Question-and-Answer Session
Operator
Thank you, Ms. Cotter. (Operator Instructions) Your first question comes from Uche Orji - UBS.
Uche Orji - UBS
Let me just start off by asking you about the ASP and the gross margins. In the quarter that just ended, given that almost 10% of the revenues came from the sale of already written-down products, can you just help us quantify the ASP decline and how it will improve next quarter? Similarly, for gross margins can you tell us ex the impact of the inventory of written-down products, just give us an idea. I mean, you have a sense of the revenue, you know all the drivers; give us a sense of how the gross margin should trend for next quarter.
Dirk Meyer
I'll give you the big movers and Bob can maybe chime in.
Three big elements that give us an opportunity to improve margins next quarter are, one, capacity utilization; two, an improvement in unit cost as a result of selling more 45 nanometer product, and three would be mix and the positive improvement that a richer mix would have on ASPs.
I actually think the two items I listed are going to be, you know, we plan to be the bigger movers of margin improvement.
And Bob, maybe you can provide some color on the just-closed quarter.
Robert J. Rivet
Yes. I think Dirk summarized it quite well. Clearly, those were the big impacts in the quarter.
Again, that inventory that we sold that we reserved in the fourth quarter, again, we took a cautious position in the fourth quarter and reserved a lot of inventory that we'd built up at that point in time. While the accounting says we actually have to show you and display how much we moved in a given quarter, that was still very good product in that period.
Our plan is we'll replenish that product. We've built new inventory, so it's not we don't have the product to sell in the go forward quarters.
Uche Orji - UBS
So let me just continue down, Bob, to some specifics of this. So utilization rate goes from what level in Q2 to what level in Q3? And just for me to know whether that implies 200 basis points extra gross margin.
And then the mix on 45 nanometer, any specifics as to what the differential is between 45 nanometer product margin and 65 nanometer product margin so we can just quantify the delivery better?
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