Question-and-Answer Session
Operator
(Operator Instructions) The first question comes from Michael Masdea - Credit Suisse.
Michael Masdea - Credit Suisse
Good progress in the quarter. Can you give us a little more quantification of the impact of the 12,000 wafers and also the distribution inventory change on the revenue and growth margin?
Bertrand Cambou
Sure. First to the 12,000 wafers. We are caught here by some kind of unknown. We have specifications for the raw materials. Those materials were essentially within our specs but different than any type of wafers we had seen in the past. When we find the problem, that we have the 12,000 wafers all ready in the line and that many affected the mature technology, but also leading edge technology.
As a result a high scrap rate of those wafers increased testing to be sure that we screened all the qualities and as we were doing this work we had essentially empty tester waiting on the back end and delinquency to the customer.
We showed the impact of those 12,000 wafers was quite massive for us and unexpected. Since then the following has been done: All raw materials is out and either processed or scrapped. All materials in line are is currently to our specifications and we have changed our incoming spec now to incorporate the learning that we had and are looking at the opportunity to tighten our spec to better manage our supplier going forward.
The yields as we speak are back to normal and the 90 nanometer yield are above our expectations, essentially reaching maturity and this is why we decided to essentially switch hard fab 25 like we did.
On the revenue distribution model, this is kind of great news because we have ties to a previous agreement that was forcing us to sell to a buy/sell program through an Asian distributor. I think as I said we're able to have revenues on the spot because as quickly as we are shipping them material we are able to recognize revenues. But that model was essentially weak as far as giving us visibility of what the customer really needs.
We essentially were pushing for a long time to go and sell direct like we do across the board. To give you a magnitude here, this is about 35 million to 40 million sales per quarter. That's pretty significant for us. It's turned out that we had the agreement in place in such a way that it was fully impacting Q3 ahead of our schedule. We knew that by doing that, that we'll change the reporting structure, but this is the right thing to do for the company. This is a one-time event and now that this is behind us, we are starting off Q4 on a clean sheet of paper. We don't have any recognized revenues in that channel anymore but the one that has been consumed.
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