Good day, ladies and gentlemen, and welcome to the Second Quarter 2012 Marvell Technology Group Ltd. Earnings Conference Call. My name is Chanel, and I'll be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to Mr. Sukhi Nagesh. Please proceed.

Thank you, Chanel. And good afternoon, everyone. Welcome to Marvell Technology Group's second quarter fiscal 2012 earnings call. I am Sukhi Nagesh, Vice President of Investor Relations. With me on the call today are Sehat Sutardja, Marvell's CEO; and Clyde Hosein, Marvell's CFO. We will all be available during the Q&A portion of the call today. If you have not obtained a copy of our current press release, it can be found at our company's website under the Investor Relations section at marvell.com. Additionally, this call is being recorded and will be available for replay from our website. Please be reminded that this call will include forward-looking statements that involve risk and uncertainties that could cause our results to differ materially from management's current expectations. The risks and uncertainties include our expectations about sales of new and existing products, including statements about our TD, HDD, and the SSD products, statements about general trends in the end markets incurred, statements regarding our financial predictions for the third quarter of fiscal 2012, and our expectations about long-term growth. To fully understand the risk and uncertainties that may cause results to differ from our expectations and outlook, please refer to today's earnings release, our latest quarterly report on Form 10-Q and subsequent SEC filings for a detailed description of our business and associated risk. Please be reminded that all of our statements are made as of today, and Marvell undertakes no obligation to revise or update publicly any forward-looking statements. During our call today, we will make reference to certain non-GAAP financial measures, which includes stock-based compensation expense, as well as charges related to acquisitions, restructuring, gains and other charges that are driven primarily by discreet events that management does not consider to be directly related to our core operating performance. Pursuant to Regulation G, we have provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures in our fiscal second quarter earnings press release, which has been furnished to the SEC on Form 8-K, and is available on our website in the Investor Relations section. With that, I would now like to turn the call over to Sehat.

Thanks, Sukhi. And good afternoon, everyone. Today, we reported second quarter fiscal 2012 revenues of approximately $898 million, reflecting a 12% sequential increase from the prior quarter. We delivered non-GAAP gross margin of 58.1%, non-GAAP operating margin of 26% and non-GAAP earnings per share of $0.38. We generated free cash flow of approximately $235 million equivalent to a 26% free cash flow margin. Our revenue results were at the high-end of our guidance range, and we continue to deliver strong profitability and cash flow generations driven by revenue and share growth in all of our served end markets. The key message that I want to give you today is that Marvell is executing well on all of its new product initiatives, which will increase our market share and contribute to our growth. In addition, and consistent with our plan to return value to our shareholders, we continue to repurchase our shares. As you know, our board has recently increased our share repurchase authorizations by an incremental $500 million, bringing the total amount authorized to $1.5 billion. Now let me summarize our results across our end markets. First, in our mobile and wireless end market, Q2 revenues increased approximately 18% sequentially and represented approximately 26% of our overall revenues. The sequential increase was driven by growth from our new products such as PD in China, and seasonal growth from our wireless connectivity solutions. We believe the headwinds that faced our mobile and wireless end market in the prior quarters are mostly behind us, and we expect to make solid progress moving forward. I would once again like to reiterate that the mobile end market is very important to Marvell, and we remain focused on both growth and expanding our customer base. We have made significant progress in the development of the…

Thank you, Sehat. And good afternoon, everyone. As Sehat mentioned, Q2 revenues for fiscal 2012 came in at approximately $898 million, representing a 12% sequential increase from Q1 fiscal 2012 and up slightly from the same period a year ago. Our overall results were at the high-end of our prior forecast. As Sehat indicated earlier, we delivered strong profitability and growth in all of our reserved end markets. Our non-GAAP gross margin for the second quarter was approximately 58.1% within our earlier projected range. Our overall operating expenses for the second quarter on a non-GAAP basis were approximately $285 million, in line with the midpoint of our guidance. As compared to the prior quarter, overall expenses increased 2% and were up about 10% in the same period ago, with the majority of the sequential increase coming from increased spending on R&D in preparation for the launch of several new products, most of which are tiny geometries, which are more expensive. R&D expenses for the quarter were approximately $227 million, up about 2% from the last quarter and up about 11% in same period a year ago. SG&A expenses for the quarter were approximately $57 million, a 2% sequential increase from the prior quarter. This resulted in non-GAAP operating margin of 26% at the midpoint of our guidance. While we are funded our new growth initiatives efficiently, we also continue to manage our expenses in order to deliver industry-leading operating profits that investors are used to. Interest expense and other income was $2 million, in line with our expectations, while non-GAAP tax expense of approximately $4 million was slightly above our prior forecast. Our non-GAAP net income for the fiscal second quarter was approximately $233 million, or $0.38 per diluted share, at the upper end of our earlier projection, and a…

[Operator Instructions] And your first question comes from the line of Glen Yeung of Citi.

Good results. My first question -- slightly multi part here but it's big picture oriented. Obviously we're seeing a lot of macro issues in the stock market these days. And my question is, have you seen any direct impact of that in your fundamental business? Maybe you can respond to that by addressing linearity in the quarter. And the second part of this question is for you, Clyde. I think back to our conference back in -- I guess it was '08 when things were a bit choppy, you could obviously see it. I wonder if you could compare and contrast what you see now to what you saw then.

You're bringing up those dark times again.

Unfortunately.

Let me address your questions. In terms of direct impact of business, I think probably the biggest area you see it with us is in our storage end market. I think, Glen, you would, and others would agree, typically in the September quarter, you would see probably high single-digit-type sequential growth in PCs and drives. And I think after listening to customers and other people in the PC food chain, people are looking at more low to mid single-digit type of growth. So that's probably the biggest area of ours, and that's one of the biggest contributors to our flattish guidance. The other being we shipped earlier in the July timeframe, which is reflected in our Q2. The second part, beyond that, I think if you listen to all of our other customers, there's a lot of apprehension back about the macro results. Nothing major to see other than the area we mentioned. But there seemed to be a lot of it. Our linearity last quarter was a lot better than in previous years, which is one reason our DSO was better. And to your last point on macro, there's a lot of differences compared to 3 years ago. One, as I think, as you said in the market, and a number of people, companies participating in this space, people are already reflecting macro environment. So I don't think you'll see the shock effect as you might see 3 years ago. As you recall, at your conference 3 years ago, we were a canary in the coal mine. I don't think that's happening now. That's been fairly reflected. The biggest -- so I don't think you're ahead of a credit bubble. I think this is more of a consumption demand, the biggest issue likely being various government debt in the world. So as soon as we rationalize or get our arms wrapped around that, I think you will see a better environment. So probably more subdued, nothing near as bad as we would characterize it 3 years ago. And then, with respect to Marvell, we are always cognizant about these macro environment, how it affects our business and our preparation for it if that happens today. So I don't see the same thing happening compared to 3 years ago. I think it's probably going to be a better -- certainly compared to 3 years ago, it's not a good environment. I think we'll be better off in that period of time. What we are doing at Marvell and what we expect to deliver is a fair amount of share gains from either new product or existing products in the market and that's what the team is focused on. That's where we're making our investments, and that's where we intend to take it.

That actually segues well into the next question, which is thinking a bit longer term, and by that I actually just mean 2012. If you look out into that year and think about the opportunity that you see in the mobile and wireless space non-RIM and the opportunity that you see at RIM. How should we think about the relative growth rates of those two things? And when does, or does RIM become kind of irrelevant in the context of the overall mobile and wireless business?

Well, we don't compare a comment on specific customers. And I don't think that customer would ever be irrelevant. They will be every bit as relevant as they have been, granted there's some headwinds there. Our dependence, however, on any single customer in the mobile space today is much lower than it was at any given period since we bought this business 5 years ago. So as Sehat mentioned earlier, we are ramping up on TD. That's beginning to do very, very well. Marvell is really acing it on the smartphones part of it. We mentioned earlier, we've got price point as low as $100. This is unsubsidized into the channel. We believe that there's a huge demand for -- a huge inflection point for low-cost smartphones, and we believe we're delivering that in this space. In addition to that, we are on the cusp and inflection of non-TD Android-based smartphones. There's a couple that we expect to come out, we had said second half of this year, that's still on track. So you'll see that probably in the next quarter or 2, you'll see very [indiscernible]. So our customer concentration, where we are positioned today is much, much better than it was at any point in our history, and that's because of the great work the team has done in terms of technology and customers.

Okay. I think investors should not discount RIM. We continue to work closely with RIM in delivering new solutions. They will make the product to look really, really nice, and better performance as well. So don't discount that. Don't discount it at all.

Your next question comes from the line of Harlan Sur, JPMorgan. Harlan Sur - JP Morgan Chase & Co: I would assume that much of the growth in your TD business has been due to the channel fill and shipping to China Mobile. Sehat, what's kind of the read through on demand and sell-through of either the high-end Android or OMS-based TD phones thus far?

So as we said, we are the first to work with our customers to deliver $100 TD smartphones. This is unprecedented. Just about a year ago, these phones are selling for about $400 to $500 because they are based on multiple chips in a system and requires a very complex implementation. As the price gets to the $100 price point, the demand actually is increasing rapidly. This is what we expect to see. And we projected this was going to happen, and we're seeing that. We're seeing the customer demand is increasing. And also as more and more of these products qualify by China Mobile to be released into the market, we expect the volume will continue to ramp. So we're talking about phones there that are not much higher than a low end -- I mean, like a high-end feature phone. Maybe even a similar price point, just if you take into account of the touch screen feature phones. Literally, there's not much difference in the bill of material to build those higher touch screen feature phones because these smartphones that we're delivering. So we are very, very optimistic that more and more -- the success of many of these customers will lead to other successes. Harlan Sur - JP Morgan Chase & Co: Okay, great. And then my follow-up question, obviously your networking business, once again, sort of outperformed the market in Q2. I think you guided for growth again in the third quarter. Does the team still anticipate this segment growing in the mid-teens range this year, which would imply further growth in the fourth quarter? And then, you've articulated some of the growth drivers here. How much is the 10 Gigabit Ethernet transition contributing to this growth?

I think you're talking about 2 different market segments. One is the enterprise segments, where the 10 gigabits are starting to become bigger -- not bigger, tends to become more sizable in terms of volume. It's still much smaller volume compared to the gigabit segment. But as people are building this bigger centers, building server farms, those 10 gigabits will become more important. So we are playing into this market. We have 10 gigabit drives and 10 gigabit switches. We just recently introduced our super high port count. 10 gigabit switch on a single chip, on a single chip, the highest in the industry. So we do expect to play -- to gain market share in this area. But the other segments that we talked about in the prepared statement is in the PON. So as many people are aware, okay, Marvell, okay, historically, never play in the segments of cable modem or DSL, ADSL or VDSL, because we didn't enter into the telecom side of the market until recently. Our first entry into this market is through our investment in PON. Specifically, we decided to lever off the market by integrating powerful processors in EPON and GPON, and all the voice processing, the switching functionality, everything in the single chip. And the result is now becoming evident that, okay, we're getting very good traction into the market in China. We are getting tier 1 engagements. You see the Google ramp, the Google deployments of PON. They were the first one in the world that deploy 1 gigabit per second per user. This is like unheard of. We're talking about multiple about most people, they have ADSL running in like half a megabit or 1 megabit, or maybe if you're nearby the office, the telephone office, telco office, maybe you can get several megabit per second. And even if you have VDSL, if you're lucky enough to be living nearby those remote field, you might be able to get 45 megabits per second with VDSL, if you're lucky enough. We're talking about orders of magnitude of higher throughput in optical. And we're seeing this, okay, in a lot of parts of the world, developing world, where people are now deploying mainly just optical because optical will be -- the optical networks in the wide-area networks will be the technology for the next 100 years. Whatever you put, invest in on the ground, will stay there in the next 100 years, while copper is already at the end of its life. So our growth into the networking space in one sense that we will be better than the market because we have good tractions in the PON and we also -- the PON is also naturally is replacing ADSL and VDSL and cable modem because of its sheer physical advantage, physics that is so much better than copper. And I guess it's a longer explanation.

Your next pendulum comes from the line of Sanjay Devgan of Morgan Stanley.

I just had one question -- a couple of questions, I guess. First question is, you guys recently -- made your first foray into the tablet market. It was -- I believe it was a VIZIO Tablet launched through Costco. I was wondering if you can give us any color on kind of what the initial uptake or feedback has been around that device.

Clyde, why don't you take that?

It's still early, Sanjay, you pointed to our first foray. The price point is, we believe, is very attractive. So it's geared for people who perhaps cater for the higher end ones. And that price has been coming down, and expected to come down in the future, and as we develop more and follow-on products. So initial reaction is very good, but it's still early. And I don't think we want to make too much out of it at this early stage in the game, but it's, I think, price performance in a very good place.

Okay. And then, just as a follow-on, Clyde. You talked about the margins, the headwinds that the raw materials cost, specifically gold, going up to $1,700 an ounce as being a headwind of about 1.5%. I was just wondering if you could talk to the conversion to copper, some of the technical issues around that and what the timing is, how quickly you think that migration can be made?

There's a number of issues, technical issues, but I think the team is doing a great job getting over that. The bigger issue has been more customer apprehension about performance when you go from gold to copper. Because of the prices begin to reduce that apprehension, getting a lot of support from our customers to move into that transition. So the technical issues, they're still there, but they could be and will be overcome, especially on the higher performance ones, there's always those. But we are moving ahead as fast as we can, and as I indicated earlier. Either gold prices will come down from the current levels, or transition a couple of things. So this is headwind that we expect to grow with.

Your next question comes from the line of James Schneider, Goldman Sachs.

Clyde, I was wondering if you could give us an update on the visibly you're hearing from your customers right now? First of all, can you talk about what your backlog coverage is this quarter versus what it was last quarter? And then any kind of read into early in Q4, where you think that's going to be down seasonally like you talked about last quarter or maybe not so much?

Yes, visibility I think reflects what -- I think Glen asked earlier, people are more apprehensive, I think. But the backlog coverage, I would say is probably about where it is historically. We went through a number of periods. I don't think last quarter is a good quarter because if you recall we had that earthquake event last quarter that created probably a bit of backlog. So that's probably not a better comparison. But if you look at historically over, say 10 quarters, and you look at a range of it, probably within that range, maybe a little bit higher end of that range. So I don't think visibility is as much of an issue. And then in terms of seasonality, if you look at a couple of things, our broad market, you're going to buy because it's a broad business and some of the new products. So our broad business probably speaks a lot into a lot of consumer-centric products, whether it's PC-based or gaming systems and printers and the like. And they tend to have good July quarter and October quarter build patterns, and you've seen that in our results and our forecast, and then it falls off as it did last year. So broad end markets, I would see that declining a few percentage points at the top level. However, there is -- as I have indicated earlier, there's a fair amount of new product coming into the market, which would be offsetting to that. The extent of that offset is tough to predict at this point in time, especially with new products. But we do have a hedge, whether it's a normal seasonality, whether it's some moderate effects on macro. We do have a hedge from some of these new products and share gains, so I think we'll do okay.

And just as a follow-up. On the capital allocation front, notwithstanding the extreme volatility in the market recently, you guys have done a very good job in terms of returning cash to shareholders via buybacks. Can you talk about, going forward, what your preference is, more buybacks dividends, M&A? Do you still feel the same as you did a couple of quarters ago?

Yes, we do. And we believe in all 3 -- the good news is we have a very strong balance sheet. We have enough to buy back over $1 billion. We still have about $2.5 billion in cash and generate about $0.25, $0.26 on every dollar in free cash flow. So we feel very good. And because of that, we can partake in all 3. So we've done, because of the performance of our staff, we've centered around buying stock back. I think that will continue. We have another 500 authorized. We intend to fill that in. I think M&A in this environment is certainly an opportunity with valuations lower that brings a number of product IT-type things into our valuation, and my valuation is fair, so I think that's certainly a possibility. And we discussed dividends in the past and I think that's still on the table. It will be on the agenda item on the next board meeting and we'll just leave it like that. So I think we have the luxury of being able to address all 3 of those issues at Marvell. And we intend to look at all 3 when it makes sense and we have the ability to do it.

Your next question comes from the line of John Pitzer, Crédit Suisse. John Pitzer - Crédit Suisse AG: Clyde, clearly, you guys have some product cycle company-specific drivers that are kind of offsetting some of the macro headwinds out there. I'm kind of curious specific to the TD business. Can you help us quantify what percent of mobile wireless it is today? And as we think about kind of the market opportunity here, where do you think that can go over the next several quarters?

So it's a small part today. It's just getting started and we think, as I have indicated, we think it's a huge opportunity. We aren't disclosing any, whether it's TD or anything but specific segments. But it's a small percent of the total today. And looking forward, a lot will depend on the consumption rates in China. We are opening up -- or there is a lot more channels opening up in the next few months, so I expect that to pick up. Especially wide-box channels in each of the provinces that open up with these phones. So that should expect to pick up. Tough to predict. We think it's a huge opportunity. There is several hundred million people who at the right price point, a significant percent of them should convert. But I think the next few months would tell us better. So we firmly believe and continue to believe that these smartphones at this price range, again $100 at the low end unsubsidized, we're already there within 2 quarters of introduction of the technology. We think that's an inflection point for demand. It's hard to predict what the next 2 quarter's demand is going to be. They sell-through today, some of our revenues for the quarter is already on a sell-through basis, granted some of it is in channel. But some of it is already sell-through. People have phones already, users, and we expect that to accelerate. But the penetration rate since the new market, new country, new set of users, difficult to predict near term. We are bullish in the long haul.

But in the long run, I think every time you ask for a short-term, a quarter, 2 quarters, I consider short-term projection. That's very hard to project ramps. They can be -- where the slope could be 10% slope, or 5% slope, or 15% slope. So those kind of projection is extremely dangerous to provide. But what we believe internally is that when you -- when China Mobile has 500 million plus -- or 550 to 600 million subscribers, okay, we can model whether it's, okay, 2 to 3 years from now whether the 30% of it will be TD smartphones. Is that going to be 40%, is it going to be 30%? Now this is a kind of model that we can play. Of course everything is based on the price elasticity. So if the price goes to $100, how many percent do we expect this thing to be maturing at. When price goes to $70, what does it mean? And I don't see any reason why this thing cannot be $70 in a year or so from now, for example. So we are bullish in the long run. Just a short term look, it's very hard to say exactly what that slope begins to look like. John Pitzer - Crédit Suisse AG: As my follow-up, Clyde, going back to the hard drive business, you talked about a product transition at an enterprise customer in the October quarter. I wonder if you can just elaborate or maybe quantify how much growth that that's taking off of the business in October? And then you guys have typically had a pretty good read for inventory in that business and for the beginning part of the year there was an inventory drawdown that hurt you guys. What do you think inventory is for drives in general, and for your chips that go into those drives?

First of all, it's probably a couple of percentage points in terms of revenue headwinds. Timing is probably yet 18 months. We've already delivered the follow-on. This is typical cadence of that customer. We've delivered a follow-on technology, goes at one node to another node from supplier to supplier. We've already -- for 6 months now have delivered the next generation product that we believe are working very well. So we think this cadence is probably shorter than typical. We've had this node for about 3 years now. We think the next transition will take less than that before it comes back to Marvell.

By the way, this is the same technology that goes in the 500 gigabyte, 2.5 inch drive, except this thing is just running at much higher cost frequency.

As far as inventory, I think people are a lot more cautious, John. Our inventory grew. Part of it was for new products. Part of it is ahead of seasonality. And some of it is inventory, which we expect to consume in the next quarter or so. It was cautionary from the Japan earthquake. So but and we're holding that. We know what there is, it's new products. It's not risk of spoilage. We expect that to be consumed. That's better for us because we've got a better handle on it rather than it being in the channel out there. But short answer to your question is, I think channel inventory to us appears in pretty good shape. And so we feel decent about that.

Your next question comes from the line of Ross Seymore, Deutsche Bank.

In the Mobile and Wireless segment, any sort of color on the split between the cellular and the Wi-Fi side? And really what I want to get at is the seasonality in Wi-Fi seems to be pretty volatile. So how should we think about that going forward as you get towards the end of the calendar year and into 1Q?

We don't break out the details within Mobile and Wireless, but I'll answer your seasonality, like I did earlier. I expect, in our Wi-Fi a fair amount of our products today, in gaming systems, printers and some cameras. So the build pattern for those is somewhere between May and October, which was our July and October quarter where a significant amount of the product is built to be sold to back-to-school season and Christmas season. And then it falls off again probably for about 5, 6 months period after that. So in wireless, you'll see extreme seasonality. We've talked about it for several quarters, and in Q4, I would fully expect to see some extreme seasonality in that product, which contributes at a Marvell level of a few percentage points decline from an end market point of view offset being new product improvement. So that's probably the best we can quantify for you.

One quick follow-up. In looking at the gross margin side of things, Clyde, you went through a lot of the costs, the reasons why it's kind of come down a little bit. But just curious with the new products ramping, how do we think about product mix as far as what it means to gross margin going forward?

I indicated 1 of the 4 items is mix. I would say some of the -- in mobile and wireless, probably is one of the areas that you might early on, might be mix. So that's probably where you might have weaker mix, and that's going to change from time to time. Some early days, you might get higher margin and as product gets mature. But as I also indicated it tends to drive cost down as well. So mix will help. The bigger issue, I think, is the other 3 issues I indicated.

Your next mission comes from the line of Uche Orji of UBS.

Clyde, let me pull a little bit into the Android handset design wins. First question here is what type of price points are you aiming? Is it close or the same as TD? And what is the silicon content that you have in this Android handset? I understand the TD handsets includes, not just baseband and match processor, but also RF PON management and Wi-Fi bridges. So if you can talk about your content here in the Android phone, what kind of price points you're aiming for. And what regions, quite frankly, are you going to be shipping at this point? Is it North America, Europe, or emerging markets?

The price point is really up to the customer and I think I'll let them define that. Where we do well at Marvell, and so this is somewhat of a lead into it, is the high volume lower price point smartphone. So that gives you an indication of where that's likely to happen. In terms of geographies, we did mention, I believe, Sehat mentioned in his prepared remarks that the initial deployment would be in Europe, South America and Asia. Those are the 3. And you're looking at very populous countries, and so that correlates with the price point. In terms of content, we have the CP [ph], which is a motor match processor. We have Wi-Fi, power management RF. But not every one of the solutions have all of those, but they have multiple Marvell chips in all of those designs.

Okay, that's helpful. Let me just ask you about the TD LTE transition, Clyde. You said they will be some at the end of this year, if I heard you correctly. Will those be phones or will those be downloads? And as you speak to China Mobile, how do they balance the transition to TD LTE with the extensive investments they've made in TD-SCDMA? And also related to that, should we anticipate that coming into Chinese New Year, now that they have some smartphones, there will be an aggressive proportion for TD, given that it hasn't really done so well, so far, in China?

Let me start and then I'll turn it over to Sehat...

I'll take care of the LTE stuff.

Let me refute this, it hasn't done well. That's probably more misnomer. The smartphone piece of it, which is the piece, which is the piece we participated in, yes, it hasn't gone to tens of millions of units, but if you look at any deployment, quite frankly, of 3G in any network, this -- it usually takes a quarter. I am very confident this will be faster than a typical 3G deployment in terms of that. As far as the TD LTE and dongles, we'll deliver the chips to customers end of the year. They have the choice to put it in dongles or phones. I think that's from an end device, probably more in terms of 2013, although there's a lot of noise out there. And I'll turn it over to Sehat to add about TD LTE versus regular TD. I think he is, by far, the expert in this country on that.

Well, yes, TD LTEs, as you should expect in any new deployment, the dongle will definitely will go in first. It's easier to qualify the dongle. But the biggest volume, obviously, is not in dongle, the biggest volumes will be the handset. And when you go to the handset, more likely you will go into the highest end, highest price, the high-priced handset. So that will be, more likely, the phase-in of the TD LTE. So nothing surprising. So, okay, the key is, okay, over time, is to build lower price higher integration single-chip solutions to get to the mass-market TD LTE. So don't expect that to happen, the volume to ramp up on the mass-market any time in next year. But to get a TD, as you say, China Mobile is really investing huge amount of dollars and resources in the infrastructure, base stations, several hundred -- more than 200,000 base stations deployed with TD-SCDMA. So those are the ones that most likely to be ramped up first, okay, and then follow a certain selected cities -- I mean, maybe not in every part of city, but like certain, in maybe the downtown area, where maybe they will start deploying a trial TD LTE deployment to test the system. Well, maybe, I don't know, a year or so before they were all moved -- before they all spread it out to the more major market. So we have nothing surprising. These things will have its own course. The key for us is to think we work very close with China Mobile, also, to make sure they have our specifications for the TD LTE is what they need.

And we'll be prepared either way, so it will be somewhat agnostic.

Your final question comes from Craig Berger, FBR. Craig Berger - FBR Capital Markets & Co.: In the solid-state drive market, can you help us understand how big that is today and who your top customers are?

Referring from the second part, because we don't give specifics. What I would say on customer side is we are working with all of the flash manufacturers, or certainly all of the significant ones, a vast majority of them. There's been a public announcement from a few customers, we can [indiscernible]. In terms of size of the market, it's relatively small. It's sub-$100 million. Now if you're looking at SSDs in terms of disk drives, we're not talking about flash memory in things like tablets or phone-type market, which is a future potential for us. So the PC-centric part of it is probably a sub-$100 million TAM. However, Craig, there's a fair amount of excitement driven by a lot of thin PCs coming out there. We'll participate in both sides of it, with disk drives, 7-millimeter drives as Sehat mentioned, and in SSDs. Most of those new drives are expected to be at 6 gigabit processor speeds or faster, and we intend to get the lion's share of that. A lot of that design is probably, I'd say, a couple of quarters before ramping outside of China for the next -- for Christmas. But next year, I think you will see very healthy ramp from those design wins. Craig Berger - FBR Capital Markets & Co.: Great. Just as a follow-up, can you guys review where you stand with mobile Wi-Fi, mobile connectivity? Is that still a priority for you? And also, same question on not TD LTE, but just traditional LTE.

On mobile Wi-Fi, we have -- all of our TD phones are ramping with our Wi-Fi. You see customers looking for solutions, plus ones, if you may. So we have a mobile platform where we sell a number of technologies into that, including Wi-Fi. So all of our TD phones have mobile connectivity in it, mobile Wi-Fi, including other components. The Android-based phones for the most part, although I can't say absolutely exclusively we have all of the Wi-Fi, but I believe all of them do have our connectivity. And I think that's how we'll deploy into that market. In terms of standalone Wi-Fi, there's nothing to bring to market yet, or bring to your attention yet. We are having engagements with customers, but nothing to announce yet. So our Wi-Fi connectivity in handsets is really where we are selling platforms, whether it's an Android-based platform or a TD-based platform.

I want to add a little bit more on this. I believe the reason you're asking question focused on, absolutely we are focusing in building even more advanced Wi-Fi. We talked a couple quarters ago, you probably heard about beamforming. Again, this is technology that will be needed in the future for all the phones. Why is it important? Eventually, if we believe in Moore's law, eventually, we need to integrate every modem technology, whether it’s called LTE, or FDD LTE, or CDD LTE, or 3G, or TD-SCDMAs, Wi-Fi, or beam forming Wi-Fi. Anything, okay, all these things will be needed. And then eventually, they're going to be integrated into one chip. So it's just a matter of time. If it's not feasible to do it today, maybe next year. If it's not feasible next year, 2 years from now. But you don't have to wait for 5 years to see this to be integrated. So this is the reason why we have to invest in all these technologies, okay? So we are not backing off, no. So related to FDD, LTE, or TDD LTE, we have already sample FDD LTE, so we talked last quarter. So what we're talking about the TDD, is that the LTE and the TDD, is we're we have to wait for that sample at the end of this year, specifically related to the requirements that China Mobile are putting into the marketplace.

That concludes the Q&A session. I would now turn back over to management for closing remarks.

Thank you, Chanel. And thank you, everyone, for your time today and a continued interest in Marvell. We look forward to speaking with you in the coming months. Thank you, and goodbye.

Okay, thank you.

Ladies and gentlemen, that concludes the presentation. Thank you for your participation. You may now disconnect. Have a great day.