Sumit Dhanda (Banc of America Securities): On reducing headcount, what measures have you taken and how have they impacted the operating expense structure to drive profitability.
Bob Rivet: We are not going to cut our way to prosperity. It is about growing the top line and getting the appropriate margin from the manufacturing organization and making appropriate investments in R&D to pull us into even higher growth rates.
We continue to invest in process technology development and in R&D for the multitude of products that are coming out right now.
Srini Pajjuri (Merrill Lynch): On the Barcelona ramp, why are the speed grades not as fast as you would like them to be?
Dirk Meyer: The basic silicon yields of Barcelona are right where we expected them to be. They are on line with the previous 65 nanometer products from a deep activity and overall yield perspective. The issue has been one of tuning the design to the technology so as to support a high volume ramp.
Sumit Dhanda (Banc of America Securities): There is nothing endemic to your process technology that is problematic or which might spill over to your 45 nanometer ramp?
Dirk Meyer: No. The minor issues we have been experiencing have nothing to do with the process technology or the manufacturing capabilities. It is all a matter of wedding the design to the technology so as to be able to ship in volume.
Glen Yeung (Citigroup): Are you running your factories on full capacity?
Hector Ruiz: We have been ramping fab 36 in capability for quite some time. We are not yet at its maximum capacity. As we continue to add capability for fab 36, we continue to utilize it.
Ross Seymore (Deutsche Bank): How can we gauge the success of the new Barcelona chip in replacing existing customers?
Dirk Meyer: The customers are the people we sell the chip to, which is the OEMs. At this point, we''ve got a broad assortment of Opteron-based systems from all of the major OEMs and Barcelona will just provide a seamless upgrade path into those systems.
At the end user level, we are seeing a lot of interest both amongst installations that are already Opteron installations and new opportunities.
Cody Acree (Stifel Nicolaus): On the ASP mix going forward, how do you expect the mix with normal seasonality to impact the new products coming in?
Dirk Meyer: We will be introducing Phenom quad-core product into price points that we do not participate in today and we expect to sell at those price points. On the server side, the opportunity is to drive more server business and therefore increase the richness of the mix for the overall product line.
Cody Acree (Stifel Nicolaus): Would you expect ASPs to run flat, or there''s some room for improvement?
Dirk Meyer: Across the product line, there''s some room for improvement.
Cody Acree (Stifel Nicolaus): How do you feel about your mix of inventory and what you have available?
Bob Rivet: We have done a good job of transitioning to have very fresh inventory, a lot of 65 nanometer inventories. Everything is moving in the right direction from a microprocessor standpoint. We are further along or even richer in the mix of all new products in the GPU business. We have flexibility to toggle up if demand continues to be at this high rate.
Kate Kotlarsky (Goldman Sachs): In which of your market segments have you gained market share?
Bob Rivet: Based on the data from our competitors and our own data, we gained share in mobile, lost a little share in server from a unit perspective and desktop is too close to call.
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