Question-and-Answer Session
Amada Anani (ph) - RBC Capital
This is Amada Anani with RBC Capital. I just had a question about your guidance. It looks like we're talking about 7% sequential growth. Historically it seems to be sort of flattish in the September quarter, can you just talk about from an end-market perspective what is going to drive that growth, and the best you guys can gauge, can you talk about how much of this is end-market demand versus inventory replenishment.
Martin P. Slark
Let me answer the last bit first of all. I think the last bit about how much of this is end-market demand is very hard to judge. What I think we are seeing is a combination of inventory being restocked because clearly if you look at some of our vendor inventory programs around the world, the number of days went down to a very low level and distribution inventory, which we get visibility through our computer system, were very low as well.
And you've seen, as I said earlier, I think a certain amount of demand is being driven by these incentive programs. Now the question is, does that keep going when the incentive goes away? I mean clearly people in the US today are replacing cars which they weren't doing a few months ago because of the Cash for Clunkers program. How long that program continues is up to Congress I guess.
So my sense is, and I think you all have a better feel on the global economy than I do, is that consumer sentiment is getting a little better, particularly in North America. And the people — simple things are looking at their 401(k) and their not plummeting down so I think the whole psychology is starting to change a little bit and I think that helps.
And I just spent a couple of weeks in Asia and there's no question in Asia that consumer sentiment is a lot stronger. So I think some of what we're seeing is the environment getting a little better. It certainly stopped getting worse, but I think the speed of the recovery that we've seen in terms of sequential increase, some portion of that is clearly a correction from the inventory issue so I think it's a mixture of both, and honestly I think we're going to have to — that's why we really gave a quarter's guidance. I think we have to look at quarter to quarter and see where it goes.
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