Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Harsh Kumar - Morgan Keegan.
Harsh Kumar - Morgan Keegan
First of all, congratulations. These are very good numbers in light of everything that is going on in the economy.
Royalties, is there any [beatability] to this metric and is it quarterly or yearly? Can you give some color on that?
Charles Swoboda
The numbers we gave you are really the upfront license payments associated with these recent deals we announced. There is some small ongoing royalties that will vary depending on various factors, sales and other things, but they are relatively small compared to the upfront amounts.
Harsh Kumar - Morgan Keegan
And could you give us an update on the move to China? Where are you as a percentage sales or your metrics that you laid out for the year? And same thing for the four-inch conversion.
Charles Swoboda
In terms of the move to China, our big focus this year was to, obviously we wanted to get our standard XLamps over there and then get the new products transitioned. And the original plan was we announced both the XP and the MC products went into production over the last quarter. And our normal thinking was we would transition those over our Q3 and Q4 and by the end of the fiscal year we would be pretty much having them fully transferred, probably running dual production.
Given kind of the change in the plan, we are actually going to accelerate that and we will have both the XP and the MC products fully transitioned to our China factory within this Q3 quarter. So we are going to move that up by about a quarter. And that’s really a function of the last transitions have gone well and we just think we have an opportunity to go ahead and go a little faster than we originally targeted. And obviously there are cost benefits to doing that.
As far as the four-inch transition goes, we have continued to work on it. We’re really rolling through the different product lines, getting them qualified. I think we’ve got most of the product lines that have been through that process. We may have one or two that are left. But as we go through this quarter we will start to increase the four-inch percentage this quarter and really the larger increase will happen actually in Q4 with the goal being that we will exit fiscal 2009, or the June quarter, with the majority of the high volume products fully on four-inch wafers. That’s the current thinking as of right now.
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