Question-and-Answer Session
Operator
(Operator instructions) And our first question will come from Romit Shah with Barclays Capital.
Romit Shah – Barclays Capital
Thanks, guys, nice quarter. Abhi, just on the guidance and you’re forecasting a pretty solid Q4, but if I look at your semiconductor business it's still down about $100 million from the peak quarter in Q3, that's about 20% while a number of other companies are talking about getting back to parity this quarter. So just trying to understand that the delta. Is it attributable to just having a higher mix of enterprise exposure? Can you talk about legacy product roll-off, any thoughts there will be appreciated?
Abhi Talwalkar
Yes, I think there is a couple of things that contribute to that. As you know, not all companies are equal in terms of business composition, so you're right that the part of this is explained by our richer enterprise composition with 80% of our business influenced by enterprise or service provider or demand which we certainly saw a very strong pickup in the third quarter. And I think another contributing factor is certainly our legacy business in the networking space. I would say those are the two primary contributors to that. But in terms of our guide and how our guide compares with good proxies in the marketplace relative to enterprise on spending I feel really good about how we're guiding the fourth quarter.
Romit Shah – Barclays Capital
And then just in terms of your enterprise exposure, do you feel like this segment has some momentum going into next year and is it possible that we could potentially see better than seasonal guidance in the first half of 2010?
Abhi Talwalkar
Well, it's tough to call. I mean, we definitely expect a level of seasonality in the first quarter. And as our historical experience has been, we've seen a seasonal drop in the 8% to 12% range in Q1. Clearly, this environment is very different than the past. Hard to really determine exactly how it's going to play out. On the whole, relative to 2010, as we continue to see a gradual recovery in the economy, there are some positive elements that are developing and there's been a lot of discussions around Windows 7 and its potential benefit largely mid-2007 and beyond lot of companies discussed that as they've evaluated the product.
Storage demand continues to grow. There is, in general, a very aged population of infrastructure out there whether it's servers, whether it's networks that are over prescribed and as I said, storage continues to grow. So as this recovery sustains itself, clearly, that's question everyone is asking. I think enterprise spending will do fairly well because of those factors.
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