Question-and-Answer Session
En-Ling Feng
Thank you, Richard. I would now like to open up the call for Q&A and please limit your questions to one per person. Operator, please proceed.
Operator
(Operator instructions) Our first question comes from the line of Steven Pelayo with HSBC. You may proceed.
Steven Pelayo – HSBC
Thank you. Thank you for taking my question. I guess, my one question would be really with your guidance. You are guiding operating expenses to increase from the $82 million range to the $90 million to $93 million range. I was expecting you to benefit from some R&D credit in the second half of this year. I guess, does your guidance imply any R&D credits grant in the third quarter? And if it doesn’t, then do you assume that the fourth quarter, you could have a very large, maybe even a positive R&D number, net number to help you? Help me understand what’s going on with R&D credits and what’s in the guidance and what does it mean for the fourth quarter too? Thank you.
Richard Chang
Thank you, Steven. Your question is very, very good. Yes, in Q3, we did not book any R&D credits or subsidy for this moment. The reason is we have been approved by the authority to start a lot of R&D projects, already getting started. But the funding, releasing of the funding still takes a while for completing all the paperwork. We are not so sure either whether Q3 we’re going to receive those or not, so we did not book any. However, in Q4, we expect we are going to receive it. So your expectation, I believe, is correct. Definitely by the end of this year, we’re going to receive a significant amount of R&D credit grant and subsidy. Thank you, Steven.
Steven Pelayo – HSBC
Thank you. Just a follow-up. So, it seems like excluding any R&D credit, you spend about $50 million a quarter in R&D. Help me understand how much credit or funding you could get by the government in the remainder of the year, whether it’s in the third quarter or the fourth quarter. What do you think the total amount would be?
Richard Chang
As we mentioned, the total amount is very significant but distributed in three years because it takes time to complete all the documentations. Just for a rough estimate, I expect at the end of this year, we should be able to receive maybe $50 million or a little bit more.
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