Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Michael Chu – J.P. Morgan.
Michael Chu – J.P. Morgan
Just a quick one here. You see any benefits from a COGS perspective as a result of maybe a weakening overall commodity outlook?
Timothy C. Carlson
Michael, I do believe there will be some benefit. How quickly they work their way through the supply chain is yet to be seen but our supply chain group is not only attacking commodity cost structures within our cost structure but all material cost structures as well in order to improve and drive improvements gross margins.
Michael Chu – J.P. Morgan
I guess on a new products front it sounds like you’ve had some wins. Have you had to change your pricing scheme for those products? I know in the past you’ve been advocating more of a value based pricing.
Douglas A. Neugold
Yes. No, Michael, we haven’t. The business that we converted was under the terms that we hope to convert all our business under so it’s based on the value created and we’re happy to get that done in the quarter. Yes, I think I spoke last time about the fact that it takes a little bit of time to get that new business model accepted and work through the customers’ apparatus for buying things and that’s what we’ve been focusing on for the last quarter so that’s an indication that we’re making progress. And as I said before we hope to see that escalate as we exit this year and go into next year.
Michael Chu – J.P. Morgan
Just one last one. On the copper side with the continued weakness in memory pricing, are you seeing your customers shifting on some of the expectations for when they would start to ramp the use of copper interconnect? [Inaudible].
Douglas A. Neugold
Yes, I think we are seeing that. There’s a number of customers who are doing things that, we’ve seen indications that for some of the DRAM applications in copper. Some people appear to be pushing out their expectations more to the second half of this year than the first half of this year or rather next year; sorry about that. Sorry for misspeaking.
But I think there are several places where we see that happening. So I think that’ll impact the timing of copper. Uptake can be around next year, that’s for sure. Flash, generally the same sort of discussion in terms of people moving from development into HVM. I think it’s fair to say that probably half the people we’re tracking seem to be changing their plans for moving to HVM and they seem to be pushing it back into later 2009. I don’t know. That doesn’t really surprise me in this environment; I was waiting to see that come through. We’re seeing that in about half the cases right now.
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