Question-and-Answer Session
Operator
(Operator instructions) Our first question comes from Rob Stone with Cowen and Company; please proceed
Rob Stone – Cowen and Company
I wonder if could give us just a little bit more color on the ASP sequential trend, that you’re expecting; which you had in Q3 and which you are expecting in Q4. I know you don’t give precise ASPs, but if you just give us the appropriate quarter-on-quarter trend please.
Zhengrong Shi
Rob, from Q2 if you go to Q3, basically ASP for Q2, Q3 in euro currency is fairly flat. Okay, US dollar currency is about 3% in volume is purely due to euro depreciation. I think from Q3 to Q4 based on Euro currency, the ASP is falling about 5%.
Rob Stone – Cowen and Company
So that translate 5% plus of the 12% hit from the?
Amy Zhang
12% yes. 12% effect impact on ASP.
Rob Stone – Cowen and Company
Respecting ASPs down that about 17% in the US dollars in Q4?
Zhengrong Shi
Yes.
Rob Stone – Cowen and Company
Thank you.
Operator
And our next question comes from Sanjay Shrestha with Lazard Capital Markets; please proceed.
Sanjay Shrestha – Lazard Capital Markets
Thank you. Good to see you guys up announcing the gradual capacity expansion here. A quick question along those lines; for Q4 we’ve got the ASP trend, but for 2009 in that 600 megawatt commitment that you guys have, how much of that is a Euro denominated contract and what sort of an ASP trend you are seeing in that? And I’ve got a follow-up question after that.
Amy Zhang
Right, out of that 600 megawatts we have secured, majority of that are actually from the European markets. We actually haven’t included any orders from the U.S. market yet. So, I would say out of that 600, more than 90% will be from Euro denominated contract.
Sanjay Shrestha – Lazard Capital Markets
So, then is it fair to say then, 18% is 5% reduction foreign currency for next year, layer on top of that, at least another 10% related to the feed-in-tariff dynamics and that’s sort of the pricing reduction we are seeing, correct?
Stuart Wenham
Actually, I think the reality is on the next years ASP in Euro currency compared to Q3 is about 10%.
Sanjay Shrestha – Lazard Capital Markets
Around 10% compared to Q3, okay. One last question then guys, in terms of the spot poly market which is directionally coming down, so what are you guys seeing for next year with the long-term contract in the spot market, are you comfortable? Can you give us a sense as to what’s your new target gross margin for 2009 after having worked through all this high price inventory in Q4?
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