Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from Matt Robison with Wedbush.
Matt Robison – Wedbush
Hi, guys, good morning and congratulations on the good quarter. First of all, on these -- what you described as a catch-up, can you give us a better sense as to over what period those shipments occurred that you accounted for in the second quarter?
Yaniv Arieli
Yes, this is few years. This is a regular audit that we have conducted, and the catch-up royalties have continued to be regular course of business in the IP space. We audit our customers every once in a while and encountered a mismatch in the calculation which was fixed and will continue in an ongoing basis based on this new calculation.
Matt Robison – Wedbush
Was this a consumer-type of an application or more of a cell phone type of a deal?
Yaniv Arieli
More consumer type.
Matt Robison – Wedbush
Okay. And did you say that in terms of the gradual recovery in the back half, that was referred to licensing demand, is that what you meant to say?
Gideon Wertheizer
Yes, you know, it’s based on -- you know, the way we saw it in the second quarter is that company was basically very, very conservative in terms of opening new projects that will require a higher investment, including IP. And the tendency was to try to do evolutionary project, reels type of projects, cost reduction projects. Going forward to the second half, still visibility is not as it used to be, but we see the companies are looking more positively on the new projects. So the comment that Yaniv made was regarding licenses.
Matt Robison – Wedbush
Okay. And as far as the royalties go in the current quarter, most of your peers in the semiconductor space have reported a pretty substantial increase, sequential increase in the chip sets sold. And so that would normally be indicative of what you would recognize in the September quarter, correct?
Gideon Wertheizer
Yes, that’s absolutely correct. To give you a little bit of flavor, we’re a little bit early because usually we get most of the royalty reports like a 30-day rafter at quarter-end, and we haven’t -- we don’t have yet the full picture. But if you look at Q3 of last year, we had a royalty ramp-up of about 8% from Q2 to Q3. I believe that Q3 ramp-up this year could maybe be even twice as higher as the previous year. So that does take into account the same assumptions that you mentioned. Again, we don’t have the full picture yet, but I believe it should be significantly higher than the ramp-up we had in previous years.
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