Wafer Starts Analysis
John Pitzer – Credit Suisse: Sanjay, I wonder if you could talk a little bit now that you’ve made the decision not to move forward with additional wafer starts in 2013, what were the puts and takes behind that? Was that really a function of looking at shrinks that could get to the capacity you needed, was it a more of a view on the supply demand environment for the overall industry and just remind us the bit growth that you are targeting this year and how we should think about 2014?
Sanjay Mehrotra – Co-Founder, President and CEO: The bit growth that we are looking at this year as we have said for the industry is in the range of 30% to 40% and the SanDisk’s bit growth is meaningfully less than the industry number that we have given you. Our decisions regarding growing our bits during 2013 are certainly, first, very much focused on technology transitions, because technology transitions really give you the lowest cost in most efficient way of growing the bits and provide the maximum the investments made in our technology transitions provide the maximum ROI on the longer term. So we prefer technology transitions to drive bit growth. When we look at capacity additions, the decisions that we really need to consider there for new capacity are of course the demand trends projected for the business and the industry environment, including the pricing environment that is expected in the future, the status of our technology transitions, the technology roadmap of the future as well as the ROI on the new investments to be made in new capacity. And regarding the ROI for new investment and new capacity, at this point it is very important to assess that carefully, because the NAND future technology roadmap beyond 1Z is not certain and the 3D technologies of the future are in still in early phases of development. It’s not clear that how much of the toolset of those 3D technologies will be usable and we’ll be common with the NAND memory production. Therefore, and the 3D technologies are also two to three years away from any meaningful production. That’s why it’s very important to assess the ROI on any new capacity at this point and we continue to favor investments in technology transitions for growing our biz. We feel very comfortable with plans that we have for capacity this year and our technology transition status for the future together with our focus on continuing to strengthen the mix of our business in terms of driving toward higher value solutions such as solid state drives embedded solutions as well our high margin retail business.
John Pitzer – Credit Suisse: Helpful Sanjay, and I guess as my follow-up is either for you or for Judy, you guys talked a little bit about your pricing expectations for all of 2013, just kind of curious given that we’ve just gone through what’s normally the seasonally weak period for pricing in the NAND market with much better results in the March quarter than normal. How do you think pricing trends from here on a sequentially basis?
Judy Bruner – EVP, Administration and CFO: No, I don’t want to give any specific projections of pricing on a quarterly basis, but I would say that our expectations are that the level of price decline this year in the industry will be lower than we’ve ever seen before in the history of this industry. So we believe that coupled even with much lower bit growth than we’ve also seen before is allowing us to strengthen our business in terms of growing the top line and growing the bottom line and delivering strong cash flow. So we really feel very good about the business model that we are able to drive. Even with much more modest bit growth given this pricing environment and clearly we think our disciplined approach to capacity management plays a key part in this.
Timothy Arcuri – Cowen and Company: Can you give us what the absolute wafer start capacity assumption is for the 30% to 40% industry bit growth?
Judy Bruner – EVP, Administration and CFO: Well, I dont want to necessarily give a total industry wafer capacity. I think you can find some of those numbers out there. But I will tell you that, our own wafer capacity today is a little below 2.5 million wafers per year and through productivity improvements that we are working on this year which includes installing some bottleneck tools. We expect to be able to exit this year at about 2.6 million wafers per year capacity.
Timothy Arcuri – Cowen and Company: Then just second question on (quadbit). We heard that you are shipping some of this into the market. Can you just talk a little bit about is that just another way for you to meet demand without adding wafers and is that targeted at a particular market?
Sanjay Mehrotra – Co-Founder, President and CEO: I’m not very sure what you mean by (quadbit), in case you meant 4-bit-per-cell like X4 technology that we had in the past, I want to be clear that we are not shipping any (quadbit) products today. All of our memory production is 2-bit and 3-bit-per-cell technology, what is commonly referred to as X2 and X3. We lead the industry in 3-bit-per-cell X3 production and there is no (quadbit) if that means a 4-bit-per-cell technology in the industry in production. The applications that the marketplace has today require very high performance, high reliability from memory technology and memory product solutions and the technology that are most suitable to address the industry applications. Industry demand drivers today are X2 based and X3 based technologies and products.
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