Question-and-Answer Session
Operator
(Operator Instructions). Your first question comes from the line of Hans Mosesmann. Please proceed.
Hans Mosesmann - Raymond James
Thank you. Just one question, I think Bruce may have mentioned or Ray that wafers starts have started to move upward, and that your guidance is roughly speaking rather flat, so much below seasonality. How do you explain that, or would you say that as towards the end of the year you are going to see the more seasonal aspects relative to this wafer start increase?
Ray Cisneros
Hi. This is Ray Cisneros. There are combinations of reasons why we have to do that. Obviously, just the natural balance of supply to the marketplace and what we had to do in the previous quarter, obviously it brings the situation we have to prepare for the next round of products to replace that older VGA and so we have to prepare for that. The other reasons for increased wafer starts as we have mentioned a shift to the larger resolution sensors which means they take their much larger dye, so they incorporate, so they take up more wafers. So, with that resolution mix we have to be cognizant effect that requires more wafers.
Hans Mosesmann - Raymond James
Okay. And then as a quick follow-up, in terms of this mix of the aging or the older VGA product, how is that inventory situation perhaps out there on your balance sheet, how is that declining? I assume that it is becoming much of a factor in terms of inventory?
Peter Leigh
Hans, this is Peter Leigh. In fact, we sold out the older generation products and have to re-order them. So, the answer is, the risk at this point is negligible.
Hans Mosesmann - Raymond James
Excellent. Thank you.
Operator
(Operator Instructions). Your next question comes from the line of Tristan Gerra. Please proceed.
Tristan Gerra - Robert W. Baird
Hi, good afternoon. Could you talk about the timing of the 300 millimeter fab migration in? And potentially what this could do to overall capacity given that it does seems to be already some of the capacity in the market for CMOS sensors with some older fabs been converted to CMOS sensors production and putting pricing pressure on VGA specifically?
Bruce Weyer
Yes, Tristan this is Bruce Weyer. From an economic standpoint, we have found 8-inch fabs to be very economical in producing our VGA product. So, we have not had to transition that product into 300 millimeter fab. Obviously from a strategic standpoint, we continue to look at our entire portfolio and ensured that we target each resolution at the appropriate family resource to be at 8-inch or 12-inch and also the different process technologies related to that.
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