Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Gary Hsueh – Oppenheimer & Co.
Gary Hsueh – Oppenheimer & Co.
Just a quick question, I popped on the call a little late but obviously you talked about one OEM taking in house an integrated kind of module assembly that might have hurt your business in either the networking and telecom business or the server business. Can you just help me out and elaborate a little bit more on that?
Iain MacKenzie
Sure, we announced it last quarter, it’s actually a program that’s been running and building since 2001 or 2002 and has gone through an acquisition of the company in the meantime. We group it in to networking telecom classification and it’s around about $24 million annualized.
Gary Hsueh – Oppenheimer & Co.
So basically the step down in the May quarter reflected 100% of that dynamic?
Iain MacKenzie
That’s correct.
Gary Hsueh – Oppenheimer & Co.
I was just on the Micron call and I think they talked about a little bit of a recovery here on the enterprise sector particularly with DDR3, are you guys seeing that yet or where are you in terms of the cycle in your exposure on the DDR3 module side to the enterprise server market?
Iain MacKenzie
Yes, we’re certainly starting to see that with qualifications done in good timing and seeing it now I think more so you’ll see that in our current or new Q4 quarter as opposed to last Q3 which finished in May. So yes, certainly seeing it and feeling it strengthen right now.
Gary Hsueh – Oppenheimer & Co.
Okay, so would that be the primary driver for sequential revenue growth in Q4 then?
Iain MacKenzie
It will certainly be one of the drivers and then we’ll have the AMD DDR2 Istanbul that’s going to kind of push the reverse for DDR2 perhaps a little bit better price point than the Intel Nehalem. So that new six core coming out is good timing, I think it was five months early by AMD so, DDR2 will be pushed. Then Brazil is certainly seeing some strength and recovery of both the economy, the market and hence demand along with ASPs as DDR3 tends to be feeling as if it’s a shortage. So, I’m thinking AMD may very well benefit from some of that too.
Gary Hsueh – Oppenheimer & Co.
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