the Edge was reviewed by CNET, noting that it surprises and impresses more than we even expected. The Edge will be available in market this quarter. In addition, we expect Windows 8 notebook touchscreens powered by Synaptics to begin shipping in key OEM products within the next few months. To wrap up my remarks, two underlying factors remain fundamental to our industry, the first is that increasing end-user experiences are raising the bar in human interface solutions, and the second is the demand for lower power thinness and quality of a touch experience is unrelenting. Keeping these in mind, it’s important to note that Synaptics clearly separated itself from competition in calendar 2012. No other supplier can demonstrate the technology portfolio, aggressive design wins, and future path of innovation and development of Synaptics. And we believe this technology lead will become even more apparent in 2013. Then only we do have a product line up, that is driving growth across our key markets today but a very strong roadmap including ongoing market leadership in display integration that we believe will be pivotal within the next generation of products. With that, I’ll turn it over to Kathy for a review of our financial results.

Thanks, Rick. As Rick mentioned, revenue was $143 million for the December quarter, a 13% sequential increase exceeding our guidance range, the revenue mix from mobile and PC product was approximately 57% and 43% respectively. Revenue from mobile products was better than anticipated, up 4% year-over-year, and up 26% from the September quarter, consisting predominantly of revenue from mobile phone applications. We achieved strong mobile phone unit growth over both comparable periods and tablets were solely contributor reflected our inclusion in the Samsung Galaxy Tab2. PC revenue was below our expectations, down 8% from the prior year and 2% sequentially, primarily reflecting the continued softness in the PC market. Synaptics continues to lead the market for notebooks, TouchPads, and ClickPads, and design activity remains very strong. With a continued momentum in ultrabooks this quarter, ClickPads were around 20% of our TouchPad unit shipment. Our non-GAAP gross margin of 48.4% improved 100 basis points year-over-year, and 50 basis points from the September quarter as a result of the beneficial mobile product mix, exceeding our expectations and guidance range. Our non-GAAP operating expenses were $45.5 million, up $2 million from the prior quarter. The increase was primarily employee related and included a fourth quarter of employee and other costs associated with the acquisitions of the Video Display operation of IDT, completed in early August. As noted last quarter, the Video Display acquisition combined with the acquisition related to our ThinTouch product has added approximately $3 million to $4 million to quarterly operating expenses beginning last quarter. In the December quarter, GAAP operating expenses were $54.1 million, including $7.8 million of non-cash share based compensation as well as a non-cash charge of $837,000 for intangible amortization and change to contingent consideration. The strong sequential increase in revenue and growth margin dollars in the December quarter to over 37% increase in non-GAAP operating profit dollars, and increased our operating margin to 16.6% from 13.6% last quarter. Our non-GAAP tax rate was 26.3% in the December quarter compared with 27.4% for the September quarter, primarily reflecting our geographic profit mix and no benefit of the research credit, which was reinstated after our quarter end. Our GAAP tax rate was 26.6%. December quarter non-GAAP net income increased 39% over the prior quarter to $17.7 million or $0.53 per diluted share. Turning to our balance sheet, we ended the quarter with $292 million of cash, down $21 million from September. Cash flow from operations was $15.3 million, offset by $28.7 million used for the repurchase of over 1.1 million shares of our common stock or 3.5% of our shares outstanding, and $5 million used for ThinTouch initial earn-out statement. Depreciation was $2.4 million for the quarter. receivables at the end of the quarter were $99 million reflecting 62 days of sales outstanding. Inventories at the end of December were $32 million with inventory turns remaining at $9 million. Now, I will make a few comments regarding our quarterly outlook. Looking ahead to the March quarter, we continue to monitor market dynamics and the impacts of sell-through levels during the recent holiday period. Based on our backlog of approximately $79 million entering the quarter, customer forecast and expected product mix, we anticipate revenue will be in the range of $140 million to $148 million, representing a 6% to 12% topline growth year-over-year. We expect mobile to be the primary growth driver as our solutions continued to shift into many of the leading flagship smartphones in the market. Taking into account, our overall product revenue mix, we expect non-GAAP gross margins for the March quarter to be around 47% to 48%. We expect non-GAAP operating expenses in the March quarter to be up from the December quarter, primarily reflecting incremental infield customary engineering support and chip design engineering to support our expanding product portfolio. We expect the FAS 123R charge in the March quarter to be in the range of $8.2 million to $8.4 million. GAAP expenses will also include a non-cash charge of approximately $500,000 related to intangible amortization and change to contingent consideration. We anticipate our non-GAAP tax rate for the March quarter will be on the high teens down from the December quarter as a result of the retroactive reinstatement of the federal research credit. We expect our tax rate for the fiscal year to be in the mid-20, reflecting our anticipated geographic profit mix, and the benefit of the reinstated research credit. Non-GAAP net income per diluted share for the March quarter was anticipated to be in the range of $0.50 to $0.58 per share. In closing, we are pleased with our performance in the first half of fiscal 2013, as well as our expectation for a return to year-over-year topline growth in fiscal Q3. Synaptics has paved the way to capitalize on significant incremental growth opportunities and we believe we are very well positioned within our market based upon our current product portfolio, and expanding product innovations moving forward. With that we’ll turn the call over to the operator, to start the Q&A. Operator?

Thank you. (Operator Instructions) Our first question comes from the line of Kevin Cassidy with Stifel Nicolaus. Please go ahead. Kevin E. Cassidy – Stifel, Nicolaus & Co., Inc.: Thank you very much for taking my question and congratulations on the great results, great outlook.

Thank you. Kevin E. Cassidy – Stifel, Nicolaus & Co., Inc.: When we are looking at the outlook the mobile growth, it seems that the first quarter is typically a weak quarter for mobile, is it that you’re in new phones or is it certain models that are selling better?

We characterize it as both Kevin, obviously you saw the array of phones that we are that are being launched at CES. And these high end smartphone’s are certainly selling really well, that we enjoy them some great design win, as well as being in the right phones. Kevin E. Cassidy – Stifel, Nicolaus & Co., Inc.: Okay, and the gross margin, it seems this is above your target range for your model. Do you think you’ll be updating that or do you think as the PC market comes back that the gross margins will come back into your normal range?

Yeah. our gross margin has been performing very well over the last, especially over the last quarter or two. so we’ve had a very nice mix of products amongst the entire product base, and it’s always based upon the actual number of views and the different product shipping in the market. so we do expect that the gross margin range would be in the 45% to 75% range, as we’ve talked about over the near-term and we think again, next quarter with the mobile mix that 47% to 48% is quite reasonable feel for that quarter? Kevin E. Cassidy – Stifel, Nicolaus & Co., Inc.: Okay, thank you.

Thank you. Our next question comes from the line of Rob Stone with Cowen & Company. Please go ahead. Rob W. Stone – Cowen & Co. LLC: Let me add my congratulations, very impressive results and strong outlook. My first question is on the PC segment, which was below your expectations and see to that, because of an industry trend, do you think that that was a function of mix, ASPs market share, can you give us any color on what may have been the weaker part?

Rob, I would actually characterize it as we are consistent with the market. when we gave our outlook in October, the analysts were a bit more bullish about what Q4 would land in the notebook area. obviously, it’s been disappointing to us and as you’ve heard over the last week or so, a few other suppliers in the notebook supply chain. So we didn’t really give up any grant at all in Q4 in some of the ASP and other trends that we’ve anticipated, played out as expected. So really, the one variable was the market wasn’t as big as we expected. Rob W. Stone – Cowen & Co. LLC: Okay. So related to that on the handset strings that seemed to be better than the market based on what we could measure, do you think that that was a function of share gains or what would you say about your mix from September to December?

We certainly benefited from a few skews that were higher volume than we expected in that case. The market was a little bit bigger, but not it’s a huge market, it’s a little bit bigger with a lot of units. but from our perspective, that was really, there are a couple of skews that we are in that just did really well and that allowed for the higher growth. And just the breadth of the solutions that we’re in, so as the market kind of grows, we’re well covered in that high-end smartphone segment, we have to enjoy that growth. Rob W. Stone – Cowen & Co. LLC: Okay. But you had spoken for several quarters previously about growth in low-end phones in emerging markets like China, and so forth, and I’m just wondering if in this very strong December quarter, what you actually saw is more of a rebound in the high-end part of your market?

That’s correct. Maybe, I didn’t say that quite clearly. but yes, clearly, there is a rebound in the higher end of the smartphone market. Rob W. Stone – Cowen & Co. LLC: Awesome, thank you.

By a number of suppliers. Rob W. Stone – Cowen & Co. LLC: Thanks very much.

Thank you. Our next question comes from the line of John Vinh with Pacific Crest Securities. Please go ahead. John N. Vinh – Pacific Crest Securities LLC: Hi, congratulations on the strong results and guidance.

Thank you. John N. Vinh – Pacific Crest Securities LLC: My question is when you said that some of the incremental growth that you’re seeing in the March quarter is due to new and existing smartphone programs, can you help us handicap, is most of the growth coming from new programs that you’re ramping or is some of that coming mostly from existing smartphone programs that you’re currently in today?

John, I just wanted to characterize a little bit, if you go back and look at the backlog, I mean the backlog is $79 million entering the quarter. so we’ve had a pretty strong backlog for the quarter, at least the strongest we’ve seen for several quarters and that’s across the board, and as Rick was talking before, he really – if you go back and look at it, really the strong line up of phones that we’re currently in. We also broadened our customer base. and so we’re shipping into many other premium flagship phones into the market, as well as there are some new phones that are coming.

Let me just look at CES is kind of characterizing our answer. The LG phones are certainly, have been announced in our kind of heart, so that’s kind of your first category that you characterized, but then Huawei had a lot of interest at CES, and they were three phones that we are in with Huawei phones. So it’s kind of that both answered that Kevin asked earlier. John N. Vinh – Pacific Crest Securities LLC: Okay. And then my follow-up is, if you look at your design win activity and your design win backlog for the first half of 2013, do you feel that you’ve got pretty good visibility there or are you also still waiting to hear back on some certain design decisions that are out there in the market?

I presume in that the case, you’re talking about smartphones. John N. Vinh – Pacific Crest Securities LLC: Yes.

So roughly 10 called large smartphone manufacturers out there that they have their own pace in decision-making. clearly, there’s some peaks in the industry. But we add this to continuing set of design wins that happen literally every week and every month of the year. So, I mean our technology breadth and leadership right now our design win pace is clearly picking up, which is allowing for us to grow, but that’s how I would characterize it. John N. Vinh – Pacific Crest Securities LLC: Okay. and then last question from me, and I’ll jump back in the queue. On some of these new wins in 2013, are you seeing some instances where there is dual sourcing on the tough controller’s side or are most of the skews that you’re designed into primarily a sole source?

So actually I think we talked a little bit about this at CES John, and kind of my answer continues to be the same. we don’t really see dual sourcing, a little bit of that was a couple of our smaller competitors were matched our P&L, but even in that case, it’s entirely different firmware and so on. So we don’t see were they the single phone or you can swap one controller for another controller, it’s just too much customization that occurs from an OEM or supplier perspective to be able to do that. So at this juncture, we don’t see that trend. John N. Vinh – Pacific Crest Securities LLC: Great, thank you.

Thank you. Our next question comes from the line Anthony Stoss with Craig-Hallum Capital Group. Please go ahead. Anthony J. Stoss – Craig-Hallum Capital Group LLC: Hi, guys my congrats also. Rick, how important has In-Cell or display integration been for you guys in terms of design that bring 2013, also if you wouldn’t mind talking about display integration and the fact that you believe this is going to have on gross margins. Same question on the ThinTouch side in terms of design wins and what impact that may have to gross margins? thanks.

Okay. So let’s touch on In-Cell first. as we’ve mentioned in calendar year ‘12, we saw the first In-Cell phones come out and then in ‘13, our expectation is over the course of the year, you would see a number of announcements, and as the technology continues to hold the promise that we’ve talked about allowing thinner phones with better optical characteristics, ultimately it’s longer term, it’s a better supply chain. So that’s clearly appealing to a number of the OEMs out there, and that certainly gives us an entry to have those discussions, because we are the clear leader in that particular space. So and what kind of mean for gross margins, it’s not going to be a light switch event. so I’d also caution that it will be a steady ramp over multiple years. and so impacting in the coming quarters margins in a major way, won’t have impact. We’re being a leader and technology, always puts you in a very interesting place and generally allows us to play in a little higher-end portion of the marketplace. From an overall perspective in the midterm, it certainly helps margin. On ThinTouch again, we are just entering that market. So we acquired Pacinian back in June and at that juncture, it was just a handful of individuals with a fantastic idea in some IT. And so we’ve gone and as you saw, we have now examples that are getting to better and better quality. So we expected to be more in fiscal year ‘14 impact. Keyboards are not just, and hence they will be at a lower margin models than our existing margin we announced today clearly, but in terms of how that impacts us, we’re not prepared to talk with any specific numbers at this point. Anthony J. Stoss – Craig-Hallum Capital Group LLC: Okay, great. Thanks.

Thank you. Our next question comes from the line of Daniel Amir with Lazard Capital Markets. Please go ahead. Daniel L. Amir – Lazard Capital Markets LLC: Yeah. Thanks a lot and congrats on the good quarter. A couple of questions here, first of all, on the China market, you mentioned that today by your estimates, China is responsible for about third of the smartphone units worldwide. Does that reflect your business as well in terms of exposure to China?

Daniel, I guess the way that I’d look at it is, we’ve been talking about, how much China is in our revenue base. We’ve had several questions about that over the last several quarters, and as we talked about our base is expanding, the unit volumes are expanding, we are well positioned at the top OEMs, we’re making a lot of progress at the second level of OEMs as we talked about today with new phones from Lenovo, OPhone, Coolpad, so we’re continuing to see increasing volumes there, and as we look at, from an overall portion of the business, it has been running around 10% of our overall revenue.

The caution is we don’t track sales out numbers, so for example, the Samsung phone that I mentioned, the Galaxy Music, we sell the Samsung and they sell that phone worldwide, how many end up in China in that market. We actually don’t really know, we guess – there is research is out there, that can sometimes shed some light on that, but in terms of really definitive data, it’s really hard to view or track that.

Yeah. So there is the domestic suppliers as well as Samsung is a big player in that market as well as Nokia. Daniel L. Amir – Lazard Capital Markets LLC: Now your 10% revenue comment is related to domestic China handsets basically.

Yeah, domesic. Daniel L. Amir – Lazard Capital Markets LLC: Okay, all right. The other question is just in terms of the margin guidance here for the March quarter, I mean it looks like what benefitted you here in December was higher mobile mix and it looks like that happening in March as well. So in a way, why wouldn’t margins even be potentially higher than what you’ve guided for just because of the mobile mix being better?

Yeah. Q2 was really good from a gross margin standpoint. So and again, it’s a combination of the mobile mix that we had in Q2, but also just across the board with the mix of products that are actually shipping. So we have a wide range of margins within the product portfolio that we fell and when we look at the Q3 mix then the forecast, 47% to 48% seem to be a right, about the right range. Daniel L. Amir – Lazard Capital Markets LLC: So, I mean is the mobile mix still the biggest impact on your gross margins or some of it is also your other product mixes here?

No it’s still mobile and again, mobile include, the definition around mobile includes the tablets spend as well as some of the video products. Daniel L. Amir – Lazard Capital Markets LLC: Okay, all right. Thanks a lot, I’ll get back in the queue. Thanks.

Thank you. Our next question comes from the line of Raji Gill with Needham & Co. Please go ahead. Raji S. Gill – Needham & Co. LLC: Yeah. Thanks and congrats as well, a question on the mobile side, the business grew at 26% sequentially, and it kind of represents fatigue in the mobile revenue, you haven’t really hit that number in quite some time. Just trying to get a better understanding of kind of the units in the ASPs in the mobile business, obviously you’ve gone to the model to chip-only transition. Could you maybe talk a little bit about pricing, what really drove the revenue growth sequentially, was it more just overwhelming number of units or was the pricing kind of update a bit and that helped the revenue growth in Q4?

Yes, most of the growth really is driven by the units, so as we’ve talked, I mean the launch around the flagship products across the wide range of the customer base and again, the majority of volume is chip based, we still have some fairly steady smaller volume of sale mix and the unit volumes. So it’s primarily unit mix, skews like few, we still see normal price erosion, but overall, with the blend of the product that we’re shipping in the market, it was a nice mix and a very strong unit growth. Raji S. Gill – Needham & Co. LLC: Okay. And on the guidance, mobile being the primary driver, that would imply mobile to be up 7% to 8%, something like that sequentially in a seasonally soft quarter, which is March. Could you describe why is your deviation in that quarter in terms of seasonality?

A deviation in seasonality, yeah, it just goes back, I think Rick already covered this, because a few different times on the call that it’s really a breadth of the customer base that we’re in. So I mean we’ve broaden our customer base, the flagship phones that we’re in right now, they’re shipping very well. within the customer base, there is also some new phones that are ramping all the time.

The short answer Raji is we’re gain share, right. The market is somewhere getting stronger in Q1 versus Q4, the share gain. Raji S. Gill – Needham & Co. LLC: Okay. And on the PC side of it, it looks like you’re not going to probably grow the PC business in fiscal year ‘13, so that March probably three fiscal years in which the PC business hasn’t grown. When should we start to see some sort of inflection point or this really get, all be driven out, just touch enabled notebooks, which will help to save that business for you?

Yeah, that’s correct. It’s been a flat business now, and unfortunately the notebook business during the same three fiscal years, it’s also been flat. So our performance has been very consistent with the notebook business, it’s not a surprise, given our relative share of that particular business. So where we could see a nice inflection point of course, is when the ThinTouch solutions come into play, and we’re just as excited about as was today, when you announced back in August got great reception at CES. We just got to continue to do our homework, and get the product ready to take the production, and get the design wins, and so on. But it will be a ramp as I discussed, which will kick in fiscal ‘14. Raji S. Gill – Needham & Co. LLC: Thank you.

Thank you. Our next question comes from the line of Paul Coster with JPMorgan. Please go ahead. Paul Coster – JPMorgan Securities LLC: Yes. Thanks very much. R&D is pretty elevated as the percentage of revenue, I think you spent 24%, and how do you see that changing over time, and what kind of operating model are you focused on ultimately, Rick?

Well, I’ll crack at it and then Kathy adding some words. I mean as you well know, since the day I started here I talked about topline growth, and that was the number one priority. Finally, starting to see the price of that here 15 months after I started with our guidance for Q3, and ultimately, that’s the way you make the percentages better and R&D is to continue to have that topline growth. We are investing in a lot of different areas right now with the prior question, I mentioned ThinTouch is one big investment, certainly what we’re doing on large screen displays, the display integration, all those relatively low revenue at this point that pretty high R&D as 2013, 2014 march forward, we expect some of those revenues to start kicking in and obviously offset the percent of R&D. I’ll let Kathy comment on the model we’re striving for.

Hi, Paul, yeah, so in the operating profits, I mean what we’ve talked about for operating profit model we started this year, we had the two acquisitions with the ThinTouch keyboard acquisition and the Video Products acquisition; so both of those acquisitions started to add, I mean they added $3 million to $4 million on a combined basis to our quarterly R&D run rate. And so that’s started in the September quarter, we had a full quarter in that expense in this quarter. So on a go-forward basis, I mean the rates, have increased to probably not quite as much on a quarter-on-quarter basis, but as Rick said, we’ve got this many initiatives going on from an operating margin standpoint again, really strong operating margin improvement quarter-on-quarter as a result of the revenue increase as well as gross margin dollar increase. So we started what we talked about this year was starting at the lower teens and as revenue grew, moving back to mid-teens, as revenue continues to grow moving a little farther up horizon to upper teens. Paul Coster – JPMorgan Securities LLC: Okay. And then regarding the ThinTouch and ForcePad products, what impacts do they have on ASPs and are they going to match the corporate average gross margin, and do you think both or either of those products can be material contributor in this fiscal year or this calendar year at least?

Yeah. Both of those are targeted for fiscal ‘14. So from a contribution standpoint, we’ll start seeing that kick in next year, and we do think one or both basically would be material to the business. Right now, I mean there is, we’re looking at those, they have a little bit higher ASPs, and what the traditional TouchPads, ClickPads are running, the margin profile is more in the module arena, which is low 40 maybe even lower than that. So below the corporate average right now, but strong good ASP, good gross margin dollars contribution. Paul Coster – JPMorgan Securities LLC: Thank you.

Thank you. Our next question comes from the line of Darice Liu with National Securities. Please go ahead. Darice Liu – National Securities Corp.: Good afternoon, nice quarter. I have two questions regarding the In-Cell technology, this morning (inaudible) earnings conference calls, the company talked about increased customer in terms of such products, but that In-Cell technology is currently limited to maximum size of about 70 inches. can you comment on advancing that technology beyond their current size limitation to address the margin how that market? And the second part of my question is regarding OLED displays, considering the OLED is pretty thinner already, because of its one pound structure. I was wondering if there’s any activity or interest in terms of moving OLED have an On-Cell technology to an In-Cell technology?

Okay. So I didn’t quite get the very beginning of your first question, I think you said somebody discussed, if you could just fill that in. Darice Liu – National Securities Corp.: This morning LG Display reported third quarter and management talked about touch technology on their conference call, and they talked about how customer interest is increasing, but that In-Cell technology had size limitation to about 70 inches, I was wondering whether or not, if they’re using comment on advancing that technology beyond the current size limitations to address the larger tablet market?

Okay. And then you talked about OLED with In-Cell. So I’ll take those in order. Part of that is the first question is a timing question, there is no doubt the immediate interest In-Cell was in the handheld smaller tablet space, as we look this year and even next year, but beyond that there is a lot of interest, and there’s really no limitations on In-Cell that want to buy two of those larger displays. Now you’re talking about much bigger pieces of glass, later generation fab, and yields certainly comes into play there. So those are all factors but now that’s like any other manufacturing technology, they get worked over time and solutions are found and the yields go up and so on. So the short answer is, now we expect In-Cell is ultimately prevailing large panels as well. On the OLED side, yeah it’s fairly thin technology, there is On-Cell technology there, are used with OLED today, that are quite competitive, and so on. But again, there’s opportunities to innovate with In-Cell there as well, I think everybody is trying to ramp, OLED there is one major supplier in OLED today, but there’s certainly others beginning their ramp. In over time, they will get In-Cell and other display integration technology they could have bought. Darice Liu – National Securities Corp.: Is there any type of technology obstacles for moving OLED from On-Cell to In-Cell?

I’m just thinking for a moment, if there’s any fundamental changes, nothing off the top of my head that would prevent moving to In-Cell. Darice Liu – National Securities Corp.: So are you seeing any type of activity right now in the market manufacturer to move from On-Cell to In-Cell to OLED?

That could be a little bit cautious, because they said there’s one major supplier. Darice Liu – National Securities Corp.: Yeah.

Yeah. I don’t want to disclose anything that might impact their business their own technology. That’s up to them to talk about it. So obviously we’re engaged in a variety of different display types, there are three major display types in the industry, we’re having discussions with all the manufacturers with In-Cell, On-Cell, TDDI and so on. Again, as I said with the earlier question, I think that would be a light switch, not only the whole markets going to switch over. It takes time to take this type of innovation and technology into the manufacturing line. Darice Liu – National Securities Corp.: Okay, fair enough. Thank you.

Thanks.

Thank you. Our next question comes from the line of Jeff (inaudible). Please go ahead.

Yes, congratulations on the quarter and beating seasonal December and March quarter, very nice there, I’d just want to circle back on something I’ve been bouncing between two calls, and I didn’t get it here all the information, China is certainly the growth driver in the smartphone industry at this point, there’s too many industry analysis, I was just trying to understand one expectations in terms of your overall units or revenue will be coming from China this year, and also what expectation for fiscal year ‘13 in terms of those from a shift are coming from maybe new engagements.

Well, we did talk about China a little bit in one of the other Q&As Jeff, and so China is, when you look at China, you’ve got the domestic phone carriers as well as a couple of the other larger OEMs that also sell into the China market. So when we look at what we’re doing right now, I mean we’re very well positioned with the top tier domestic phone companies within China, also we’re expanding our presence, shipping additional skews into Lenovo OPhone, Coolpad, and the second tier guys. I mean looking at other strategies for even the third, and beyond that there is a lot of China volume and other emerging country volume that’s also filled by with Nokia and also Samsung. So I mean we’re basically engaged in all of those areas, units are increasing, we feel really good about the progress in China.

And early today, a competitor suggested that in six quarters, the touch market will be monetized in thereon where ASP declines may begin to flow, but it becomes really in market share graph. How is an active view to the market at this point?

So we have a several year roadmap and as I go, visit our customers, we have no shortages of ideas that either enhance the capabilities are touch controllers or innovates around the total system costs and so on. So I don’t see a commoditization certainly a part of the market well, the very low-end, we have prices everything. but even there, we tried to find value in other ways. So I’m actually excited about the growing possibilities that that we have, I don’t see this turning into a peer price play in that timeframe.

And I believe there was some comment. and again, I apologize dancing back and forth between calls, but when should we expect Windows 8 touchscreen shipping with Synaptics inside, and will the company do the same as its competitors to our qualified and shifting at this time, will the company provide us, as we follow the company and others, how many devices you have qualified upon?

Certainly, as we said in our prepared remarks, we expect to see some OEM announcements over the coming months. we also mentioned, it’s got Greenfield opportunity for us to in terms of growth and so on, as we look forward. And from a technology perspective, we feel very well positioned Jeff, and certainly, there’s no secrets about who is passed qualification is actually a web page in the Microsoft Certification process. so you can look out any system. So we’ll shed light as soon as the OEMs kind of pass that process or their systems are fully announced in the marketplace.

Thank you. Our next question comes from the line of Liwen Zhang with Blaylock Robert Van LLC. Liwen Zhang – Blaylock Robert Van LLC: Thank you and congratulations as well. And my first question is based on your mix in your backlog. Can you give us some picture about the next before this quarter?

Hi, Liwen. As far as the backlog goes, it’s very strong backlog $79 million, 55% coverage, at the midpoint of the guidance range, while it’s still drilled down in there, it’s well represented between PC, mobile side of the business. and so it’s likely made out. Liwen Zhang – Blaylock Robert Van LLC: Yeah. but my question is actually is, the mix will be – like a mobile will go higher, how higher or likely to be given that…

As we’ve said in the guidance, we expect the most of the growth will be driven by the mobile business, and if you think about the backlog, typically the PC business puts in earlier than the mobile side of the business. so the lead times are a little bit longer for TouchPads and for the chip business. so there is a little more in the backlog right now in the PC side of the business than the mobile side of the business, just based on lead times and that’s normal. Liwen Zhang – Blaylock Robert Van LLC: Okay, thank you. And my next one is giving your strong footprint at OEMs and smartphone and handset phone overall market growth. and can you give us your mobile revenue outlook for this calendar year?

Yeah. Unfortunately, we’re not going to break that out at this point, because that would in effect give pretty good idea where Q4 would land. I mean the other thing at this point is, you were just reaffirming the guidance we gave for the fiscal year, which was modest growth, 1% to 9% over fiscal ‘12 and if you kind of do the math and kind of figure out where we are with that? Liwen Zhang – Blaylock Robert Van LLC: Okay, thank you.

Thank you. Our next question comes from the line of Shaw Wu with Sterne, Agee. Please go ahead. Shaw Wu – Sterne, Agee & Leach, Inc.: Okay, thanks. all my questions have been answered. Thanks.

Okay. Thanks, Shaw.

Thanks, Shaw.

Thank you. (Operator Instructions) Our next question is a follow-up question from the line of Kevin Cassidy with Stifel Nicolaus. Please go ahead. Kevin E. Cassidy – Stifel, Nicolaus & Co., Inc.: Yeah. Thanks for taking my follow-up. in your press release, to say, you’ve paid a $5 million earn-out for the ThinTouch, and I think that was based on customer acceptance, can you define what customer acceptance was and how many customers there were that accepted?

Sure. Kevin, yeah, it was related to your customer acceptance. And it was basically, specifically around the quality of the deliverable that we made to a single customer indicating, as a good indication of progress, I’m taking at the time of the acquisition, a technology and turning it into a product. So you saw the samples at CES and you can see, it’s now a prototype right, it’s not a technology idea, and that was really the spirit of the earn-out. Kevin E. Cassidy – Stifel, Nicolaus & Co., Inc.: Okay. So is this sooner than expected or about in line with what you’re expecting?

It’s pretty much right on target. Kevin E. Cassidy – Stifel, Nicolaus & Co., Inc.: Okay. great, thank you.

Thank you. Our next question is a follow-up question from the line of Rob Stone with Cowen & Co. Please go ahead. Rob W. Stone – Cowen & Co. LLC: Hi, Kathy, a couple of my data points, if you’re willing to share them with us. One is within the other category; you said it was mostly smartphones, handsets. can you give us a sense of how much of that business was other product?

Well, we’ve talked about the category in and of itself, right, it’s primarily the mobile phones, there’s also tablets and the video products are incorporated into it right now. So from a tablet standpoint, tablets grew nicely, I mean it’s still not material. so we’re not breaking it out for the video product. last quarter, we said it was a small contributor from the revenue standpoint, it continues to be a small and as we look at that business, really the primary activity there for the acquisition was incorporating that technology as your launch from a roadmap for large touchscreen, but there’s a small round of revenue there. Rob W. Stone – Cowen & Co. LLC: So you’re still looking for I guess, and I know you won’t give a specific breakdown, but I’m just trying to get sort of qualitative sense, the March quarter is driven then by handset primarily you’re not looking for a materially bigger contribution from those non-handset items, tablets and videos, chips in the March quarter?

Yeah. It’s primarily mobile phones, there’s tablets look good, so they may go up some too. Rob W. Stone – Cowen & Co. LLC: Okay, thank you.

Thank you. There are no further questions in the queue at this time. I would like to turn the conference back to management for any closing remarks.

Okay. Well, thank you very much. It’s an exciting quarter for us, and we’re certainly looking forward to you in the 2013 calendar year as well. We look forward to talking to you, the rest of you either next quarter or over the course of the next several months. Thank you very much.

Thank you. Ladies and gentlemen, that concludes the Synaptics’ second quarter 2013 earnings conference call. We thank you for your participation. You may now disconnect.