Question-and-Answer Session
Operator
Thank you. (Operator instructions) Gentlemen, your first question will come from the line of John Vinh with Collins Stewart. Please proceed.
John Vinh – Collins Stewart
Hi, good morning. The first question is on OpEx. You guys obviously talked about a number of cost cutting initiatives going forward, but also stated that you will continue to invest in R&D in this difficult environment. Can you maybe comment about timing of some of these cost savings initiatives and the net impacts on OpEx going forward? How should we be thinking about OpEx going forward at this point?
Keh-Shew Lu
Well, from the OpEx point of view, we must focus on the manufacturing because we still want to maintain investment in R&D and so therefore we are cutting SG&A and manufacturing and like I mentioned, we are setting down 4-inch lines which will help us to improve the GPM and we reduced about 10% of the fab cost in Oldham and then we reduced about 25% of the workforce in Kansas City, FabTech, and all those will reduce SG&A at the same time improve the TPM. But, probably not Oldham quantity reflect in the fourth quarter because like I mentioned Oldham won't be done until end of the year and FabTech probably done today and therefore probably only affect half the quarter. So I think that's what we think and we will get the full benefit starting from 1Q next year.
John Vinh – Collins Stewart
So should we be thinking about OpEx over the next couple quarters being flat to slightly down then including G&A and R&D?
Keh-Shew Lu
I'm sorry, you said – it would be, yes, it will be – fourth quarter will be slightly down and then 1Q next year will be fully impact the benefit, or fully, they will get the benefit.
John Vinh – Collins Stewart
Right, okay. Next question I had is can you give us a little bit of color on the relative performance and outlook on the Zetex business relative to the core Diodes business? Was the Zetex business also impacted quite similarly relative to the core business?
Keh-Shew Lu
Yes, we both get impacted because Zetex is 50% or it will be more than 50% is still in consumer, in Asia markets, which get impacted and then in Europe, they're very strong in Europe, and Europe is actually going down quite much too especially their automotive business went down, so Zetex impacted just as well as our core business and therefore in the first quarter, we focus throughout 20% down. It's actually both business get impacted.
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