Sanjay Mehrotra: Yes, our assembly and test facility in Shanghai is ramping up nicely and we expect to be achieving our target of 30% total unit production out of that factory late this year, in the fourth quarter. That captive capacity gives us again flexibility in terms of manufacturing product for us, as well as gives us cost benefit, particularly for multi-die stacked products, particularly for the mobile formats with multiple chips in them.

Edwin Mok (Needham & Company): Your agreement with Toshiba on the 3D is a payment that Toshiba will pay you. Can you give some color there or how long will that payment last and when do you expect to see that payment in the royalty stream?

Judy Bruner: Those payments will extend over multiple years. The exact timeframe is confidential in the agreement but the payment to SanDisk will be recognized on a straight-line basis over the period of the agreement, and will be recognized as license revenue.

Edwin Mok (Needham & Company): Is that starting from the next quarter or when does that start?

Judy Bruner: Because of confidentiality clauses, I can not give you the exact timeframes but we will take it into account in the future guidance that I provide.

Armand Pagosi (Credit Suisse): What do you think about the penetration, especially in the enterprise side of the business?

Eli Harari: The enterprise space is moving nicely. There is a lot of activity in the enterprise to adopt, to embrace a solid state disk for reasons of power and performance. That is a market where price per megabyte is not an issue at all, however the requirements in the enterprise are much more stringent than in the consumer space in notebook computers, for example. That is a niche market that is developing nicely. Most of the volume in the market for solid state disk we expect to come more in the notebook and even in the desktop as well as the ultra low cost NetBook computers, and those are the ones that are price sensitive and that is where MLC, which we believe is going to start making significant in-roads in 2009, is going to make a big difference.

Bob Gujavarty (Deutsche Bank): In 2008, you do not see much impact to the $2 billion in total JV fab investments, but in 2009, that $2 billion will come down. Is that correct?

Judy Bruner: That is correct, Bob. If you look at the total capital investment that we predicted at analyst day, including fab and non-fab, it was about $2.4 billion for 2008 and about $3 billion for 2009, and I expect both of those numbers to come down. In 2008, the number will come down in the fab category and it will also come down in the non-fab CapEx category. I would expect that we would be closer to $2 billion than to $2.4 billion in 2008. In 2009, it will come down in the fab category and also in the non-fab CapEx category.

Bob Gujavarty (Deutsche Bank): How much that could come down?

Judy Bruner: I would expect that it would come down at least $0.5 billion.

Bob Gujavarty (Deutsche Bank): The Japan FX can impact your gross margins. Was that part of your gross margin hit as well or was that neutral?

Judy Bruner: It was not a part of the miss from our guidance because when we gave our guidance for second quarter, we already knew the approximate rate at which the wafers were purchased in first quarter or before that would be sold in second quarter, but it is a reason for the decline in gross margin on a year-over-year basis and also on a quarter-over-quarter basis.

Craig Ellis (Citigroup): A number of presenters have addressed the inventory issue, which looks like it will be with us for some time. When will the on-hand inventory position be at its worst?

Judy Bruner: I expect that it will increase from second to third quarter. I am hopeful that it will decrease in dollar value from the end of third quarter to the end of fourth quarter, given the holiday season. It is possible that it would still be higher at the end of the year than it is right now.

Craig Ellis (Citigroup): How much of an inventory write-down is included in the 0% gross margin guidance that you gave us?

Judy Bruner: I would tell you that we expect it could be similar to what we included this quarter.

Craig Ellis (Citigroup): Given the rationalizing actions that you are taking on the supply side, when does that benefit industry?

Eli Harari: Yes, it is not going to have much of an impact in the near-term but it could make a significant impact next year. It will also depend on the actions or lack of actions by some of our largest competitors. Fab-3 and Fab-4 combined are substantial megabyte generators and this at least about 50%.

Kevin Vassily (Pacific Crest Securities): Does your decision to delay investment on Fab-4 at all change the equity stakes or ownership stakes you have in the fab?

Eli Harari: No, I think we do have the flexibility in there and we do have, without going into confidential specifics, we do have the ability for a party that decides to delay over time to catch up.