Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Adele Mao - Susquehanna Financial Group.
Adele Mao - Susquehanna Financial Group
I am trying to understand a little bit more in terms of why revenue ramp ups in low end and advanced segments have led to lower gross margins. You mentioned that these are the segments that you have not achieved scale economy. Maybe you can go over the volume mix again on your low end, mid-tier, and advanced segments, and discuss their respective gross margins at present.
Patricia Chou
Sure. Great question, Adele. For the low end, such as the automotive, get to the near and [inaudible] devices, in the second quarter the shipment volume from this category accounted for around 20% of our total shipments.
And if we move forward a little bit to including the mono display, which is also part of the low end P&P, that total shipment volume would be around 50%. So you can tell, the fastest growing low end shipment accounts for a bigger and bigger slice of the total P&P marketing mend.
And ASP for this category are relatively low comparing with the mentoring and the high-end mp4 product.
Adele Mao - Susquehanna Financial Group
So what is the gross margin for low end automotive products at present?
Patricia Chou
Currently we would say it's around a little bit below our average gross margin. However, after our continual cost down for this product segment, we believe we can increase the gross margin for even these low end products, gradually. In fact, our new product lines of series 2 and series 3 are mainly addressing these fast-growing segments.
So that's why we believe that the gross margin in the second half of this year will gradually increase a little bit.
Adele Mao - Susquehanna Financial Group
So, when you mentioned that you would like to reach scale economy from the low end and the advanced segment, improve your gross margin in the second half, are we talking about towards 30% or 30% to 35%, as you have guided in the past quarter?
Patricia Chou
We are not so sure how fast that we can return to the previous 30% or above but we are confident that we will enjoy the benefits of the cost down after the ramp up of series 2 and series 3 in the second half.
Currently we are very close to 30% so it depends on how soon we can really reach the economy of scale.
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