Greg Johnson - Senior Director, Finance and IR Steve Kelley - President and Chief Executive Officer Joanne Solomon - Chief Financial Officer.

Jairam Nathan - Sidoti Randy Abrams - Credit Suisse Atif Malik - Citigroup David Duley - Steelhead Sean Dixon - Bradford & Marzec Suji De Silva - Topeka Jeffrey Harlib - Barclays Umesh Bhandary - Jefferies.

Good day, ladies and gentlemen and welcome to the Amkor Technology Third Quarter 2015 Earnings Conference Call. My name is Latif and I will be your conference facilitator today. At this time, all participants are in a listen-only mode. After the speaker's remarks, we will conduct a question-and-answer session.

As a reminder, this conference is being recorded. I would now like to turn the call over to Greg Johnson, Senior Director of Finance and Investor Relations. Mr. Johnson, please go ahead..

Thank you, Latif, and good afternoon, everyone. Joining me today are Steve Kelley, our President and Chief Executive Officer and Joanne Solomon, our Chief Financial Officer. Our earnings press release was filed with the SEC this afternoon and is available on our website.

During this conference call, we will use non-GAAP financial measures and you can find the reconciliation to the U.S. GAAP equivalent at our website. We will also make forward-looking statements about our expectations for Amkor's future performance based on the environment as we currently see it. Of course, actual results could be different.

Please refer to our press release and other SEC filings for information on risk factors, uncertainties and exceptions that could cause actual results to differ materially from these expectations. Please note that the financial results discussed today are preliminary and final data will be included in our Form 10-Q.

And now, I would like to turn the call over to Steve..

Good afternoon, and thanks for joining the call. Today, I'll discuss our third quarter results, our fourth quarter outlook, the status of our key growth initiatives and industry trends. Third quarter revenues were at the higher end of our expectations and roughly flat to Q2.

Mobile communications and automotive revenues were slightly better than expected. Third quarter profit beat expectations, helped by favorable exchange rates and a richer product mix. Earnings per share increased $0.08 sequentially and we generated $37 million in free cash flow. As we move into Q4, the overall semiconductor market remains sluggish.

In general, our customers are controlling inventory levels due to a challenging economic environment. While it's been a disappointing year for the semiconductor industry and for Amkor, as downturns go this one has been relatively mild.

Our focus this year has been to grow share and win new designs, so that we emerge from the downturn a stronger company with the more diversifying customer base and more opportunities to grow. Revenue growth continues to be our key objective since it offers the best opportunity to improve margin, free cash flow and earnings per share.

We are tightly controlling CapEx and working capital in line with the demand environment. Accordingly, we have reduced our 2015 CapEx plan by another $25 million and are now projecting to spend roughly $525 million this year including $150 million for K5 construction. We expect to be cash flow positive this year.

Now I’ll discuss some of our key growth initiatives. This quarter we will exercise an option to increase our ownership stake in J-Devices to 80%. We will begin consolidating their financial results in 2016, adding roughly $200 million per quarter to Amkor's top line.

This consolidation will improve our free cash flow and EBITDA performance and cement our position as the world's second largest OSAT, well ahead of the next two players. Our integration activities with J-Devices are progressing smoothly.

As part of those efforts, we are working closely with J-Devices to broaden their customer base particularly in the area of automotive ICs. The example of J-Devices strength in automotive was the decision by Renesas to transfer most of its Singapore based automotive micro controller production to J-Devices factories.

That transfer began this year and will be completed in 2016. The automotive market is a key area of strength for Amkor as well. Together with J-Devices, we are the leading OSAT for automotive ICs with roughly $750 million in combined revenues in 2015.

Automotive IC makers appreciate the Amkor' execution, quality and reliability, our geographic and financial stability are also strong positives. We continue to focus strongly on growing our business in greater China. Through the first nine months of the year, our greater China revenues were up 37% year-on-year.

During the third quarter, we saw an increase in design and qualification activity by customers in the region. To further accelerate our progress, we have established a greater China business unit and tapped one of our senior executives to lead it.

This focused marketing and business development team will complement our dedicated sales team, who are primarily located in Shanghai, Beijing, Shenzhen and Taipei. The expansion of our Shanghai factory will be completed in mid-2016. Cleanroom space will expand by nearly 50% to a total of roughly 600,000 square feet.

We will serve international and local customers with a heavy emphasis on wafer-level packaging, 8 and 12-inch wafer bumping, stacked dye packaging and advanced test services. We will be one of the first OSATs to offer 12-inch bumping in China with production ramping up in the first half of 2016.

Our System in Package or SiP business is gaining significant traction particularly for high value added RF and front-end applications. This SiPs essentially collapse a circuit board onto a substrate, and contain up to 75 active and passive elements.

These products demand a variety of high precision assembly technologies which plays to Amkor's strength. We build these RF and front-end SiPs at our K4 manufacturing plant in Kwangju, South Korea. We believe that Amkor is now leading supplier of RF and front-end SiPs.

K5, our new R&D and manufacturing facility in South Korea, will be our center for advanced wafer-level SiP technologies, such as SWIFT and SLIM. These technologies will enable our customers to build very thin, very small products, combining processor, memory, and other peripheral ICs.

This package and module level integration is vital, as the economics of advanced silicon nodes become more and more challenging and the demand for thin form factors continues to increase. Finally, I would like to comment on the rapid consolidation currently happening in the chip industry and its impact on Amkor.

First, we view consolidation of our customer base as a good thing for Amkor. In general, larger customers want to deal with larger OSATs. Amkor is a one stop shop for these larger customers.

In addition to technology, execution, high quality, and a competitive price, Amkor offers these larger merged companies, geographic stability, and the ability to invest in advanced technology. All of our tier-1 OSAT competitors are currently engaged in merger and acquisition activity, creating a cloud of uncertainty and risk.

From a customer perspective the OSAT industry is a bit less stable than it used to be. In the midst of this turbulence, Amkor is positioned as a stable and reliable choice. We are focused on growing our business by keeping our customers happy, as well as by out-executing and out-innovating our competition.

We like our competitive position going into 2016. Joanne, will now provide more detailed financial information..

Thank you, Steve, and good afternoon everyone. Third quarter revenues of $734 million were flat sequentially. Our gross margin of 17% increased to 160 basis points sequentially and exceeded our expectations, largely due to favorable exchange rates and a richer mix of assembly and test services.

Our foreign currency exposure stems from the mix of our revenues and expenses. Around 95% of our revenues and 65% of our cost of sales and operating expenses are denominated in U.S. dollars.

The remaining portion of our cost of sales and operating expenses are principally denominated in Asian currencies where our protection facilities are located and largely consist of labor and utilities.

We also have monetary obligations that are denominated in foreign currencies, principally, our severance plan in Korea and our construction costs for K5. This quarter, the dollar strengthened relative to most of our Asian currencies particularly the Korean won, which drove the beneficial impact to gross margin and also to earnings.

Operating expenses in the quarter were $75 million. We expect our operating expense to remain below $80 million for the fourth quarter. For the full year we expect operating expenses to be down around $20 million, a 6% reduction on lower professional fees and reduced incentive compensation.

Interest expense in the quarter was $19 million, down from $24 million in the second quarter. Last quarter we redeemed our 7.38% senior notes due 2018, using cash on hand and borrowing under our credit facilities which bear interests at floating rates tied to LIBOR.

Current rates on this new debt are significantly lower and drove the interest expense savings. We expect the effective tax rate to be around 35% for the full year, the increase in effective tax rate is driven by minimum taxes in certain jurisdictions. As a reminder, we currently own 66% of J-Devices.

During the fourth quarter, we plan to exercise our option to increase our ownership to 80%. The exercised price is expected to be around $45 million and the transaction is expected to close during the first quarter of 2016. At that time we will begin consolidating the results.

The consolidation of J-Devices is expected to materially increase our revenue, free cash flow, and EBITDA performance, and lower our capital intensity. Our EPS pickup will increase by the 14% incremental ownership change. We generated EBITDA of $785 million over the past 12 months, adjusted to exclude a litigation charge.

On a combined basis, Amkor and J-Devices generated $870 million of EBITDA over the past 12 months. At September 30, we had total debt of $1.4 billion and J-Devices debt was only $50 million. On a combined basis, debt to adjust EBITDA was 1.7X.

And finally, our liquidity is solid with over $400 million in cash and $300 million in available undrawn loans, we are tightly controlling CapEx and working capital in line with the decreased demand environment.

For the first nine months of the year, we generated $70 million in free cash flow and we expect to be free cash flow positive for the full year. With that, we will now open the call up for your questions.

Operator?.

[Operator Instructions] Our first question comes from the line of Jairam Nathan of Sidoti. Your line is open..

Hi, thanks for taking my question.

First, I wanted to get an idea on the mix impact, you said the mix was better, can you give us some more details on what specifically was better and is it a kind of package or - ?.

The [enrichment] [ph] in mix had to do with some higher level of test services we did, and as well as mobile communication was slightly better than what we had forecast..

Okay. Steve, a longer-term question for you. So I know 2016, it's too early to call it but if I think about the various factors outside of the industry, of macroeconomic factors. Things like TSMC with their fan-out package, Qualcomm business with Samsung, and the whole Apple business comes to mind.

Can you walk through where Amkor stands on these variables here and what it could mean for 2016?.

Yes, I'd be happy to make a few comments there. Well, for sure 2016 is going to be a strong growth year for Amkor given the addition of J-Devices. So, that's going to be about $800 million in revenues for next year.

Now, with regards to the various puts and takes, there are some positive things going on for Amkor, many of which I really can't talk about in this call but certainly you mentioned a couple of players there in the mobile communication space.

I think that on the info side from TSMC, we continue to work closely with TSMC, they are a key partner for us and I anticipate that we'll have some type of wafer level SiP package coming out of both TSMC and Amkor in the coming two to three years and I think we'll both be successful with it.

We'll work together with them to make sure that we support our customers. On the QUALCOMM side, I have a lot of confidence that QUALCOMM will be successful in 2016. They are our biggest customer, we're their biggest OSAT. We are very close together develop new packages and get the cost out of those packages.

So I think they're very well positioned going into 2016..

Okay. That's all I had, I'll come back..

Thank you. Our next question comes from the line of Randy Abrams of Credit Suisse. Your question please..

Okay. Thank you. I wanted to follow up on the fourth quarter where you're guiding 3% to 10% down. Usually there is a lift from the flagship smartphone launch.

If you could characterize the 3% to 10%, how it compares by end market and maybe the difference on the flagship launch, if you're still seeing some balance seasonally this year from that part of the market?.

Yes, Randy, I'll make a few comments it will be little subjective but we did see a little bit of uptick on a flagship launch in September I think that’s why we exceeded our guidance by a small margin. I think some of that demand was quite frankly probably pull from Q4 and Q3.

We’re also starting to see some signs that there may be some more flagship revenue on its way either early next year or late this year. So we’ll have to stay tuned and see what happens there but there is some positive signs we’re seeing from some of our customers..

Okay, that’s great. And a follow up on that the first quarter because now with the base a bit lower for a little bit different time in Q3 to Q4 but base lower in fourth quarter normally seasonality is anywhere from down low single to down low teens.

If you could characterize where we’re at just from how much this is inventory correction and if we’re say through that, that could help in first quarter or if this is more demand and we should expect say normal seasonal downwards it's still I guess more like a high single digit or low teens decline.

I guess if you could characterize how demand inventory and the fourth quarter base may affect your outlook entirely next year..

Yes, Randy, we haven't really gone to that level of detail yet. We're working this quarter-by-quarter. It's difficult to predict when the market begins to recover. I think the comments from TSMC were quite illustrative.

I think they basically said that Q4 they’re starting to see some real discipline from the customers, as they try to reduce inventory and so that bodes well I think for either Q1 or Q2 to strengthen.

I think speaking for Amkor, I see some positive things that will impact the first half of next year so we’re working hard to limit the damage from any continuing inventory correction..

Okay.

And if you could take a look, you mentioned positive things, I think one was the high end smartphone that you might get in early build next year and maybe if you could talk about a few of other drivers, you’re most confident in, just as some of the areas you have been expanding like memory or China or if there some other opportunities you see for Amkor next year that look promising..

Yes, most of the opportunities that we see that are really going to drive revenue are in the smartphone segment. The smartphones and tablets still account for little more than half of our revenue.

So we see some positive things happening at the high end but also at the low end we've been making some progress in greater China and I think that will begin to bear fruit next year..

Okay, great. Thanks a lot..

Thank you..

Thank you. Our next question comes from the line of Atif Malik of Citigroup. Your line is open..

Hi, thanks for taking my question.

Steve, can you talk about when do you expect to ramp your own SLIM and SWIFT processes for Amkor?.

Yes, we’re actually running some prototypes through our line today but the center of excellence for SLIM and SWIFT will be our new factory in Incheon which we call K5 and we'll be running the first [qual lot] [ph] through that facility in the second quarter of next year and we hope to begin running some low rate production in the second half of next year.

So I think you will see us doing that for a number of customers particularly in the mobile phone and tablet space. These are the customers who really need thin products. So this is the best solution for companies that are building their own F processors, who want to combine other chips into very small module.

So I think you will see us start to take flight next year and go into full production in 2017 and 2018..

And then as a follow up Joanne you mentioned lower capital intensity next year post J-Devices consolidation, I mean how much lower can the capital intensity go, can you provide a rough range?.

I can give some color. With respect to the comment on lower capital intensity, it has a lot to do with adding the $800 million on top of our revenue base, so that by definition we’ll lower it but J-Devices is also very much – its lower capital intensity it's in the single digit as opposed to our double digits.

So I could see us just being slightly above the current levels but we’ll have to take it quarter-by-quarter as we see the demand progress..

Okay. Thank you..

Thank you. Our next question comes from the line of David Duley of Steelhead. Your question please..

Thanks for taking my questions.

Could you just give us - I think you mentioned, could you just give us an idea about how this each segment of your end markets is going to act in Q4 and then maybe you mentioned what would your gross margins do in the fourth quarter?.

Okay.

So with the guidance range on revenues being down 3% to down 10%, all our end markets are going to be impacted by the decline, so I don't expect any significant shift between the percentages of end markets, so we do expect to see weakness in communications which is over 50% of our business, I would expect in the fourth quarter they’ll still be over 50% of our business.

On the gross margin side, we’re right around 15% at the mid-point of our guidance, so we do expect that on the lower demand that the profitability will go down..

Okay. And as far as your CapEx goes, was kind of the outlook for Q4 being down this 3% to 10% on certain March quarter.

Why are you still spending so much money this year or do you have a lot of projects that you’re lined up that you think the spending path will require to or have you given a thought about lowering the CapEx even further I guess the question?.

Yes I think it’s important when you look at our CapEx to divide it into two parts, one is the typical capacity related CapEx which is down I think over 42% year-on-year, so 2014, 2015. So we’ve really cut back there.

The other part of the CapEx is our spending on K5 which is a long-term investment and so that’s certainly driving fair amount of spending in 2015 roughly $115 million and 2016 it will be roughly $200 million, so that’s a pretty big chunk of the overall CapEx..

Got it.

And just a clarification, would you just say was your SiP business that was going to be ramping next year in response to an earlier question?.

Yes let me explain a little bit better SiP business because I didn’t fully explain our strategy there. But first of all we’re looking at high value added SiPs where we could leverage our precision assembly technologies and extract some value.

So today in our K4 plant in Kwangju, we actually build all of our substrate based chips and this is the bulk of the market today, almost all of it in the front end in our RF module sector. As you move forward, we see another type of chip and this is basically wafer level type of SiP product which we’re going to build in K5.

So our SiP strategy from manufacturing standpoint centers up in Korea and if you want a substrate base chip, you go a K4, you want a wafer level chip you go to K5..

So the wafer level chip stuff is what you’re referring to as growing or starting to ramp up in the middle of next year?.

Yes, that’s right, that’s correct and the substrate chips are the ones that are in full production today and they have been for this year..

Thank you so much..

Sure..

[Operator Instructions] Our next question comes from the line of Sean Dixon of Bradford & Marzec. Your question please..

Hi Steve. A lot of my questions have been answered but I'm not really a technology person but I've been reading about this fan-out technology and just some implication for Amkor, most of which were sort of implied, it was suggesting that there will be – there could potentially be a hiccup at some point when this technology takes off.

Could you just sort of walk us through your thoughts around that and if you agree or disagree and sort of how you get around that and does that have something to do with this K5, how does your K5 facility fit into that sort of fan-out paradigm?.

Yes, so we can go over the fan-out environment, I think you’re referring to the info packaging from TSMC primarily..

Yes..

Yes, and so basically what I was talking about with the wafer level SiP business it's the same basic thing but we do it in a different way. From a customer standpoint you’re accomplishing the same objective. So that’s the way to think about it. If you take a look at value of that packaging service relative to entire TAM in our segment.

We’re talking roughly 1% of the TAM next year will be in this info/SWIFT sector. So it's still – its getting a lot of publicity, it's not very large at this point but I think as it gets large Amkor is going to be a full participant if not the leader in this technology..

And that will be around your K5 facility, like your K5 facility can accommodate that as you go along your build to add that in or do you feel like the - does TSMC have IP that could potentially be very disruptive and cause Amkor to have problem?.

Yes, I don't think IP is going to be an issue. We have a history of cross licensing in our industry and particular between TSMC and Amkor. The last transition was the fine pitch copper pillar bumping transition a couple of years ago and we ended up licensing our technology. And so I think we need to see our place out next year.

I think the ultimate wining technology may be some hybrid of their approach and I approach and will probably cross license each other that’s my best guess at this point. But in any case, I think that you’ll end up with at least two or three suppliers of this technology moving forward..

Okay, great. And then can you just talk us in discussion about this, about J-Devices and the capital intensity.

Can you just sort of walk us through what exactly - you mentioned automotive J-Devices heavy automotive, can you just sort I guess walk us through, what is the future of J-Devices and once you bring in online an start - I guess you’re probably operating it now but what is the future there in terms of capital needs, spending needs could you kind of make sound like it's just going to come online, it's going to bring all this cash flow and all this revenue but things don't stay static, I'm just curious what your thoughts are around that going forward..

Yes, happy to explain my thinking about J-Devices. First of all J-Devices is almost entirely a mainstream business so it's all wire bond and it's about half automotive, so probably sticky business. I think most of the spending which you’re going to see out of J-Devices will be in the realm of consolidation. So J-Devices is a roll up play.

It’s a collection about 10 different factories from [indiscernible] Renesas and Toshiba and it probably don’t need 10 factories moving forward.

So that will be in an orderly process then which they reduce their footprint in Japan and as they do that - and they reduced their fixed cost, you will see the margins improved over the next three to four years..

Okay. Thank you very much..

Thank you. Our next question comes from the line of Suji De Silva of Topeka. Your question please..

Hi, Steve. Hi, Joanne.

I'm not sure if I get this right, but the top ten customers are [12%] [ph] of revenues is that and do you expect that to increase in the next concentration or diversify in the next several quarters?.

So the top ten customers are 61% of our revenues while we have seen some shifting around amongst the top 10, it's been relatively consistent although they are changing places. So with the consolidation I do expect some players to get larger but overall I would expect their top 10 customers to remain in this 60ish range..

Great. And the other question I have is on the MEMS and the NAND businesses.

Can you update us on how those are progressing in growth and those going to be meaningful opportunities next several quarters?.

I’ll make a subjective comment Joanne, perhaps I will add some numbers to it but I think the MEMS business continues to go very well for us. I think the growth may have tapered a bit in Q3 because of general market conditions but MEMS will be a continued growth rate for us for the foreseeable future.

I think on the NAND flash side we have very good growth in the first half. We are 20% year-on-year but we’re starting to see some changes in the NAND flash market. So I’m not anticipating a lot of growth there in the coming couple of quarters so we’ll have to monitor that..

That’s great. Thanks guys..

Thank you. Our next question comes from the line of Jeffrey Harlib of Barclays. Your question please..

Hi, can you just talk about if you’re seeing increased pricing pressures either in advanced or more traditional packaging given that the weak revenue is in the industry?.

Our industry is characterized by price pressure, rain or shine we face price pressure. So I haven't felt it to be extraordinary this year.

I think what’s interesting these types of downturns is the customers become little conservative when it comes to building product and so we are not getting orders at the last minute and having to exploit those orders. So the pressure comes in a different way. It’s certainly competitive but I wouldn’t say it’s more so than the past couple of years..

Okay.

And just the weakness in mobile communications, can you just compare what you’re seeing with Android versus iPhones?.

Yes, I mean clearly Android has been relatively sluggish the whole year. There haven’t been any breakout products. I think on the iOS side, obviously the iPhone 6 was a great success and it’s carried over into this year obviously not quite as intense the build because this was an update to last year's phone.

So I think if you look at 2015, the big difference in terms of 2015 and 2014 is in 2014 we had a breakout product with iPhone 6, 2015 we didn't have that type of products. So we had some good products but not great product..

Okay.

And just lastly just the J-Devices, you have the revenue and EBITDA performance in the quarter and any of that from the strong dollar?.

I'm sorry, can you repeat the question one more time..

Yes just J-Devices, their performance in the quarter revenues and EBITDA and the effect of the strong dollar?.

Okay. So on the strength of the dollar, J-Devices revenues are largely Japanese Yen denominated, their expenses are also Yen denominated. So the impact to EBITDA is light but the decreasing revenue because of the dollar appreciation can be significant. So it’s felt a little bit stronger at the top line than the bottom line..

Okay. Thank you..

Thank you. Our next question comes from the line of Umesh Bhandary of Jefferies. Your question please..

Yes, thank you for taking my questions.

My first question – in the fourth quarter guidance, are you able to delineate sort of the weakness that you’re seeing from the macro environment perspective versus some of the customer specific challenges that Amkor might be facing?.

Umesh the short answer is no. But I could just make a comment that we’re seeing broad based weakness I think in general customers are assuming a conservative posture with some exceptions. So I don’t think they are going to text our capacity infrastructure this quarter let’s put it that way..

Got it.

And then the second question is, I think you said that your CapEx as it relates to K5 is going to be around $200 million next year, is that going to be the end of it or when does K5 comes to sort of conclusion in terms of build out there?.

The $200 million will complete the infrastructure build, it does not include any equipment that we install in K5. But that will be related to capacity. So it will be part of our capacity expansion capital budget..

My question to that in that regard, your ability to generate sort of free cash flow, I think like in the past you have said, after your K5 expansion is completed then you probably going to generate cash on a sustainable basis, do you think that is still possible?.

Yes definitely. So we’re expecting to become consistent cash generator in 2017..

Got it.

And then my final question is really around consolidation that is happening in your own industries just in terms of doing, what some of the Chinese sectors are doing, so how do you think you guys fit in that sort of landscape and so your own thinking around consolidation in those sector?.

Well from our perspective all this consolidation in our sector has been strong positive for Amkor. A lot of doors are opening that had not been opened before because of various issues at some of our competitors. So, what we are trying to do at this point is just entertaining the opportunities in front of us, execute and win as much position as we can.

So coming out of the down turn now we are able to increase our market share..

If I could just follow up on that. You didn’t say you need to potentially acquire another player just to be able to compete with your number one player – number one competitor in the industry..

Yes, let me just go back to our objective as a company is to grow revenue because that improves all of our metrics essentially and one of our strategies for growth is to selectively build our scale and scope through strategic investment.

And so to point out a couple of recent ones, one is J-Devices of course and the other is when we acquired the power discreet business in Malaysia of Toshiba. So, we always are on the lookout for good opportunities..

Okay. Thank you very much..

Thank you. Our next question comes from the line of Randy Abrams of Credit Suisse. Your question please..

Okay. Thank you for the follow-up. I wanted to ask on the J-Devices, make sure I caught it. I think in the prepared remarks you mentioned that 200 million run rate when it is consolidated and the 2014 I think the run rate was a bit over 900 per year.

And so just wanted to clarify if that's the amount it's now running and was that partly the yen impact and also releasing the same type of demand slow down - I guess if you characterize the change in run rate. And if the margin structure has change much, ever I think we’re thinking of low-teens gross margin mid to high single digit operating margin..

So Randy the drop in revenue is largely the appreciation the U.S. dollar and the drop in the yen so that explains the drops in the 900 to 800 largely.

From our margin expectation standpoint, we do expect them to be in the low double digit teens area and as their cost structure improves and as we can start to bring in customers from outside of Japan on to the island, that will continue to help improve the profitability to be more in line with our experiences in the wire bond side in Korea..

Yes, just to comment Randy I think you asked one of the questions, I think that J-Devices - because of their high automotive content it’s a little less dynamic than our business so intensively more stable. Not to say that they're growing by leaps and bounds, but they don’t see the swings that we do in the mobile communication segment..

Okay, great. And follow-up on the CapEx.

If you could mention where the – if it was just a modest cut by the CapEx where the revision came through from and directionally 2016 is your thought on kind of equipment CapEx into next year now and with the outlook for combined depreciation would be?.

Randy that 25 million that we took out of the plan this past quarter was all capacity related. The basic programs that did not happen as we expect we would have pushed the CapEx out or in some cases we'll see better efficiency in the way we expected. Moving forward our expectation is to continue to exercise very tight control over CapEx next year.

So we’re going to be very careful about what we spend..

Okay. All right, thanks a lot..

Thanks very much Randy. There are no more questions. So that ends the call today. I would like to turn it over to Steve for his closing remarks..

I'd like to recap our key messages. First, our Q3 results were better than expected. Our Q4 revenue outlook is consistent with the rest of the industry. Our growth initiatives continue to gain traction. Our J-Devices will be consolidated in 2016 adding roughly $200 million in revenue per quarter.

And finally we like our competitive position going into 2016. Thank you very much for joining us today..

Thank you. Ladies and gentlemen, this concludes today's conference call. You may now disconnect..