Ron Slaymaker - Vice President & Manager, Investor Relations Kevin P. March - Chief Financial Officer, Senior Vice President

Cody Acree - Stifel Nicolaus Adam Parker - Sanford Bernstein Glen Yeung - Citigroup Michael Masdea - Credit Suisse Chris Danely - J.P. Morgan David Wu - Global Crown Capital Tim Luke - Lehman Brothers Ross Seymore - Deutsche Bank Doug Freedman - American Technology Research, Inc. Chris Caso - Friedman, Billings, Ramsey Jim Covello - Goldman Sachs Uche Orji - UBS Sumit Dhanda - Banc of America Securities David Wong - A.G. Edwards

Good evening. My name is Mary and I will be your conference operator today. At this time, I would like to welcome everyone to the Texas Instruments fourth quarter 2006 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer period. (Operator Instructions) It is now my pleasure to turn the floor over to your host, Ron Slaymaker. Sir, you may begin your conference.

Good afternoon and thank you for joining our fourth quarter and 2006 earnings conference call. Kevin March, TI's Chief Financial Officer, is with me today. For any of you who missed the release, you can find it on our website at ti.com/ir. This call is being broadcast live over the web and can be accessed through TI's website. A replay will be available through the web. This call will include forward-looking statements that involve risk factors that could cause TI's results to differ materially from management’s current expectations. We encourage you to review the Safe Harbor statement contained in the earnings release published today, as well as TI's most recent SEC filings for a complete description. Our mid-quarter update to our outlook is scheduled this quarter for March 12th. We expect to narrow or adjust the revenue and earnings guidance ranges as appropriate with this update. We will observe a quiet period beginning on March 1st until the update. In this call, all of our financial results will be described for continuing operations, including historical comparisons, unless otherwise indicated. Also note that we have changed the name of our Educational and Productivity Solutions segment to Educational Technology. In today’s call, I will review our highlights of revenue performance, and then Kevin will discuss profit performance and the first quarter outlook. We will keep our remarks short, saving time for us to respond to your questions. Fourth quarter TI revenue of $3.46 billion declined 8% from the third quarter and grew 4% from a year ago. The sequential decline reflected a 5% decline in Semiconductor with the remainder resulting from the seasonal decline in graph and calculator sales. Semiconductor revenue was up 4% from a year ago. Revenue was in the upper half of the updated guidance range that we issued in December. The sequential decline in Semiconductor revenue was broad-based across products, although wireless was the single area that most significantly drove our Semiconductor revenue outside of its seasonal norm. Wireless revenue declined 10% sequentially and was down 2% from a year ago. Our Wireless revenue reflected what you have heard from others in this market, in that handset unit growth is skewed toward lower price, basic feature handsets. TI's 3G revenue declined 20% sequentially, although grew 7% from a year ago. The sequential decline in 3G units and revenue was broadly distributed across our customer base, as well as across digital base bands and OMAP application processors. Outside of 3G, units and revenue for wireless handsets increased, but not sufficiently to offset the decline in revenue associated with the higher price products that we sell into 3G handsets. In the fast-growing market for low-priced handsets, TI's position is very strong. Our single-chip product, named LoCosto, has taken this market by storm. The fourth quarter was our first full quarter of LoCosto production. We shipped more than 6 million LoCosto units in the quarter, and our customers have 12 handset models that are shipping based on the product today. This was the sharpest volume ramp of any new product we have introduced in our wireless history. We expect the volume ramp to continue through 2007 based on more than 50 handset models already underway across 15 different handset manufacturers. The device that is shipping today is based on 90-nanometer CMOS. We plan to begin sampling a 65-nanometer LoCosto device in the second quarter, a technology lead that is one to two process generations ahead of any competitor for a comparably integrated product. We will also be sampling a single-chip product in the first-half that will support the edge standard. This product, call eCosto, integrates the application processor and modem functions and is also based on TI's DRP, or digital RF processor, technology. It will also be manufactured in 65-nanometer technology. The overall handset market continues to be highly competitive. You have seen some TI customers publicly discuss plans to broaden their supplier base, resulting in speculation about potential share losses for TI. On the other hand, we have a widening set of opportunities, as handset manufacturers where TI has not historically been as connected similarly seek to broaden their own supplier base. Although there will always be pluses and minuses, the key to winning is simply that we must continue to win more customer programs, especially high-volume customer programs, than we lose. Our ultimate success will reflect the combination of technology, price and execution that we deliver compared to our competitors. We have worked hard over many years to build a strong market position across the range of handsets, from low-priced to 3G. In next generation technologies, such as WiMAX, we have development programs underway with the early market leaders. In short, in 2007, as well as the years ahead, we fully expect to keep our wireless position strong. Outside of wireless, our broader base of customers continues to squeeze inventory. In general, we are not aware of significant inventory excesses. However, customers continue to push these levels down as semiconductor devices are now more readily available. Total analog revenue declined 4% sequentially due to a broad-based decline in demand. Analog revenue grew 9% from a year ago, primarily due to high-performance analog products. High-performance analog revenue tracked down about 4% sequentially, although grew 22% from a year ago. Distributor resales of high-performance analog products also sequentially declined, a little more than TI sales into the channel, and we managed to replenish some of this inventory at distributors. The sales declines were broad-based, with no single product area or market disproportionately responsible for the sequential decline. We believe our sequential decline reflected trends in the overall high-performance analog market in the fourth quarter. Our sequential DSP revenue trends in the quarter closely tracked our wireless results, with total DSP revenue down 11%. DSP was down 2% from a year ago. In DLP products, fourth quarter revenue declined 5% sequentially and was about even with the year ago. The decline in TV products was similar to what we saw in 2005. We believe sell-through of DLP TVs was solid in the quarter and we believe customer and retail channel inventories are clean. Front projectors had a small sequential increase. Due to customer specific issues, we believe some channel inventory grew in the projector market and will likely be corrected in the first quarter. Also in the fourth quarter, we signed new patent license agreements to replace agreements that had previously expired. In total, royalties increased by $50 million sequentially. About $30 million of the increase was catch-up payments to cover the period between expiration of the prior agreements and signing of the new agreements. Of course, the catch-up payments will not be ongoing and we expect royalties to settle into a range of about $80 million to $90 million per quarter in 2007. Before I turn it over to Kevin, I would like to do a quick review of some performance highlights for the year in total. First, we have consistently described three net financial goals for TI. One was to grow revenue faster than our market. Although the semiconductor market numbers are not yet fully reported and finalized, I believe most expect the total semiconductor market growth to be a little over 9% for the year, with the non-memory market up less than 7%. Our revenue was up 16% for the year, handily outpacing the market. Next, we seek to grow earnings per share faster than our revenue growth. TI's EPS in 2006 grew 30%, almost twice the growth rate of our revenue. This reflected strong operating profit growth, up 32% for the year, as well as the impact of our share repurchases, which reduced the average annual diluted shares outstanding by about 7% compared with 2005. Finally, we seek to achieve the above two goals while also being efficient with our capital. In 2006, return on invested capital expanded to 21.5%, compared with 16.1% in 2005. Although we had many outstanding product line performances in the year, the area that contributed most significantly was our high-performance analog product line. High-performance analog revenue grew 33% in the year, and its gross margin helped raise the bar for the entire company. Our belief that analog will develop into the core financial engine for TI was further reinforced by these results. At this point, I will ask Kevin to review profitability and our outlook.

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IR firm sponsors transcript of micro-cap company: Consulting company sponsors company's transcript in sector of interest: Your company's name and promotion could have been on this transcript! Learn more, or email Zack Miller for details. Kevin P. March: Thanks, Ron, and good afternoon, everyone. TI's fourth quarter gross profit was $1.75 billion, and gross margin was 50.5% of revenue. Gross profit fell $184 million from the third quarter, due to the decline in Semiconductor revenue and a seasonal decline in Educational Technology revenue. We are pleased that gross margin held relatively stable against a sharp decline in revenue. Although gross margin declined less than a percentage point, most of this was associated with a seasonal decline in our calculator revenue. In our Semiconductor segment, gross margin declined less than a half a percentage point, despite an almost $200 million sequential drop in revenue. This performance reflects the benefit of our hybrid manufacturing strategy. Although we reduce our production, both internal and at foundries, to align with demand and to reduce our inventory, recall that our most costly production remains significantly outsourced to foundries. As a result, even though TI's internal factory utilization declined sharply in the quarter, most of the under-utilized assets are those where fixed cost depreciation levels are low. Gross margins also benefited from cost reduction actions that we undertook, such as shutting down numerous factories over the holiday and from the growth in royalties that Ron previously described. Operating expenses of $981 million declined $21 million sequentially. Most of the decline was due to seasonally lower pay and benefits, partly reflecting the holiday and vacation period. As we continue to challenge ourselves to operate at higher levels, we have decided to take a strategic action to increase our R&D efficiency by changing the way we develop advanced digital process technologies going forward. Historically, TI independently developed our process technologies and then worked with our foundry suppliers to align our processes with theirs. As the foundries have continued to increase their capabilities over the years, we have determined that we can eliminate this redundancy and more closely collaborate with them on process development. This is a natural extension of our current relationships with the foundries and allows us to more tightly focus our own R&D resources on product development, where we gain the most competitive advantage. Independent of this process R&D action, we will stop production at KFAB, one of our older 200-millimeter digital factories in Dallas, and move this production equipment into several of our analog factories to increase their output. Combined, these actions will result in a reduction of about 500 jobs and will produce about $200 million of annualized cost savings when completed. The actions will begin in the first quarter and should be mostly complete by the end of this year. The company will incur total restructuring charges of about $55 million with these actions, with these charges about evenly distributed over the four quarter of 2007. Operating profit for the quarter was $767 million, or 22.1% of revenue. Operating profit declined $163 million in the third quarter. Operating profit included stock-based compensation expense of $78 million, or 2.3% of revenue. Other income and expense was $70 million, up $15 million sequentially due to the settlement of all remaining matters related to the grants from the Italian Government regarding TI's former memory business operations. Income from continuing operations was $671 million, or $0.45 per share. This included about $0.05 of benefit from the reinstatement of the Federal Research Tax Credit, which was signed into law in December, 2006, and was retroactive to the beginning of the year. Accordingly, there was a cumulative catch-up in the fourth quarter to align our tax rate for the year. I will leave most of the cash flow and balance sheet items for you to review in the release. However, let me make just a few comments. Cash flow from operations was $846 million in the quarter, and we ended the year with $3.72 billion in total cash. In the fourth quarter, we used $1.13 billion of cash to repurchase 37 million shares of TI common stock. Our repurchase program has reduced TI's shares outstanding by 9% over the past year, and by 16% over the last two years. Inventory of $1.44 billion at the end of the year declined $54 million, as we sharply reduced production. Days of inventory at the end of the fourth quarter were 75, compared with 73 days at the end of the third quarter. As mentioned earlier, we intentionally reduced production loadings in the fourth quarter to help control inventory. Because of that, inventory should continue to fall during the early part of the first quarter. Current production starts have begun to build again, and overall utilization in first quarter is expected to be higher than it was in the fourth quarter. TI orders in the fourth quarter were $3.08 billion, a decline of 10% sequentially. Semiconductor orders were down 9%. Our semiconductor book-to-bill ratio was 0.89, down from 0.93 in the third quarter. As a result, in the first quarter, we expect total TI revenue to decline and to be in the range of $3.01 billion to $3.28 billion. Semiconductor revenue should be in the range of $2.95 billion to $3.20 billion. These ranges are equivalent to a sequential decline of 5% to 13% for TI and the semiconductor segment. Educational Technology should be in the range of $60 million to $80 million. Earnings per share are expected to be in the range of $0.28 to $0.34 in the fourth quarter. Let me now summarize a few highlights for the year overall. First, TI had solid gains in profitability in 2006. Gross margin increased 2.1 percentage points to 50.9%. Operating margin increased 2.9 percentage points to 23.6%. Both were all-time highs for the company. Cash flow from operations was $2.45 billion, and we repurchased $5.3 billion of TI stock in the year. Although the near-term environment continues to be challenging, we believe this correction is happening quickly and will be relatively short-lived. For the long run, we continue to strategically shape the company, as noted by our increasing focus and results in the high-performance analog and today’s announcement of our CMOS R&D plans. We believe TI is well-positioned in market opportunities that are strong. We departed 2006 stronger than we entered the year, and we remain confident that there is no better place to be in the semiconductor industry than positioned as the leader in analog and DSP. With that, let me turn it back over to Ron.

Thanks, Kevin. At this time, I will ask the operator to open the lines up for your questions. In order to provide as many of you as possible an opportunity to ask your questions, please limit yourself to a single question. After our response, we will provide you an opportunity for an additional follow-up. Operator.

(Operator Instructions) Our first question comes from Cody Acree from Stifel Nicolaus. Please go ahead. Cody Acree - Stifel Nicolaus: Thanks. Kevin, maybe we can just start with your comments there on inventory and your fab loadings. You said, if I took that correctly, that you are already started to ramp the production process to prep for Q2 demand. Is that correct? Kevin P. March: Generally, that is correct, Cody. Again, just to remind everybody how the manufacture and how the inventory process flows from manufacturing, a good example is to look in third quarter when we started significantly reducing the load-ins in our foundries. Our inventories, even though we reduced the load-ins, continued to increase, our internal inventories continued to increase up through about November of the fourth quarter, that that inventory flowed into and then started decreasing from there. We are expecting it to continue to decrease into the first-half of the first quarter, but in the meantime, we are now beginning to restart the factories so that we have an appropriate amount of inventory to meet potential demand in the second quarter. Cody Acree - Stifel Nicolaus: I guess that gets then to my question. How much of an inventory, internal inventory decrease do you think you need to see to get to a comfortable level? Kevin P. March: Cody, we do not actually characterize those in-quarter numbers, or make forecasts actually on the inventory line itself. Let me just summarize it by saying that we expect it to continue to decline into the quarter from what we just reported for the fourth quarter, and it will turn around somewhere during the middle of the quarter and begin to grow again. Cody Acree - Stifel Nicolaus: Okay, and then a follow-up, if I may. What is your best guess on what is going on in the 3G market? Is it more of an economics issue? Is it a geographic problem? Is it just excess 3G inventory? What is it that you expect to turn that around? Kevin P. March: I will make some comments and let Ron add some color to it, but from what I have heard our customers describing, what we really have is the 3G market, it is still -- there are sales there. The sales just are not growing as fast and as I think many of our customers had anticipated or hoped for. Where we are really seeing a growth and I think what has been a surprise for everyone is the rate of growth in the low-end market, primarily in the emerging economies, China and India specifically. What causes the 3G to start growing again in the future at a faster pace? I guess it is really just going to come down to applications or other things that may appeal to you or me and other users as to why we might want to buy those phones versus what we have.

Cody, I think also, just to add, that we -- first of all, what we are seeing in the fourth quarter is probably a combination of what some of our handset customers maybe were even starting to feel and discussed in their October calls of what they saw in the third quarter, so there is probably a little bit of what we’ll call extra emphasis in our sequential decline in fourth quarter that goes across some of their results, both third and fourth. I think beyond just the lack of compelling applications, at some point, you actually may have operators choose to turn on more aggressively consumers to 3G, just because they get more efficiency out of their network. But that probably will require a lower 3G handset price than what we have to do today, just because it is strictly an economic game, or an economic calculation that they would base that switch over on. It is probably a combination of cost of the handset, combined with just the lack of compelling applications here and now today. Thank you, Cody, and let’s move to the next caller, please.

Our next question comes from Adam Parker from Sanford Bernstein. Adam Parker - Sanford Bernstein: I am still a little confused on this issue. Are you guys under-shipping consumption right now? And do you plan to throughout the quarter?

Help us -- are you talking broadly in semiconductor, Adam? Adam Parker - Sanford Bernstein: Sure.

To the extent that our customers are reducing inventory, then yes, that would translate to us under-shipping consumption. Adam Parker - Sanford Bernstein: But given you plan on ramping throughout the quarter, does that imply that you will be aligning with consumption by the end of the quarter? I guess what we are trying to figure out is why you think -- Kevin said we think it’s pretty short-lived and it’s happening quickly, the reduction. What gives you confidence to look out to Q2? Is it just normal seasonality, or -- ?

I will hit part of that, and then I will let Kevin also hit part of that. I think if you -- what causes us to ramp is what Kevin just described, which is we are starting wafers in our factories not based upon today’s demand but based upon demand three months or so, at a minimum, out. What gives us confidence that it will be short-lived is I would point to a couple of things. One, we do not see any broad-based significant excesses of inventory. We think because components are more readily available, customers generally can take what may be already relatively low levels of inventory and push them even lower. So the fact that we are seeing not a significant correction that is needing to take place but more fine-tuning by customers is one of the considerations that feeds into our operational plan. I think the other one that would tie to that is just what our customers seem to be saying about demand, and we do not have customers pointing to sharp fall-offs in their demand. Generally, demand seems to be healthy and relatively stable. Adam Parker - Sanford Bernstein: I’m a little confused still, because I am trying to figure out then what were the learning lessons from ’06. You guys obviously, not just TI, the industry over-shipped and your customers somewhere in the chain had a lot more inventory than you thought. I know you guys said you did a lot more to monitor things in the first-half of ’06, and at that time, you felt pretty confident you were in touch with your comes and in disti. So maybe the question is, is this the best you guys can do? What are the learning lessons from last year, given that you are guiding down 9 off of a down 5? Is it all mix? What are the learning lessons here? Kevin P. March: Adam, I think one of the other things that leads us to believe that this will probably be a fairly short-lived correction is that as you point out, we and everybody else are paying more attention to inventory and trying to respond more quickly than we perhaps did in years past. If we just look back at the late ’04 going into early ’05 example, that is one of the reasons that we look and say this appears to be shaping up to be a similar pattern and that we saw an inventory build, a couple of quarters of declines, and then it turned around. The lesson that we learned from that particular one was that when it did turn around, we did not get an advanced phone call. It turned around extremely fast on us, and we found ourselves starting in late ’05, and then spending the next year-and-a-half doing everything we could to catch up with that spring-back. So the lesson we are trying to learn from that one is don’t get too tight on reducing the inventory or anticipate that demand won’t come back without advanced notice. Be ready for it if it does come back. If it turns out it comes back more slowly or does not come back, we will take appropriate action, but we are really looking to learn the lesson from that ’04-05 cycle.

Thank you, Adam. Next caller, please.

Our next question comes from Glen Yeung from Citigroup. Please go ahead. Glen Yeung - Citigroup: Thanks. I think, Kevin, you mentioned that you are gaining share with LoCosto. I think you alluded to the fact that you are seeing some customers that you might not have otherwise had. Is LoCosto growing for you strongly enough to offset the declines that you’re seeing in OMAP and 3G? I guess both on a dollar and on a unit basis?

You mean in the fourth quarter? Clearly not. Glen Yeung - Citigroup: No, I’m really thinking as we look out into 2007, even if you want to tighten that up in the first-half. I would love to hear what you have to say about fourth quarter, but I am thinking more of the outlook as well.

We were pretty specific on the numbers in fourth quarter. We saw a 20% sequential decline in 3G revenue and yes, we saw growth in the non-3G revenue, both growth in units as well as revenue, but not sufficient again to offset the decline in 3G. So looking forward into 2007, it depends. We have a very strong position in the low-end, and as that market continues to grow, we will be the prime beneficiary in terms of the semiconductor manufacturers, of that growth. The question, Glen, is what you are asking on 3G, and we do not have a specific outlook. You have had numerous people talk about 3G. Pretty significant growth in 3G units, ’07 compared to 2006, and we certainly hope those forecasts come true. But at least what we have seen in fourth quarter and our expectation for first quarter, says it has not happened yet. So that is probably about as far out as I can reach on that. Did you have a follow-up, Glen? Glen Yeung - Citigroup: Well, just to clarify then. So is it fair to say that LoCosto represents more of a growth engine in the near-term than 3G does?

In fact, it did in the fourth quarter, so we expect that LoCosto ramp to continue very aggressively through 2007, so that certainly is a positive. We saw decline in fourth quarter. I would say at minimum that will be characterized as a pause continuing into first quarter, and it just is a question of when it turns on. Glen Yeung - Citigroup: Okay, so the follow-up is really on the gross margin outlook that you gave for Q1. If I just run through your range of guidance, you get a relatively wide range, although give the revenue decline, you are certainly showing some good stability with your gross margins. Given the commentary that utilization ought to build into or throughout the course of the first quarter, is it fair to assume that one, gross margins are bottoming in Q1? Then, secondarily, could you just talk a little bit about maybe Kevin, what sort of creates that range? Is it just revenues, or are there other things that create the range of gross margin guidance? Kevin P. March: Glen, I think that your analysis is probably pretty good, in that we do see our gross margins being fairly stable, as we saw just coming through this quarter, and you can do the math and come at a pretty similar conclusion for first quarter. Really, the range that we have given you on the revenue outlook is just a reflection of the fact that we just closed a quarter with a 0.89 book-to-bill, and it has been a while since it has been that low. So it is going to require a fair amount of in-quarter sales in order to make sure that we achieve the revenue range that we gave. So just given the fact the book-to-bill was as weak as it was really is what we have for the explanation for the width of that range and how far down it goes right now. Glen Yeung - Citigroup: Safe to say that gross margins bottom in Q1? Kevin P. March: I am not making a specific forecast there. I think you can do your math there, Glen, but I would just observe that our gross margins have been very stable for quite a long time now, including this most recent quarter. We do not expect too much variability as we look out into the future. Glen Yeung - Citigroup: That’s great, thanks.

Thank you, Glen. Next caller, please.

Our next question comes from Michael Masdea from Credit Suisse. Please go ahead. Michael Masdea - Credit Suisse: Thanks a lot. Kevin, earlier you made a reference to a period a couple of years ago and how this might be somewhat similar and you are trying to manage it a little differently. Could you help us understand what the disconnect is between your lead times and what customers are looking for, kind of now and then? And the same sort of thing on the turns environment. Is this a lot different from either of those perspectives, or does it look pretty similar? Kevin P. March: Actually, it is quite interesting. It is probably more similar than dissimilar. When we were coming through the first-half of ’04, you may recall we were working hard to try to build inventory and we had a difficult time actually doing it, because we had a lot of expedite requests happening from our customers. And then it fairly suddenly began to correct in the third quarter, late third quarter of ’04. The correction ran all the way through the first quarter of ’05 before we saw it kind of flatten out at the start to grow, and it took off again in third quarter. This demand environment feels to us quite similar to what we experienced back then. Again, the lesson we are trying to learn from that is not to get too tight on inventory on this part of the correction cycle, so as to possibly miss a sudden up-tick later in 2007. Michael Masdea - Credit Suisse: Thanks. Then, to your structuring commentary and your manufacturing commentary, does this suggest that -- a couple of things: one, that you have to be more tied to your foundries and cannot maybe move around businesses much? Then secondly, does it increase your percentage of outsourcing that we have gotten used to? Kevin P. March: I will take that in reverse order. We do not expect it to change in any material way the level of outsourcing that we have done. We have averaged about 50% of our most advanced digital processes. As far as tying us to any one foundry, no, we do not expect it to change that either. Really, what we are doing there, just to make sure folks understand, we have been working with the foundries now for 5-plus years, and really developed some good relationships and gotten pretty comfortable with how they operate. During that period, we continued to develop our own advanced digital manufacturing processes, as did the foundries develop theirs. Watching their development capability over the last few years, we have gained a lot of confidence in their ability to develop those processes in a manner that fully meets our needs. So as a result of that, we no longer believe that it is necessary to maintain this redundant capability, if you will, by developing it internally and having them develop also. Consequently, we are going to go ahead and discontinue the development effort just on the advanced digital processes. We will continue to do all of our own development on our analog and mixed signal processes, as we have for pretty much all of our years. From a timing standpoint, this actually is an opportune time for us to do it. 2007 is a period when we expect to complete the early capability for our 45-nanometer, and we can stop this activity during 2007 before we actually start incurring costs or activities on development for 32-nanometer, so it is very good timing for us to go ahead and do this right now. Michael Masdea - Credit Suisse: Thank you, guys, very much.

Thank you, Michael. Next caller, please.

Our next question comes from Chris Danely from J.P. Morgan. Please go ahead. Chris Danely - J.P. Morgan: Thanks, guys. Kevin, just to clarify on the inventory, you said that utilization rates go down for a while, then they go back up. So if we are sitting here three months from now in April, do you think your overall inventory is going to be flat in Q1 versus Q4? Kevin P. March: Chris, that is a level of detail in the forecast that I think you’ll remember we don’t typically give. What I am just trying to frame for you is the fact that, to follow-up on what Ron had commented on during a mid-quarter update, and that was that we felt then that our inventory would probably peak in November and begin to decline, and in fact it did. It continues to decline today and we expect that to continue probably into the first-half of the quarter before it begins to resume, the valuation begins to resume to increase. In order for that to happen, of course, we have already started increasing load-ins in our factories. Now, exactly where the inventory level lands, that is going to be as much a function of where inside the revenue guidance range that we’ve given you that we land. If we land at the high end, it will, but if it lowers, if we end low-end, it’ll be higher. Other than that, I really do not have more details than that for you, Chris. Chris Danely - J.P. Morgan: Because your revenue is lower than it was in the first-half of ’06, but we’re looking at $200 million more inventory than we had, so I am just wondering why you wouldn’t just bring it down a couple hundred million bucks, given the book-to-bills we have seen over the last couple of quarters? Kevin P. March: It is a good observation you’re making there, Chris. If you take a look at where we came out of the fourth quarter of 2005, recall that we came out with our delinquencies going way up on us, and we were running way behind on our deliveries, with way too little inventory. So again, it as simple as what I described a few minutes ago, that we want to learn the lessons from that last inventory correction and not under-call how much inventory we have on hand, should demand resume in a similar pattern to what we saw back in the 2005 timeframe. Chris Danely - J.P. Morgan: Got it. As my follow-up, so if everything works out as planned, could you guys be back at peak utilization rates by Q2 or Q3? Kevin P. March: It is too early for me to call on that one, Chris. We don’t have enough visibility to really give you a good insight on that just yet.

Thank you, Chris. Let’s move to the next caller, please.

Our next question comes from David Wu from Global Crown Capital. Please go ahead. David Wu - Global Crown Capital: Good afternoon. Kevin, I was just trying to get a better idea about how much savings of the $200 million you talked about, those two actions you talked about, how much of that is manufacturing versus the savings on developing R&D? The other question I want to just elaborate on is, if you’re going to stop developing your own digital CMOS process, how do you keep ahead of a guy like Qualcomm or any of these other guys that essentially use the same vendors that you will be relying on in the future for your wireless, to be ahead of those guys? Kevin P. March: Okay, David, let me go ahead and take a shot at those two. The $200 million of savings that we’re anticipating will begin in 2008. Right now, we don’t have a precise call on that, but it looks like probably 20% to 25% of that might be in the cost of revenue line and the balance will be in the R&D line. So that will probably be about the spread. As it relates to process advantage, the fact of the matter is because we are using the foundries for on average of about 50% of our advanced lithography capacity today, the truth of the matter is most of our competitors have access to exactly that same manufacturing technology, so where we are gaining our real advantage is how we’re actually designing our chips and providing the actual chips-based solutions that our customers want. That’s where we see the real differentiation, and that is what we have seen for the last few years. This is just a culmination of that reality, by discontinuing that internal development cost on the process technology. David Wu - Global Crown Capital: Your friends down in San Diego are claiming that they are going to close the process window, or lag window with you when we get to 45-nanometers. Kevin P. March: David, you probably know more about that than I do. I don’t know what to comment on that.

Thank you, David. Let’s move to the next caller, please.

Our next question comes from Tim Luke from Lehman Brothers. Please go ahead. Tim Luke - Lehman Brothers: Thanks. Kevin, just following on your commentary with respect to slightly higher turns being needed, given the lower bookings and book-to-bill. Could you give us some color on what sort of percentage the turns might be for the first quarter and how we might relate that to being a bit higher, as you say? Kevin P. March: Tim, I don’t have specific numbers on that. It’s more a qualitative statement. If you recall last quarter, our book-to-bill in semiconductor was about 0.93, so we were draining backlog in third quarter. And this quarter it was 0.89, so we drained more backlog. Our customers are, of course have been reducing orders and reducing their inventories, so they’re not giving us quite as much order -- what you would call it -- out in time as what we have seen in the past. Intuitively, that means we would have to have higher turns. Ron, I don’t know if you have anything on the turns data there?

No, I don’t have the turns data. I was just looking at, if you look at the backlog difference. In fourth quarter, new orders came in right at $3 billion, and we shipped out $33.85 in revenue, so the difference there is basically the backlog decline that happened in the fourth quarter. Tim Luke - Lehman Brothers: How does that refer to prior periods where you saw some slowing and then you were hoping for a pick-up in terms of expectation, and you have been -- relative to ’04, for example? Kevin P. March: Well, again, that’s the lesson that we are learning, and as back in ’04, this is exactly what happened, where we found that our visibility came in substantially, as our customers slowed down in their orders and our turns increased until there was a clearing of the inventory, so to speak, but it began to stabilize back to a kind of one book-to-bill. Tim Luke - Lehman Brothers: In aligning those two so closely though in comparing them, you must have a sense of how you were expecting the turns to be as a percentage of the revenue that might help us? Kevin P. March: Tim, actually, I don’t have that data with me, so I really can’t say -- Tim Luke - Lehman Brothers: Sure. Maybe as a follow-up --

Let me make one other comment. We have seen an increasing percentage of our revenue, especially in high-volume areas like wireless, move toward these inventory consignment programs as well. In any kind of inventory consignment program, basically since you are not getting forward orders from the customers and backlog, you’re basically building to a forecast. All of that appears as turns business, because the order and the revenue -- the order comes in basically as the product is pulled. Just be a little careful that over the last couple of years, we have seen a pretty significant increase in this consignment inventory type of program that would affect the comparisons as well. Tim Luke - Lehman Brothers: Just as a follow-up then, first, should we assume your utilization goes higher in both the foundry business as well as what you have in-house in terms of production? Then, with respect to your 3G share, on Friday, one of the big handset OEMs was saying that they would expect to work with you more at the high-end as well as the lower end of their product line. Can you suggest whether you think your share in 3G may now begin to improve? Thanks.

Tim, our share in 3G is already pretty strong, so I don’t want to try to promise that it goes even higher. I think that, as I said in the prepared remarks, you have pluses and minuses. There are areas where, for example, we have talked about over in Japan where that market is increasingly competitive. We have historically had 100% share with our OMAP applications processor and we now have a competitor. You may see areas like that market, where we might see declines and there are other opportunities that customers, as I have said, that we haven’t been as historically connected, where our share potential certainly has opportunity to go higher. But let me not be specific to any particular customer until that customer is more comfortable with us making -- with them making such announcements. Kevin P. March: Tim, on the utilization question for us and for our foundries, I would point out that during Ron’s opening remarks, he did mention that our wireless revenue was down 10% sequentially, and that is somewhat abnormal, because fourth quarter, that’s usually up probably in the teens someplace. I bring that up only to point out that a large portion of that product is built in our foundries, and that is an area where we continue to have inventory beyond what our immediate needs are. As for the rest of our internally built product, those are areas where we’ll see our utilization internally begin to increase in the first quarter, especially as we continue to try to restock our die bank in the catalogue spaces, particularly high-performance analog.

Thank you, Tim. Let’s move to the next caller, please.

Our next question comes from Ross Seymore from Deutsche Bank. Please go ahead. Ross Seymore - Deutsche Bank: Thanks. Kevin, actually you just mentioned about the differences going on between wireless and analog side of things. Could you give us a little bit of an idea heading forward as opposed to in the fourth quarter what the differences are and how you expect those two sub-segments to behave? Kevin P. March: Well, if we look into history to try to understand what happens with wireless, history tells us that normally we see mid-single-digit declines in the first quarter for wireless. I am a little cautious about necessarily relying on history right now because we just saw a very abnormal fourth quarter versus what we typically see. The overall range that we do expect, the ranges we have given, of course, is down 5% to 13%, so we are expecting that to be pretty broad-based across pretty much all of our product lines right now. Beyond that, I don’t have a lot more color to add to that, Ross.

Did you have a follow-up, Ross? Ross Seymore - Deutsche Bank: Yes, I did. In looking at the comparisons back to the ’04 and early ’05 timeframe, again if I just compare your numbers, it seems like this time it is a lot more severe. If it is just inventory and we have learned a lesson, why do you think it would be more severe? Maybe the answer is it is not just inventory. In that case, if you could discuss what really do you think is going on?

One thing I would say is we have said it is not just inventory. Clearly in fourth quarter, we saw a significant shift in wireless mix, with weakness at the high-end, that I would not characterize as all inventory adjustment. I think there’s some operator influenced activity and maybe some consumer preferences that are becoming more evident there. That would be one example that I would throw out of the difference compared to back in ’04. Ross Seymore - Deutsche Bank: Okay, so just the mix to the low-end of the handset market?

That would be the most significant difference beyond the adjustment to inventory that we see taking place with the broader base of customers. Ross Seymore - Deutsche Bank: Do you see that as causing a problem in your overall wireless growth for ’07 as the same sort of mix transition takes place?

I think we just have to wait to see how 3G plays out in 2007. Again, if I look at what a lot of your wireless equipment counterparts are projecting, they’re projecting a pretty healthy growth number for ’07, so we’ll see how that plays out over time. Ross Seymore - Deutsche Bank: Thank you.

Thank you, Ross. Let’s move to the next caller, please.

Our next question comes from Doug Freedman from AMTEC Research. Please go ahead. Doug Freedman - American Technology Research, Inc.: Thanks for taking my question, guys. If we could talk a little bit, the ASP situation in analog, what you are seeing as far as the price environment out there right now.

Doug, I would in general, it’s stable. I mean, most of our analog revenue is a proprietary custom product or a highly differentiated high-performance analog product, and I would say that is pretty stable. For that very small part of our revenue that is commodity, and I’ll throw a small part of the analog, but probably more standard logic product there, pricing fourth quarter was stable with third quarter. It had been moving up probably over the prior quarters, but what we saw was a stabilization where the pricing really didn’t move fourth quarter compared to third quarter. Doug Freedman - American Technology Research, Inc.: Can you offer some detail on where you guys believe you’ve taken share in the analog market? Then I’ve got another quick follow-up on the foundry question.

Doug, I don’t know that we -- I mean, our analog product base is very broad. I think if you look at where we’re seeing growth, our growth is very strong in areas like power management, high-performance op amp. We’ve seen good, solid growth in data converters. Again, I’m not talking fourth quarter specifically, but for over a period of time. But it’s difficult to distinguish between, for example, an area like power management where we’re seeing good solid growth and overall market gains. In other words, power management, especially portable power management, is probably a trend overall. I would say our market share changes probably are similarly broad-based. I don’t think you can isolate it to converters or to power management. I think I would say they’re pretty broad-based, reflecting both our portfolio as well as what we’ve described as a significant competitive advantage that we have, which is just the breadth and depth of the field resources we have deployed directly in front of our customers, so again, pretty broad-based. Doug Freedman - American Technology Research, Inc.: All right, terrific. On the foundry, just a real quick follow-up. In the past, you’ve given it as a percentage of total wafer starts. Any chance we can get that for what it was in the fourth quarter? How much of your wafer demand was sourced outside?

For 2006 overall, it is about 25% of our total wafers, at about 50% of our advanced logic or advanced CMOS wafer demand was outsourced. That is for 2006 overall. We don’t break it out quarter by quarter, Doug. Thank you for your call, and let’s move to the next caller, please.

Our next question comes from Mark Edelstone from Morgan Stanley. Please go ahead. Mark Edelstone - Morgan Stanley: Good afternoon, guys, thanks a lot. First question was on just the LoCosto potential that you guys see, now that it is high production. You’ve got quite a few design wins. When you look at the market that it is basically replacing, which in some cases is going to be some of your own chipsets that you had in the past, do you have a sense for what kind of incremental TAM you open up for yourselves here, as LoCosto ramps?

Mark, I’m not sure we would characterize it as an incremental TAM. I mean, you’re right. There is some replacement of, for example, multi-chip product that we historically sold, but two things. Our content generally will benefit with LoCosto because we are integrating functions in LoCosto that we did not previously provide into those low-cost handsets previously, such as the RF Transceiver. But maybe more importantly, the market TAM that opens up is this emerging economy market opportunity that is very fast growing, that is really a result of the price elasticity of the market. In other words, as our large customers are able to continue to drive down the price of their handsets into these emerging economies, the volume growth they’re seeing is tremendous. So it really is more of a new subscriber market than a replacement market that we’re addressing with LoCosto, and then of course, over time, those new subscribers will want more advanced features and our customers and TI hope to be able to keep them on our technology as they then turn into replacement markets. Mark Edelstone - Morgan Stanley: Maybe just to state it a little bit differently then, if you looked at your volumes in 2006, how many units would you have characterized as “low-end”?

One way of doing it that I think gets to your point, Mark, in 2006, we would characterize that about 25% of our wireless revenue was addressing the low-cost handset market, as defined by -- I think we look at handsets that sell for $75 or less. Mark Edelstone - Morgan Stanley: Okay, and then just one additional clarification, if I could, for Kevin. You guys clearly took some expense savings steps in the fourth quarter. Can you quantify how much those were and how much of that comes back in Q1? Kevin P. March: Mark, the biggest driver of those in the fourth quarter were just the normal, seasonal holidays and vacations that people take, so we will lose pretty much all of that as we go into first quarter, because there just aren’t nearly as many holidays between Thanksgiving and the Christmas season, so that pretty much cancels all that out. Keep in mind also that our annual pay and benefit adjustments are made at the start of February, so we tend to see an increase in the pay and benefits line affecting the op-ex in the first quarter. So we typically have a transition, a headwind transition on that, if you will.

We also in fourth quarter, we averaged one to seven days, depending upon factory of shutdowns over the holidays as well, so probably we would be more operating on a normal schedule in the first quarter on those areas as well. Mark, did you have a quick follow-up? Mark Edelstone - Morgan Stanley: No, that’s it. Thank you.

Thank you, Mark. Let’s move to the next caller, please.

Our next question comes from Chris Caso from Friedman Billings. Please go ahead. Chris Caso - Friedman, Billings, Ramsey: Thanks. I wondered if you could just run some more color onto the expectations in the DLP business. I think you said that business was running about flat on a year-over-year basis. Perhaps if you could break out what you’re seeing in that business with respect to pricing and units. I know it is probably quite different between the TV and the projector segment, and kind of what from here on out, what do you guys think of the growth rate of that business is going forward?

Chris, I don’t know that I’m going to have all the detail you’re asking for. Certainly if you look, for example, the year-over-year trends, fourth quarter to fourth quarter, units were up, pricing was down. Our market share in, for example, televisions compared to the year-ago was probably about stable. We hold market share in the greater-than 40-inch TV space in the upper-teens. So the market overall has grown in terms of units, but it’s probably no surprise to anybody out there that the television market is highly competitive and prices have come down rapidly. So certainly some of that unit gain we gave back in the form or pricing. Front projectors, let me just kind of emphasize what I said, and this is kind of more going forward, which I think was part of what your question was. Let me first of all just start with televisions. So televisions typically, if you look at units of large screen televisions sold, first quarter will typically be down close to 20% compared to fourth quarter, and that’s again sell-through of televisions, not our products sold into televisions. Typically there is an additional decline in the second quarter, and you just have to adjust that based on a lag probably about 12 weeks, meaning we’re shipping our chips, our DLP, or our DLP chipset, about 12 weeks ahead of when a consumer purchases a television in a normal environment, so that would say we would expect seasonal declines for televisions going into the first quarter. Then, on top of that, as I noted in my prepared remarks, we do have some inventory that built at some of our front projector customers in the fourth quarter that we expect to correct in the first quarter as well. Do you have a follow-on, Chris? Chris Caso - Friedman, Billings, Ramsey: In terms of, and I apologize if the question was confusing, but it was really kind of longer-term focused on the DLP business. I guess with some of the price declines that we have seen, certainly in the TV business, I think the DLP business has been running sort of in the 30% or so year-over-year growth range in the past. I guess the question is, is the business flattening out? I think it is about a billion-dollar business for you guys now.

I think our expectations in terms of unit growth would be consistent with those, call it 25% or so unit growth Kegger estimates, and that holds pretty much true in the big-screen TV space, as well as in the projector space. In terms of revenue flattening out, I think if you look at what we delivered in ’06 compared to ’05, revenue in DLP was up 15%. I don’t have an extrapolation forward for you, although certainly I think we view the DLP opportunity as two-fold. One, we believe there is revenue growth potential and opportunity there, and we’re investing accordingly. But maybe more importantly, this is a profitable business. This isn’t one -- in fact, its profitability, both at a gross margin and operating level, would be above corporate average. So the point I’m making is this is not an area that we are rationalizing losses or poor gross margins because of some glorious future opportunity. It is already one of our most profitable areas and in fact it’s growing as well. So it’s a business that we want to make as big as we can get it, based upon the profit contribution that it’s returning. Chris, thank you for your call. Let’s move to the next caller, please.

Our next question comes from Jim Covello from Goldman Sachs. Please go ahead. Jim Covello - Goldman Sachs: Thanks so much, guys. Just a quick one, before the follow-up. You keep referencing the time period back to ’04-05. What are the utilization rates kind of on a relative basis today versus what they were back then? Kevin P. March: The utilization rates today are below what they were back then, although I don’t have the specific figures. I can just tell you relatively speaking, they are below what they were back then. Jim Covello - Goldman Sachs: Then doesn’t that raise some concern on your part that it got so bad so fast that maybe things are a little bit different this time, or is that not a right way to think about it? Kevin P. March: Jim, I want to be careful not to say that we’re looking at the ’04-05 cycle to be an exact duplicate of this cycle. I mean, just for one of the reasons that Ron pointed out a moment ago, the difference between the two cycles has to do with this shift that we’re seeing in the wireless demand. But remove the wireless phenomenon, and the rest of it is looking pretty similar to us. What we’re trying to do is simply learn from what we experienced on that cycle and not repeat, find ourselves too short on inventory on the other side. It’s very easy for us to slow the factories down. It’s a heck of a lot harder to speed them up if demand suddenly comes in faster than expected. Jim Covello - Goldman Sachs: Right, so better safe than sorry kind of approach? Kevin P. March: Exactly. Jim Covello - Goldman Sachs: Okay, that makes a lot of sense. Then, on the cap-ex, this will be my follow-up. Is this -- I mean, it’s pretty low level. You guys have done a great job of controlling the capital expenditures and depreciation is coming down. Do you think this is a new sustainable level, or do you think this is kind of a little too low and you would see it being higher into the future? Kevin P. March: I think this is a level that we find very appealing for the company going forward. Whether it is exactly this level on a continuing basis, of course, it will always fluctuate. But let me just point to some things, because it is a bit different than you have seen out of us in the past few years. It is really probably three things driving it. One, analog is becoming a bigger part of TI, especially high-performance analog, and we expect that to continue in the future. As you’re well aware, Jim, that is inherently less capital intensive. The second is, in 2006, we actually spent a lot of money expanding in a sizable fashion our assembly test operations, to really bring our capacity up in a significant manner. Looking forward to 2007, we don’t expect it to be quite as heavy a level of spending as what we had to do in 2006. The third area is we are making this change in our advanced digital CMOS manufacturing process development. Our need for development equipment spending goes away as it relates to that particular process development technology. So that also is a savings of capital requirement that we’ll have in the future. So those are three things really contributing to our current outlook of about $0.9 billion. Jim Covello - Goldman Sachs: Terrific. Thanks so much.

Thank you, Jim. Let’s move to the next caller, please.

Our next question comes from Uche Orji from UBS. Please go ahead. Uche Orji - UBS: Thank you very much, guys. Let me just clarify a few things. First, the way you have categorized your handsets, you are talking about 25% are being less than $75, and that is your low-end. Should we assume then that the ASPs we have for the product here, it’s about 50% of your units is more to low-end. Is that the right way to think about it?

I’m sorry, could you repeat the part about -- Uche Orji - UBS: Should I think that 50% of your unit shipments is low-end, if I think that 25% of the revenue?

Yes, it would be significantly higher than the revenue mix, so you’re right that our content in the low-end is probably running about $5 a handset, and that probably compares to about $10 on average, and probably over $20 for a 3G handset, so that’s correct, Uche. Uche Orji - UBS: Just if I were to understand the way you’re pushing your performance, your process technology with LoCosto, from your experience, you are currently at 90-millimeters and your next competitors are call it at 130. How much longer do you think you can sustain this advantage with LoCosto? Secondly, I’m sure someone asked this before, maybe I’m repeating myself here, repeating a question already asked, but I didn’t get the answer. How much of cannibalization should we expect? I mean, are people using this for what ideally should be medium handsets, or is it a completely new market? How should we think about this?

First of all, the process technology advantage, I don’t know how long we can sustain because we only get the insight into what we’re doing. What I can say is we’re pushing it very aggressively. I do believe an area that is a very significant advantage in terms of TI being able to move rapidly forward into new process technologies is our digital RF technology. The advantage of having that RF implemented digitally is that we can scale it and realize the full benefits of digital process, moving from process node to process node. I suspect some of our competitors that are trying to play in this space do not have the level of digital implementation of RF and therefore, when they go from process technology node to process technology node, trying to scale analog is much, much more complex. Again, I don’t know where they are in their stage of things, but I can certainly say we’re moving aggressively and we expect to realize those benefits. If you could come back and refresh me, what was your question on -- oh, whether it is a new market versus cannibalization. No, I think, and again, I don’t have a specific “it’s 20% versus what we were versus 80% new market”, but what I can say is everything that we are shipping LoCosto into for the most part to date and probably very significantly through 2007, I would describe as being driven by these emerging market economies, where many of our LoCosto based consumers, it will be their first experience with a cell phone. Now, at the same time, I’ll also say if you look at some of our customers’ products that are out there that are based upon LoCosto, these aren’t clunky phones and it is yet to be seen how much markets like the North American market will adopt them just because they are low-cost and they are actually pretty cool phones. But I would say by far what we’ve seen to date, and generally what we’d expect in 2007, is this is incremental, new subscriber business that we and our customers are benefiting from. I’m sorry, Uche, let us move to the next caller, please. Thank you for your question. Next caller.

Our next question comes from Sumit Dhanda from Banc of America. Please go ahead.

Sumit, are you there? Sumit Dhanda - Banc of America Securities: Right here, sorry about that. My question basically relates again back to your 3G business, and it’s a two-parter, basically. Number one, can you give us an idea about where your 3G revenues in 2006 finished, you know, handset and infrastructure, the breakout, if possible. Second, as you think about your 3G business, clearly some of your customers have reported some softness in that market. You’ve alluded to some potential share losses. I guess my question is how much would you attribute to the beginnings of some slight share loss here, and then how much would you attribute to the softness of the customers? Then, as you think about new businesses, when do you think your new businesses will start to kick in on the 3G side and start to offset some of these share losses?

Okay, Sumit, I don’t have the full breakout for you, but what I can say is that wireless infrastructure in 2006 was about -- I think it was 7% or 8% of our wireless revenue total. That business grew over 60% last year, so it certainly was a great opportunity for us. The 3G business was about 35% of our wireless revenue, and that business grew a little over 50% in 2006 compared to 2005. Of course, I’m not sure if I said this earlier, but wireless overall grew 16% in 2006 compared to 2005. So as the percentage of -- yes, I think I answered your question there. Did I miss anything? Sumit Dhanda - Banc of America Securities: No, you didn’t. Then, the second part of the question basically related to the trajectory of when you might start to see some share gains within 3G offsetting some of the initial share losses, the timing of that. Plus, the softness that you’ve seen in your 3G business recently, how much of that can be really traced back to general softness in the market versus something specific you might be seeing --

Okay, in share gains in 3G versus losses, you’re saying specific to 3G? Sumit Dhanda - Banc of America Securities: Specific to 3G, yes.

First of all, I don’t know if you try to quantify any share losses in 3G to date, they probably would be pretty minimal. Again, I kind of alluded to some of the activity over in DoCoMo, but to be honest, I think our share has held up very well, and I do not know that based upon any production that our competitors are doing at this point would still be at a relatively low level. I don’t want to try to quantify when or define when we think there is a crossover between wanting to share losses and regaining share and all that, because we simply do not have that level of insight. What I can say is we have strong share in 3G and we fully expect that, based upon the opportunities we are addressing today, our share in 3G will continue to be strong. Sumit Dhanda - Banc of America Securities: Can I ask a quick follow-up on that?

Sure. Sumit Dhanda - Banc of America Securities: In terms of your entity DoCoMo business, clearly that has been soft here. Some of that has been attributed to wireless portability in Japan, but it seems like there has been a bounce in subscriber growth. Have you started to see any of that balance that filtered through that to you or not?

No. Our revenue in Japan for 3G declined fourth quarter versus third quarter, and our insight into handset inventory over there was that handset inventory continues to be depleted in fourth quarter, although we expect that inventory correction is largely played out at this point. Again, inventory did go down third to fourth quarter of handsets in Japan but again, it is probably stable at about where that operator wants to see it. We will have time for one final call, Operator.

Certainly, sir. Our last question comes from David Wong from A.G. Edwards. Please go ahead. David Wong - A.G. Edwards: Thank you very much. You’ve talked quite a lot about the wireless handset end-markets. Can you step through some of your other markets? Is there anything that is actually strong as opposed to weak? What are the other end-markets thus showing weakness below normal seasonality?

David, I think again fourth quarter we would characterize as broadly below -- call it seasonal average type of characterization. I think we are probably not the best spokesperson for what is going on in the PC market but what we saw, for example, in notebooks seemed relatively in line. We saw, in the storage market, hard disk drive, actually what we would say is pretty maybe seasonally strong demand in the quarter. At the same time, that was offset by some weakness on the printer side. If we look at what we would characterize as industrial, I would probably characterize that as stable in fourth quarter. Automatic equipment sub-segment remains weak. If you go over into the consumer space, again what we talked about with the HDTV space and pricing weakness there is a factor. That is a segment where again, we sell our own DLP technology but we also sell line drivers into some of the plasma display manufacturers. That is an area that we would say there is excessive inventory currently, would be in plasma display technology. Probably the final area I would just mention would be in the broadband area. We actually saw sequential growth in fourth quarter, and that was really kind of a snap-back, a recovery from inventory correction that was taking place in the third quarter. Again, that is in the residential gateway area, which is certainly what makes up the most, the strong majority of the client side broadband business at this point. Did you have a quick follow-on, David? David Wong - A.G. Edwards: No, I’m good, actually. Thank you very much.

Thank you. With that, we will close our call. Let me remind you that the replay is available on the website. Thank you and good evening.

Thank you, everyone. This concludes tonight’s conference call. You may now disconnect, and please have a wonderful day.

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