Question-and-Answer Session
Operator
Thank you sir, at this time if you do have a question please signal us by pressing star one on your touchtone telephone. Once again that is star one on your phone if you have a question. We will take questions in the order that you signal us and take as many questions as time permits. We remind you that if using a speakerphone, please pick up your handset before signaling. We’ll pause for a moment to give everyone a chance to respond. Again star one for questions. First we’ll go to Satya Kumar in San Francisco, please go ahead.
Satya Kumar – Credit Suisse
Yeah, hi, thanks for taking my question. Just wanted to get a sense of how much you’re handicapping the risk that’s out there. It seems like several products are getting pushed out and you’re guiding down for orders. How much of your bookings in the first quarter and as you look into the second quarter has any meaningful amount of DRAM orders in the forecast. How do you feel that you’ve handicapped that in your guidance?
Rick Hill
Well I think that had we not had a potential slowdown in some memory investment, we would have anticipated the order outlook to be up this quarter. The reality is within the last few weeks we’ve been informed of a large push out that’s been involved in the DRAM business and that’s what’s caused us to change the forecast from flat to down from flat to up. So it is handicapped in those numbers.
Satya Kumar – Credit Suisse
Okay that’s very helpful. Can I have a quick follow up, it sounded like you were a lot more optimistic with your new products this time around, on the other hand there is also a slight decline in your gross margins. Last week one of your competitors talked about increasing pricing pressures, are your products sufficiently differentiated here that you don’t have to price discount in order to gain share or how should we think about that?
Rick Hill
Well I think one thing is you have to compete competitively with price in this business and have since the very beginning. I think that the pressure on margins is largely one of mix in this particular case and it’s not really a focus or a cause because of our new products. In fact, just the opposite, I think the performance of the new products are so significantly better than anything out there on the market, if anything they’ll have a positive impact at gross margin.
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