Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from the line of Uche Orji with UBS.
Uche Orji – UBS
Just very quickly, two parts to one question -- the first is when do you think that Virtex-6 will be ready for volume production and for transitioning from initial R&D wins from your [customers and start to go for volume]?
And then secondly, following on top of that, when do you think that we shall start --what will be the -- when should we start to think about your 28-nanometer development and what impact will that have on your R&D say next year?
Moshe N. Gavrielov
Okay. Well, we -- no, as I mentioned, we are doing really well on all of the deliverables in the Virtex-6 and Spartan-6 programs are on schedule and they are expected to move into production by the end of this fiscal year or earlier.
And then obviously we do all of the programs staggered in time, so we are working on numerous generations of products in parallel and so the next -- we are working on the generation beyond the 40-nanometer as we speak and most of our engineering resources have already moved to implement the new generation of product.
Uche Orji – UBS
And just one quick follow-on to that -- John, if I look at your gross margins, you are guiding 62 to 63. You know, as we start to see recovery in some of the higher gross margin areas like industrial, should we not expect to see a higher fall-through to gross margins or -- what are the things that are going on within gross margins that drive the high end or the low end of that guidance? Thank you.
Jon A. Olson
There is a lot of dynamics going on right now, particularly one of the things we’ve learned in the recession is there isn’t anything that’s typical about much of what’s been going on in our business from a lot of perspectives. And in margin, in the margin area, we certainly have been impacted by a customer mix situation in this recession, meaning the small and medium sized customers have not -- you know, went away in larger percentages and proportions than the large customers. And this quarter we saw a slight improvement there, meaning that we got some business increase disproportionately from the medium-sized and small customers and I think as that mix improves, assuming it does depending on how the recovery of the recession is, I think that’s going to be an upward pressure on our margins.
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