Thomas Dennis – Executive Chairman and CEO Michael Ludwig – CFO Mike Slessor – President.

Brett Piira – B. Riley & Company Patrick Ho – Stifel Nicolaus Tom Diffely – D.A. Davidson Srini Sundararajan – Summit Research Christopher Longiaru – Sidoti & Company Atif Malik – Citigroup.

Thank you, and welcome everyone to FormFactor’s Third Quarter 2014 Earnings Conference Call. On today’s call are Executive Chairman and Chief Executive Officer, Tom St. Dennis; President, Mike Slessor and Chief Financial Officer, Mike Ludwig.

Before we begin, let me remind you that the Company will be discussing GAAP P&L results and some key non-GAAP results to supplement understanding of the Company’s financials. A schedule that provides GAAP to non-GAAP reconciliations is available in the press release issued today and also on the Investor section of FormFactor’s website.

Also, a reminder for everyone, that today’s discussion contains forward-looking statements within the meaning of the Federal Securities laws.

Such forward-looking statements include but are not limited to financial and business performance projections, statements regarding macroeconomic conditions and business momentum, statements regarding seasonal business trends, statements regarding the demand for our products and technologies, statements regarding our ability to design, develop, introduce, and qualify new products and technologies with one or more customers and to realize revenues from those new products, and statements that contain words like expects, anticipates, believes, possibly, should and the assumptions upon which such statements are based.

These forward-looking statements are based on current information and expectations that are inherently subject to change and involve a number of risks and uncertainties. FormFactor’s actual results could differ materially from those projected in our forward-looking statements.

The Company assumes no obligation to update the information provided during today’s call to revise any forward-looking statements or to update the reasons actual results could differ materially from those anticipated in forward-looking statements.

For more information, please refer to the Risk Factor discussions in the Company’s Form 10-K for the fiscal year 2013 as filed with the SEC, subsequent SEC filings and in the press release issued today. With that, we will now turn the call over to CEO, Tom St. Dennis. Sir, you have the floor..

Thank you, and good afternoon. FormFactor’s business gained substantial momentum in the third quarter through strong broad-based demand from our customers and continued improvements in our execution.

The third quarter had the highest revenue, the highest bookings, the highest gross margins and the highest non-GAAP earnings that the company has achieved since the fourth quarter of 2007. In addition to that, it was the second consecutive quarter of positive cash generation.

After several years of effort to get our product portfolio and cost aligned to the market opportunity, FormFactor is now clearly moving into the next phase of its growth and development. Our SOC business grew quarter-over-quarter in Q3 as mobile computing, personal computers and servers remain strong.

We continue to see increased demand for cards to probe copper pillar structures, but we also saw broad-based demand for SOC probe cards in other markets like industrial and automotive. The DRAM probe card market remains healthy and we grew our revenues quarter-over-quarter as well as year-over-year in Q3.

DRAM customers are investing in new technology nodes as well as new memory communication interface standards such as DDR4 and LPDDR4. Each new standard drives new designs which in turn drive new probe cards. Looking ahead to Q4, we don’t see the typical seasonal downturn that we’ve experienced in previous years.

This is due to stable DRAM pricing, a consolidated DRAM supplier base and the diversification of DRAM demand across many product areas. The outlook for the DRAM probe card market in 2015 continues to look promising as well. During the third quarter, we announced our new product platform for the NAND Flash market called Vector.

As we’ve discussed on past calls, Vector was qualified in Q2 of 2014 as one of the four largest NAND Flash suppliers and is currently being evaluated by another one of the largest NAND Flash suppliers. We expect that qualification to be completed by the end of this quarter.

The Vector product opens up a large portion of the NAND Flash probe card market that we previously have not served and represents an incremental served available market for the company of $150 million to $200 million annually.

In the near term, we remain optimistic about the opportunities for FormFactor to grow our revenues by $65 million to $75 million a year as compared to our 2013 revenues.

Based on our current revenue run rate and an unseasonably strong outlook for our fourth quarter, we should deliver $35 million to $40 million of that opportunity this year well ahead of our original plans.

This growth is driven by products and customer partnerships that we’ve developed over the past few years and if turned into opportunities that we have line of sight to today.

Longer term, given the demand for increasingly complex probe cards, driven by advanced packaging techniques and our new Vector NAND Flash product, we believe we’re well positioned to outpace the 5% compound annual growth rate of the advanced probe card market.

The worldwide team of FormFactor employees have already delivered on the first part of this growth through improved operational and product development execution. We’ve also shown the leverage that our business model has to deliver incremental profits and cash based on top line growth. I’m very confident about what this team can do going forward.

Mike Ludwig will now review our Q3 results and our Q4 guidance.

Mike?.

Thank you, Tom and good afternoon. Revenues for Q3 were $73.9 million, an increase of $6.5 million or 10% compared to Q2. The increased revenues were driven by continued strength in both our SOC and DRAM businesses. SOC revenues in Q3 up $39.4 million increased $2.9 million or 8% over a strong second quarter.

SOC revenues represented 53% of the company’s third quarter revenues comparable to Q2. The strength was broad based with continued momentum from PC, server, mobile and automotive applications. We continue to see meaningful revenue growth in copper pillar applications.

Third quarter revenues for DRAM products were $31.4 million an increase of $5 million or 19% from the second quarter. DRAM revenues represented 42% of our third quarter revenues. The increase resulted from strength in both commodity and mobile DRAM demand in continued node transitions.

Revenues increased in Q3 at all three major DRAM device manufacturers. Flash revenues were $3.1 million for the third quarter, a decrease of $1.3 million from the second quarter. NOR Flash revenues were $1.1 million in the third quarter and NAND Flash revenues were $2 million in the quarter, an increase of $0.6 million compared to the second quarter.

Our new NAND Flash probe card, Vector, contributed meaningfully to the $2 million of NAND Flash revenues in the quarter. Third quarter GAAP gross margin was $24.1 million or 32.7% of revenues compared to $20 million or 29.7% of revenues for the second quarter.

GAAP cost of goods sold expenses in Q3 included $0.7 million for stock-based compensation and $4.3 million for amortization of intangibles. On a non-GAAP basis, gross margin for the third quarter was $29.1 million or 39.4% of revenues compared to $25 million or 37.2% of revenues for the second quarter.

The fall-through to gross margin of the increased revenues relative to Q2 was 62%, slightly higher than the 60% in our financial model. The increase in the third quarter non-GAAP gross margin resulted from increased absorption of fixed cost from factory utilization and favorable variances from good manufacturing execution.

Our GAAP operating expenses were $24.6 million for the third quarter, an increase of $0.3 million compared to Q2. GAAP operating expenses in the third quarter included $3.2 million for stock-based compensation and $0.7 million for amortization of intangible assets.

Non-GAAP operating expenses in the third quarter were $20.3 million slightly higher than Q2 expenses. Excluding incentive compensation cost, our third quarter operating expenses were $0.4 million lower than the second quarter expenses.

Basically its average shares outstanding for the third quarter increased to 56.3 million shares compared to 55.8 million shares in Q2. Fully diluted share count for the third quarter was 57.6 million shares. Basic and fully diluted GAAP loss per share was 0 in Q3 compared to a loss of $0.8 per share in Q2.

Basic and fully diluted non-GAAP earnings per share was $0.16 in Q3 compared to $0.09 and $0.08 per share respectively in Q2. Cash comprised of cash short-term investments and restricted cash ended the third quarter at $154.8 million, $5.3 million higher than Q2. Here are some other financial details.

Our depreciation and amortization in the third quarter was $8 million including $2.9 million for depreciation and $5.1 million for amortization of intangible and intangible assets. Our capital expenditures in Q3 were $.15 million comparable to the second quarter expenditures.

Our stock-based compensation expense for the third quarter was $3.9 million, $0.4 million higher than the second quarter. The higher stock-based compensation expense was due primarily to a change in the expected future forfeiture rate of restricted stock units.

Going forward, we expect the stock-based compensation charges to be closer to $3 million per quarter. With respect to the fourth quarter, we see unseasonably strong broad-based demand continuing to both SOC and DRAM product segments fueled by product design cycles, technology node transitions and new memory communication interface standards.

With continued momentum, we expect fourth quarter revenues to be in the range of $69 million to $74 million. Our product mix will not be as strong as we experienced in the past two quarters, therefore we expect the non-GAAP gross margin to be in the range of 32% to 36%.

Non-GAAP operating expenses will remain in the $19.5 million to $20.5 million range for the fourth quarter and cash flow will be positive $7 million to $9 million.

Although we typically see seasonally weaker demand in Q4 and Q1 compared to the second and third quarters, we are currently experiencing board-based market strength that is atypical for this time of year.

Given the unusually strong demand environment and our limited visibility into the first quarter demand profile, we will not provide revenue guidance for the first quarter of 2015 until our fourth quarter earnings call in February 2015. With that, I will return the call back to Thomas St. Dennis..

Thanks, Mike. As I mentioned in my opening remarks, FormFactor is moving into a new phase of its growth and development. There is significant further growth opportunities in front of us and the company is well positioned to take advantage of those opportunities.

We also think that it’s the right time to take the next step in our management succession plans that the Board put in place over a year ago. Yesterday the Board of Directors unanimously elected Mike Slessor to be the next Chief Executive Officer of FormFactor starting with our new fiscal year beginning on December 28th, 2014.

Mike was CEO of MicroProbe before he joined FormFactor in October 2012 as part of the acquisition of MicroProbe. As CEO, Mike led the team at MicroProbe to grow revenues from $25 million a year to over $100 million a year in just four years.

As President of FormFactor since 2013, Mike has done an outstanding job of leading our improvement of both operational and product development execution which has contributed significantly to our improved financial results.

Mike has proven his ability to run a successful and profitable business and I believe that combined with a strong technical background gives FormFactor a competitive advantage going forward.

I will continue in my role as Executive Chairman and put my focus on identifying inorganic growth opportunities for the company while supporting Mike and the management team of the transition. I think Mike is the ideal candidate to lead FormFactor in the next phase of its growth and development and he has my and the Board’s full support.

Congratulations, Mike..

Good afternoon everyone and thanks for the kind words, Tom. I’m extremely honored today to be named CEO elect of FormFactor and to be entrusted with leading the next phase of company growth and development.

Over the past four years, under Tom’s leadership, we have successfully turned the company around, executed and integrated a major strategic acquisition and delivered two consecutive quarters of non-GAAP profitability and cash generation.

On behalf of our shareholders and employees worldwide, I’d like to thank Tom for the leadership and steady hand that guided us successfully through these significant events. On a personal note, I’m very pleased that Tom has agreed to continue as executive chairman to help facilitate the upcoming transition.

Based on our Q4 guidance, we expect to deliver our third consecutive profitable quarter during what is typically our seasonally weakest period.

These results are both representative of the overall market strength we are experiencing and indicative of execution of our three initiatives in the SOC, DRAM and NAND Flash markets that are planned to deliver $65 million to $75 million in annual revenue growth from 2013 levels.

As we grew the top line through these initiatives, we are also increasing our focus on leverage and efficiency throughout the business.

We believe that the scale derived from our leadership position in the advanced probe card market allows us to effectively deploy resources, technologies and assets across our certain markets and are encouraged by the initial results of these efforts.

I look forward to assuming the CEO role next year and I’m excited about the future prospects for FormFactor in the coming quarters and years. At this point, we’ll go to Q&A.

Operator?.

Thank you. (Operator Instructions) and our first question comes from the line of Brett Piira from B. Riley & Company. Your line is open, sir..

Hey, thanks for taking my questions. Tom, congrats on the turnaround effort and Mike on the promotion there.

Maybe if I can just start out on the DRAM side, can you give us an update of where you are with your gains at your newest customer there versus the $3 million to $5 million that you’ve laid out prior?.

Yes. So as we talked about in the prepared remarks, we saw increased revenues from all three major DRAM manufacturers. We told you before that adding the third major DRAM manufacturer to our customer list was a $3 million to $5 million opportunity as we worked our way through the current year of 2014.

At the Q3 levels and as we see moving through Q4 here, we’ve essentially realized that opportunity at that level and that’s part of the reason, as Tom mentioned in his prepared remarks, we’re ahead of schedule on the $65 million to $75 million of aggregate growth opportunities..

Great.

And is that a level that you guys want to hold in the future or do you think that it could move up in the future?.

I think with that customer and all the major customers around the world, it’s a multi-year process of engagement and gaining market share and gaining the collaboration and relationship where you can continue to gain share.

So I think there is potential there, but we need to continue to execute at these levels and make sure we’re prepared to take on the next set of challenges of that customer..

Okay great. And then maybe just one more for me. On the SOC side, we’ve heard from other people that copper pillar is gaining some nice traction in the market.

Any way that you guys can break out what the revenue contribution was from copper pillar?.

Yes. Actually if you look at copper pillar excluding our – one of our largest customers that does exclusively copper pillar, if you look at that, we actually have tripled our copper pillar revenues from Q3 to Q2 and basically are running at somewhere between $8 million and $9 million a year of – excuse me in the quarter for copper pillar..

Okay, great. Congrats again guys..

Thanks..

Thank you..

Thank you. Our next question comes from the line of Patrick Ho from Stifel Nicolaus. Your line is open..

Yes, thank you. And I’d like to echo also my congrats to Tom for this phase of the turnaround and Mike, I wish you the best of luck going forward. Keep the ball rolling. In terms of lead times for you guys across the equipment industry, they’re seeing a shorter and shorter lead times of the chip makers have a lot more moving pieces.

I know you’re not an equipment company per say, but given that you have the same customer base, how have they react to you in terms of leads times? Are they shrinking those? And how have you reacted in response to that?.

Well I think there’re two pieces to the answer to that Patrick. I think certainly responsiveness and flexibility in the industry environment right now is absolutely critical to being competitive and winning business. So lead time expectations and the ability to go win a deal is certainly dependent on having lead times that are relatively short.

We’re, in essence, taking advantage of a lot of the work that was done when Tom first came here in 2010 to really structurally reduce the lead times and focus on improved delivery of our products which puts us in a position to be able to compete for that business.

But you’re right, lead time and lead time pressure is one of the major competitive attributes and one of the ways we’re winning business today whether it be in SOC, DRAM or NAND Flash..

Great. Going to the NAND Flash side for a second, given the traction of your Vector product where you’re already starting to see the nice ramp up in revenues, you mentioned the second qualification that will be completed this quarter.

How do you look at 2015 in terms of additional qualifications because there are two other customers still out there? Do you see those potentially being, I guess in the evaluation stages as we get into 2015?.

Yes, so you’re absolutely right. We consider the NAND Flash market to be composed of four significant large players. We’re qualified at one generating Q3 and Q4 revenue from shipments to that first qualification customer. We’ll get qualified at the second customer we believe here in the fourth quarter.

As we work our way through that second qualification, we’re evaluating where to go next and how that fits into our resourcing of both the manufacturing of the Vector product, the design of the Vector product and the important aspect of supporting the Vector product in the field to see where we go next, but it’s certainly a topic that we’re, if you like, internally planning and debating as we enter into the 2015 planning sessions..

Great.

And final question for me on the modeling side of things, you guys have kept a very, very disciplined and lean OpEx level particularly as the revenues have ramped over 70 million and maybe for the other Mike, how do you keep the OpEx at this type of levels particularly if you take that next stage of revenues growing to say, 75 million to 80 million type of quarterly levels? What are some of the variables there to keeping OpEx as lean as it is?.

Well, I think Patrick we’ll still be able to keep it very lean and even going forward those levels of revenue. I think you won’t see our guide for OpEx move up much at all and I think the reason for that is when you look at how we get there.

Really it’s pretty much the same customer base and therefore since it’s the same customer base and maybe deeper penetration into that customer base, we don’t feel like we need to add additional field, sales or other individuals in order to capture that revenue.

Well there probably be a little bit of investment in repair or service type of individuals, but overall we’re going to be able to stay pretty lean because, again, we’ll be penetrating for the most part current customer base..

Right, thank you and congrats again..

Thanks..

Thank you..

Thank you. Our next question comes from the line of Tom Diffely from D.A. Davidson. Your line is open..

Yes, good afternoon. So I guess another question here for Mike on the model itself.

You talked a little bit about a bit of a tougher mix this quarter impacting the gross margins and in the past we used to always talk about the NAND being the weak link and now that the NAND tool is – our product is much more, much higher margin, what are the dynamics that give you strength or weakness in the quarter from a mixed point of view?.

Well certainly, you still have a mix of the percentage of business being SOC as well as versus DRAM. And even within that, we have certain products that have better margin characteristics than others.

And if you look at Q4 again, as Mike mentioned earlier, we’re fully engaged now at all three major DRAM manufacturers and we’re going to have a pretty strong quarter with respect to PC related probe card revenue. So I think again, those are all good things. We’re operating well from a – and executing well from a manufacturing perspective.

So again, I think generally speaking we’re happy with where we’re at, but I think the fourth quarter is going to be a little bit weaker with respect to mix even within not just SOC, DRAM but also within those particular product markets..

Okay. That makes sense. So when you look at the SOC side of the business, we focus a lot on the copper pillar, but what are some of the strengths you’re seeing outside of copper pillar right now that led to some good results..

Well, I think we need to be a little bit careful about the distinctions. There’s some of the near term-growth we’ve seen in copper pillar is due to applications largely in the mobile space. So baseband, application processors, stuff that’s ending up in today’s handsets and new mobile phone releases.

That’s been really the near-term driver in copper pillar adoption that we’ve seen. We have a baseline business which is also a flavor of copper pillar which buy and large ends up in microprocessor devices driven by the PC market.

So in the third quarter we saw a substantial strength in both of those aspects of our SOC business and the copper pillar business itself.

I think also when we look outside those two segments, industrial and automotive, which tends to be a little bit less cyclical and a little bit less dynamic than perhaps the PC-driven business or mobile business, we see continued strength in those and that’s obviously good for the overall business levels as well..

Okay. And then finally –.

Tom and just – we’re also not doing any business with microchip at this time. So that helps I think..

Yes.

All right, and then finally, when you look at your different segments now, is there some way they are handicapped – whether your DRAM or SOC has more or less seasonality in it than the – or is there a certain part of the market that you would – you’re surprised that you don’t have seasonality this year when you typically have pretty strong seasonality?.

So I think the simple answer is yes. I think the underlying dynamics – we still think this is fundamentally a seasonal business when we look over multiple years. This year as you can infer from our Q4 guidance that seasonality is not there nearly to the extent that we’ve seen it in previous years.

Some of that is due to the execution of our growth initiatives. So we’ve been able to add the third DRAM customer which helps from a seasonality and product cycle perspective.

We’ve certainly executed well as you’ve heard on some of the mobile copper pillar application growth adoption but there’s also some, probably, things that are shorter term that are acting against the usual seasonal trends. The PC-driven business is unusually strong for this part of the year.

And the combination of node transitions and several leading edge DRAM customers going from DDR3 both commodity and mobile to DDR4 at this time is certainly also counteracting the usual seasonal trend.

So I think a mix of structural issues, structural reasons, like our execution improving as well as maybe shorter term demand drivers that are counteracting a typical calendar seasonality..

Okay.

So next year you’d expect seasonality once again but just perhaps form a higher level to start with?.

I think to the extent we have any visibility into next year I think that would be our opening day. Yes, yes..

All right. Thank you..

Thank you. Our next question comes from the line of Srini Sundararajan from Summit Research. Your line is open..

Hi, guys. Congratulations Mike. And good job both Tom, and good job, Stan, also. My question is going forward, what are the inflections, how are you going to see from the technology side in the next – from the next quarter onwards until the end of 2015, if you would kind of give me a roadmap in all three, DRAM, NAND and –.

Sorry, Srini, technology inflections from a customer standpoint?.

From a customer standpoint or your business standpoint..

Okay..

Meaning that you alluded to one on DDR4, for example..

Yes. So I think in DRAM that would certainly be the big one I’d point to. In NAND Flash, I don’t think we have enough market coverage or market penetration to offer a useful opinion there on inflections just yet. On SOC, I think there’s again around the theme of copper pillar adoption.

I think the one thing that could significantly accelerate that in sort of a shorter term timeframe, it does appear there’s a fairly strong correlation between the 16 nanometers flash, 14 nanometers of thin FEP processes, chips being built on NAP [ph] front and wafer process being packaged with copper pillar applications.

And we’re engaged on building the initial probe cards for some of those early designs. Clearly there’s a story that needs to play out on how fast that ramp is and how well it yields initially.

But I think if I were to point to SOC underlying the copper pillar theme, certainly 16 nanometer, 14 nanometer, wafer ramps and design adoption, there is going to be a potential big inflection for us in the near-term..

Okay. Thank you very much. Again, congratulations..

Thank you..

Thank you. Our next question comes from the line of Christopher Longiaru from Sidoti & Company. Your line is open..

Hey, guys and Mike, congratulations. Nice quarter..

Thanks. Thank you..

Hey, so I’m just looking at – there’s a lot of things adding to this gross margin beat and guide, right? I’m just trying to get an idea of how much each thing contributes. Meaning better factory utilization, product mix, and then just manufacturing excellence.

Can you kind of break it out relatively and give us a better understanding of that?.

Yes. If you look at it so we were about $4 million better than – on a non-GAAP basis, our third quarter non-GAAP gross margin versus our second quarter. And if you look at that, even though from a standard margin perspective, our standard margins again, the mix in Q3 – the product mix in Q3 maybe wasn’t as strong as it was in Q2.

But still, with the increased revenue on the standard margin side, we added about a little over $1 million there. Factory absorption ended up benefiting us by about $2 million. And then we really had strong PPV and variances added somewhere about another – a little over $0.5 million.

And then some spending controls and what-not added pretty much gave us the rest. So that really is how we ended at getting there. From other things that typically affect us, E&O and warranty, those were basically relatively flat quarter-on-quarter. So that’s really kind of a profile in terms of how we got to $4 million better Q3 versus Q2..

Great. That’s really helpful.

And then just in terms of the utilization, can you comment on what that was?.

We have several factories here. So each factory had a little bit different utilization but they were pretty high – I’d say pretty high utilization within the factories. You’re probably talking about high 80s low 90s with respect to factory utilization..

Thank you, guys. I appreciate it. I’ll jump out..

Okay..

(Operator Instructions). And our next question comes from the line of Atif Malik from Citi. Your line is open..

Hi, thanks for taking my question, and congratulations, Mike.

I just want to understand in terms of your DRAM, NAND and SOC opportunity in the December quarter, do you expect all of them to be down sequentially or one of them will be up?.

I think at that level, we see probably DRAM being close to flat, SOC maybe being down a little, and NAND off of obviously some relatively small numbers we see as relatively flat. Maybe a little bit of growth in NAND depending on the Vector product penetration at both the initial qual [ph] customer and second qual customer.

I think it’s mostly – that dynamic in SOC is mostly related to the timing of design ramps in the mobile ecosystem and the end products they’re supporting. So I don’t think we see anything structural there but that’s sort of how the three segments break down into the top line revenue guidance we’ve given for the quarter..

Okay. And then a question on the gross margins, the guidance on the gross margin is a little bit lighter related to the revenue guide.

And is this a one-quarter phenomena that you’re ramping these new products or are the new products coming at incrementally lower gross margins? And how should we think about normalized gross margin that 70 million revenue opportunity next year?.

Yes. I would say that new products coming out or not coming out at lower gross margins, is this a one-time? I don’t know that it’s necessarily a one-time. I think again, as we talked about earlier, it’s just the mix that we have in this quarter as Mike said, between in the fourth quarter having, let’s say, a slightly higher percentage DRAM versus SOC.

And as we’ve talked about SOC tends to have higher margins. But even within the SOC and DRAM segments, we talked about having – we are ramping at the one – at the third and most significant DRAM supplier and so that has cost associated with it.

Also having a significant PC exposure in the fourth quarter as well puts a little bit of pressure on the gross margin as well. So I wouldn’t call it a one-time. But at the same point in time, it is definitely more challenged than what we have seen in the last couple of quarters with respect to mix.

On a go-forward basis, if you’re looking at $70 million, $75 million, I think how we’ve laid this out in the past is, again, if you go back to our gross margin, the model that we’ve communicated, at breakeven $61 million to $63 million, our gross margins would be 30% to 33%. And then from there there’s a fall through on incremental revenues of 60%.

So if you do the math you’re going to get somewhere close to a 30 – probably 33%, 34%, 35% margin, right, again, depending on mix at a $70 million number..

Okay. And the last question, can you break out your industrial and auto sales percentage? I understand you’re not exposed to microchip but your comments on seasonality are countered to some of the comments that industrial, auto companies that have made an outlook. So I’m just curious what your percentage exposure is to industrial and auto.

And also if you can talk about the lead times, are your lead times pretty short that if there is a change in demand you could still see some weakness in your December quarter?.

I think there’re probably two separate questions there. I think in terms of starting to peel out and break out the sub-segments of SOC, DRAM, and NAND, I’m not sure we want to go down that path because in any given quarter, they move around a reasonable amount relative to each other.

The industrial and automotive is a pretty significant part of that business. But I think if you piece together what we’ve disclosed about different aspects of the SOC business, it’s kind of an order $10 million a quarter business, and has been there through – at half that level throughout much of 2014 and we see that persisting.

Your comment on lead time is absolutely warranted. Like everybody else in the semi-conductor supply chain, one of the things we suffer from or are challenged by is long-term visibility. And it’s one of the reasons why we’re not providing Q1 guidance at this time.

Although we see a strong demands environment and continued momentum here around all of the growth initiatives, certainly with lead times that are less than a quarter, all of us in the semi-conductor supply chain are needing to be flexible and adaptable.

And as you say if demand were to shut down very quickly here in the fourth quarter, we would see that impact our overall business. Given the backlog that we currently have and the distance that we sip form the end of the quarter we think that’s a relatively remote possibility.

But given the lead times, given the flexibility, given the adaptability of the industry right now, I think it’s a reasonable comment..

Thanks, Mike, very helpful..

Thank you. That is all the time that we have for questions for today. I’d like to turn the call over to the leadership for closing remarks..

Thanks everyone for tuning in here today. I hope that you have seen the momentum that we’ve built and the path we’re on going forward. As I said before, we’ve got a lot of confidence in Mike and the rest of the team here to carry this on. So I think we’re in a good spot going forward. Thanks again for participating today..

Ladies and gentlemen, once again, thank you for your participation in today’s conference. This now concludes the program and you may all disconnect. Everyone have a great day..