意法半導體 (STM) 2006 Q4 法說會逐字稿

Hello and welcome to the STMicroelectronics fourth quarter 2006 conference call. [OPERATOR INSTRUCTIONS].

大家好，歡迎來到 STMicroelectronics 2006 年第四季度電話會議。 [操作員說明]。

I would like to turn the call over to Mr. Stan March Vice President, Investor Relations for STMicroelectronics.

我想將電話轉給 STMicroelectronics 投資者關係副總裁 Stan March 先生。

Mr. March.

馬奇先生。

Thank you Vicky, and thanks to all of you for joining our conference call today to discuss STMicroelectronics fourth quarter, and full year 2006 financial results.

謝謝 Vicky，也感謝大家今天參加我們的電話會議，討論 STMicroelectronics 第四季度和 2006 年全年的財務業績。

Joining us on the call today, and hosting the call from Paris today, is Carlo Bozotti, our President and Chief Executive Officer.

我們的總裁兼首席執行官卡洛·博佐蒂 (Carlo Bozotti) 今天加入我們的電話會議，並在巴黎主持今天的電話會議。

We have also -- joining Carlo, Alain Dutheil, our Chief Operating Officer, Carlo Ferro, our Chief Financial Officer, and three other members of our Executive Committee.

我們還有 - 加入我們的首席運營官 Carlo、Alain Dutheil、我們的首席財務官 Carlo Ferro 以及我們執行委員會的其他三名成員。

We have Tommi Uhari, who is representing the product Groups.

我們有 Tommi Uhari，他代表產品組。

We have Carmelo Papa, who is representing the Industrial and Multi-segment Sector, and we have Andrea Cuomo the Chief Strategy Officer.

我們有代表工業和多部門的 Carmelo Papa，還有首席戰略官 Andrea Cuomo。

Just like to make a few announcements before we begin.

只是想在我們開始之前做一些聲明。

First of all, I think all of you know that we are going to try to work through as many questions as we can, so please keep your questions to one with a quick follow up.

首先，我想你們都知道我們將嘗試解決盡可能多的問題，所以請將您的問題集中在一起，并快速跟進。

And if you have subsequent questions please re-enter the queue.

如果您有後續問題，請重新進入隊列。

We should be able to get through all the questions, given that this is a follow-on event to our earlier conference that we held here in Paris.

我們應該能夠解決所有問題，因為這是我們早些時候在巴黎舉行的會議的後續活動。

And separately, but importantly, you should also note that several of the statements that we've made today are forward-looking and, as such, are covered by the risk factors and other items that are covered in both our press release as well as in our regulatory filings including the 20-F.

另外，重要的是，您還應該注意，我們今天發表的一些聲明是前瞻性的，因此，包含在我們的新聞稿和在我們的監管文件中，包括 20-F。

So with that bit of administrative background, I'd like to turn the microphone over to Carlo Bozotti for some introductory comments.

因此，有了這些管理背景，我想把話筒交給 Carlo Bozotti，請他發表一些介紹性意見。

Carlo.

卡羅。

Thank you Stan, and thank you for joining us to all of you on our conference call today.

謝謝 Stan，也謝謝你今天加入我們的電話會議。

I would like to focus my remarks on three main areas.

我想把我的發言集中在三個主要方面。

First, the current market trends and the way in selective key markets we serve, and the impact on our fourth quarter and first quarter outlook.

首先，當前的市場趨勢和我們服務的選擇性關鍵市場的方式，以及對我們第四季度和第一季度展望的影響。

Secondly, the substantial progress made over the course of 2006 to strengthen ST.

其次，2006年強化ST取得實質性進展。

And finally, I would like to share with you our road map of 2007.

最後，我想與大家分享我們 2007 年的路線圖。

So let's get started with the review of the environment and our fourth quarter results.

因此，讓我們開始審查環境和我們第四季度的業績。

Looking first at the semiconductor environment, we did expect to see a moderation and correction in the market.

首先看看半導體環境，我們確實預計市場會出現緩和和調整。

We indicated last October that our sequential growth would be below historical levels for the Company, with Wireless and Automotive sales below normal seasonal trends.

我們去年 10 月表示，我們的連續增長將低於公司的歷史水平，無線和汽車銷售低於正常的季節性趨勢。

We expected Automotive would be affected by market weakness, particularly, in the United States, while Wireless would suffer from a product mix towards the low end.

我們預計汽車將受到市場疲軟的影響，尤其是在美國，而無線將受到低端產品組合的影響。

This was indeed the case.

確實是這樣。

However, these trends were more pronounced than we had anticipated.

然而，這些趨勢比我們預期的更為明顯。

In particular, our Wireless business came in well below historical seasonal patterns, leading to a sequential revenue decrease of 6.5% in Telecom.

特別是，我們的無線業務遠低於歷史季節性模式，導致電信收入環比下降 6.5%。

As a result our net revenues for the Company decreased 1.2% coming in at the low end of the range we had communicated.

因此，我們公司的淨收入下降了 1.2%，處於我們所傳達的範圍的低端。

On the plus side, our consumer results were pretty good with sequential growth of 5%.

從好的方面來說，我們的消費者業績相當不錯，環比增長 5%。

Here, I would like to point out that Q3 is normally seasonally stronger than Q4.

在這裡，我想指出，Q3 通常比 Q4 季節性強。

This year, however, our Q4 sales were higher, demonstrating the good acceptance of our new products and improving position with selected customers.

然而，今年我們第四季度的銷售額更高，表明我們的新產品得到了很好的接受，並且在特定客戶中的地位得到了改善。

Industrial and Computers were up about 2 percentage.

工業和計算機上漲了約 2 個百分點。

As anticipated, Automotive was flat compared to normal seasonality for Q4, which generally shows sequential improvement over Q3.

正如預期的那樣，與第四季度的正常季節性相比，汽車行業持平，這通常顯示出比第三季度有所改善。

I believe having the global presence with Automotive customers helped us, as weakness in The Americas was to some extent mitigated by a better automotive environment in Europe and in Asia.

我相信與汽車客戶建立全球聯繫對我們有所幫助，因為歐洲和亞洲更好的汽車環境在一定程度上緩解了美洲的疲軟。

Lower than expected revenues, and the less favorable Wireless mix put additional pressure on our margins and operating performance during the fourth quarter.

低於預期的收入，以及不太有利的無線產品組合，給我們第四季度的利潤率和經營業績帶來了額外壓力。

However, despite this sales performance and a tougher currency environment, we did see sequential expansion of the gross margin to 36.3% due to our cost reduction activities we have shared with you in the past.

然而，儘管有這樣的銷售業績和更嚴峻的貨幣環境，但由於我們過去與您分享的成本削減活動，我們確實看到毛利率連續擴大至 36.3%。

The resolution of a tax claim benefited net income in the quarter also.

稅收索賠的解決也使該季度的淨收入受益。

Turning to the first quarter, let me begin by saying that we see a continuation of the market correction in some of the major application we address.

談到第一季度，首先讓我說，我們看到我們所處理的一些主要應用程序的市場調整仍在繼續。

And the level of this multi-quarter correction is somewhat higher than what we had expected.

而且這種多季度修正的水平比我們預期的要高一些。

As a result, our first quarter revenue outlook assumes a sequential decrease of between minus 3 and minus 11%.

因此，我們第一季度的收入展望假設環比下降 -3% 至 -11%。

Looking to the full year 2007, we believe that the semiconductor market should continue to show year-over-year growth, estimated in the range of 6 to 8%.

展望 2007 年全年，我們認為半導體市場應該會繼續呈現同比增長，估計在 6% 到 8% 的範圍內。

But we believe it will be back-end loaded compared to the quarterly trends of 2006.

但我們相信，與 2006 年的季度趨勢相比，它將會是後端負載。

Essentially, 2007 is to some extent the reverse of 2006, with an expectation of a softer first half, and strengthening in the second half of the year.

從本質上講，2007 年在某種程度上與 2006 年相反，預計上半年會走軟，下半年會走強。

Now what is ST doing to address the situation?

現在ST正在做什麼來解決這個問題？

Our key focus in our management is on managing the absolute level of our inventory, and this is a top priority in the first two quarters of the year.

我們管理的重點是管理庫存的絕對水平，這是今年前兩個季度的重中之重。

We finished 2006 with inventory about $50m higher than we had at the end of Q3.

2006 年底，我們的庫存比第三季度末高出約 5000 萬美元。

Half of this was exchange rate related, and the other half arose from revenues coming in at the low end of our outlook, compared to the mid-point.

其中一半與匯率有關，另一半來自與中點相比處於我們展望低端的收入。

Doing some simple math, revenues were lower by about $80m, currency added $25m, so our efforts with factory loadings and closing, certainly helped but not sufficiently.

做一些簡單的計算，收入減少了大約 8000 萬美元，貨幣增加了 2500 萬美元，所以我們在工廠裝載和關閉方面的努力當然有所幫助，但還不夠。

As a result, our revenue outlook and inventory growth, our gross margin in Q1 will reflect unfavorable fab loading conditions, leading to a gross margin expectation of about 35, plus or minus 1 percentage point.

因此，我們的收入前景和庫存增長，我們在第一季度的毛利率將反映不利的晶圓廠裝載條件，導致毛利率預期約為 35，正負 1 個百分點。

Now, in spite of the weakness in the fourth quarter, ST delivered strong year- over-year improvement in financial performance, with revenues up 11% to $9.85b, driven by targeted key accounts up 48% year over year and by our mass market efforts, or sales outside the top 50 customers, which rose 17% over 2005 levels.

現在，儘管第四季度表現疲軟，但 ST 的財務業績同比增長強勁，收入增長 11% 至 $9.85b，這主要得益於目標大客戶同比增長 48% 以及我們的大眾市場前 50 名客戶以外的銷售額，比 2005 年的水平增長了 17%。

Regionally, sales in Japan grew 31% in a local market that was up 7 to 8%, while Greater China was up 16%.

從地區來看，日本本土市場的銷售額增長了 31%，增幅為 7% 至 8%，而大中華區的銷售額增長了 16%。

In summary, ST gained market share in 2006.

總之，ST 在 2006 年獲得了市場份額。

Operating income increased by $433m to $677m, net of other factors 37% of the $972m in incremental sales achieved in 2006 [if] the [EBIT declined].

扣除其他因素後，營業收入增加了 4.33 億美元，達到 6.77 億美元，佔 2006 年實現的 9.72 億美元增量銷售額的 37% [如果] [EBIT 下降]。

Net income was $782m compared to $266m in 2005.

淨收入為 7.82 億美元，而 2005 年為 2.66 億美元。

And ST generated over $650m in net operating cash flow during 2006.

ST 在 2006 年產生了超過 6.5 億美元的淨運營現金流。

Looking at the key operating metrics gross margins and -- gross margin expanded 160 basis points.

查看關鍵運營指標毛利率和 - 毛利率擴大了 160 個基點。

Operating margin was up over 400 basis points.

營業利潤率上升了 400 多個基點。

Operating expenses improved to 27.7% of net revenues under our 28% target level.

營業費用占淨收入的 27.7%，低於我們 28% 的目標水平。

We improved the operating performance of each our major product groups and RONA improved to 8.8%, substantially doubling from the level in 2005.

我們改善了每個主要產品組的經營業績，RONA 提高到 8.8%，比 2005 年的水平大幅翻了一番。

So the signs are clear.

所以跡像很明顯。

Our product portfolio and marketing strategies, as well as our cost restructuring initiatives, are delivering results for ST and are helping the Company better navigate the current market correction.

我們的產品組合和營銷策略，以及我們的成本重組計劃，正在為 ST 帶來成果，並幫助公司更好地駕馭當前的市場調整。

Overall our market share is growing, our financial performance is improving, and our balance sheet is stronger.

總體而言，我們的市場份額在增長，我們的財務業績在改善，我們的資產負債表也更加穩健。

Now, before opening for questions let's talk more broadly about our business objectives for 2007, and the continuous progress we plan to make, notwithstanding some negative headwind.

現在，在開始提問之前，讓我們更廣泛地談談我們 2007 年的業務目標，以及我們計劃取得的持續進展，儘管存在一些不利因素。

In early December we announced a corporate reorganization.

12 月初，我們宣布了公司重組。

As a result, on January 1, 2007 we have organized our NOR and NAND Flash business into a standalone segment.

因此，2007 年 1 月 1 日，我們將 NOR 和 NAND 閃存業務組織成一個獨立的部門。

Further, we are moving ahead on creating a separate legal entity in connection with our strategic repositioning of this business.

此外，我們正著手創建一個獨立的法人實體，以配合我們對該業務的戰略重新定位。

The Flash Memory Group represented 16% of net revenues for 2006, and with the first quarter we will provide operating data.

閃存組佔 2006 年淨收入的 16%，我們將提供第一季度的運營數據。

We are also driving a significant reduction in our capital intensities.

我們還在推動資本密集度的大幅降低。

This is visible, not only in our 2006 results, with our CapEx to sales ratio down to 15.6% from over 20% just a few years ago, but also in our guidance for 2007 spending.

這不僅體現在我們 2006 年的業績中，我們的資本支出佔銷售額的比率從幾年前的 20% 以上降至 15.6%，而且體現在我們對 2007 年支出的指導中。

Specifically, we have set our initial capital expenditure budget for 2007 at approximately $1.2b compared to $1.5b in 2006, representing a 20% reduction.

具體而言，我們將 2007 年的初始資本支出預算設定為大約 $1.2b，而 2006 年為 $1.5b，減少了 20%。

We have initiated a new CapEx to sales ratio target of 12% through a combination of a less capital intensive product portfolio, increased usage of foundries for non-proprietary technologies, and the optimization of our manufacturing facilities.

通過結合減少資本密集度的產品組合、增加代工廠對非專有技術的使用以及優化我們的製造設施，我們已經啟動了 12% 的新資本支出與銷售額比率目標。

We are confident we will reach that goal this year.

我們有信心在今年實現這一目標。

Our product portfolio continues to strengthen, and in many ways it is the most critical effort we have underway.

我們的產品組合不斷加強，在許多方面這是我們正在進行的最關鍵的努力。

I believe we are developing the strongest pipeline of new products in our history with the important implications for both our market share and margins.

我相信我們正在開發我們歷史上最強大的新產品線，這對我們的市場份額和利潤率都有重要影響。

As you know, we have recently reorganized our largest segment, ASG and IMS, and strengthened the management of both.

如您所知，我們最近重組了我們最大的部門ASG和IMS，並加強了兩者的管理。

I would like to spend the last few minutes of my remarks focusing on the changes and emphasis we are making in these two organizations.

我想在發言的最後幾分鐘集中討論我們在這兩個組織中所做的改變和強調。

As an example, looking at our business units that participate in a digital consumer segment, we can see the improvement in profitability and financial return from [investing] in each quarter of 2006.

例如，看看我們參與數字消費者細分市場的業務部門，我們可以看到 2006 年每個季度 [投資] 的盈利能力和財務回報有所提高。

From loss making in Q1 to attractive financial performance in Q4, the primary driver of this improvement has been the new generation of products for the high-end definition market.

從第一季度的虧損到第四季度有吸引力的財務業績，這一改進的主要驅動力是面向高端清晰度市場的新一代產品。

The same sort of initial loss making when starting the business, to sound financial performance trend, is likewise seen in computer systems, where our new products effort in printers are also paying off.

在開始業務時同樣的初始虧損，為了健全的財務業績趨勢，在計算機系統中也同樣可以看到，我們在打印機方面的新產品努力也得到了回報。

While these types of improved results were largely obscured by the Wireless performance in the 2006 fourth quarter, they are real.

雖然這些類型的改進結果在很大程度上被 2006 年第四季度的無線性能所掩蓋，但它們是真實存在的。

And in the case of Wireless our new products from activity for multimedia and for the 3G base band are ready, qualified and prepared for the market [resurgence].

就無線而言，我們的多媒體和 3G 基帶活動的新產品已經準備就緒、合格並為市場做好準備 [復興]。

For the industrial and multi-segment sector we are planning to build on the successes of 2006 sales growth of 19% while maintaining a RONA over 20%.

對於工業和多部門部門，我們計劃在 2006 年銷售額增長 19% 的成功基礎上再接再厲，同時將 RONA 保持在 20% 以上。

Further evidence was seen in the ranking of our industrial segment that grew to number one position in the industry.

在我們的工業部門的排名中可以看到進一步的證據，該排名上升到行業第一的位置。

Advanced Analog and [media] sales grew faster than, and has a superior financial return, and there are still many opportunities to realize here.

Advanced Analog 和 [media] 的銷售額增長更快，並且具有優越的財務回報，而且這裡仍有很多機會可以實現。

In summary, looking back, the inflation point for ST began in mid-2005, as our efforts started to result in a reversal of our market share losses and the commencement of our market share gains. 2006 was a period of hard work, diligently focused on strengthening all areas of the Company, resulting in stronger new growth and earnings improvement.

總之，回顧過去，ST 的通脹點始於 2005 年年中，因為我們的努力開始扭轉我們的市場份額損失並開始增加市場份額。 2006年是奮發圖強的一年，努力把公司各方面做強做大，新的增長點和盈利能力都得到了提升。

Looking ahead, 2007 is poised to be a year where ST's longer-term potential becomes more evident and visible.

展望未來，2007 年將是 ST 的長期潛力變得更加明顯的一年。

Now let me stop, so my colleagues and I can take your questions.

現在讓我停下來，讓我和我的同事們回答你們的問題。

Thank you.

謝謝。

Thank you Carlo.

謝謝卡羅。

Vicky, if you would assemble the question queue please, we'd like to begin as soon as possible.

Vicky，如果你願意整理問題隊列，我們希望盡快開始。

Thank you. [OPERATOR INSTRUCTIONS].

謝謝。 [操作員說明]。

The first question is from Mr. Nicolas Gaudois, Deutsche Bank.

第一個問題來自德意志銀行的Nicolas Gaudois 先生。

Please go ahead sir.

先生，請繼續。

Yes, hi there, good afternoon.

是的，你好，下午好。

My question will be on margins by mix.

我的問題將是混合利潤率。

If I look at the current cycle it seems like you effectively have peaked here at 46.3% in Q4.

如果我看一下當前的周期，似乎您實際上已經在第四季度達到了 46.3% 的峰值。

If I look back at 2004 the peak was 47.9% for the last quarter.

如果我回顧 2004 年，最後一個季度的峰值是 47.9%。

And when looking at MPG within this period of time, we've got broadly a business which is [either] on breakeven.

在這段時間內觀察 MPG 時，我們的業務廣泛處於盈虧平衡狀態。

So, it's difficult to rationalize the fact that margins are lower, despite cost cutting only because of Flash.

因此，很難合理化利潤率較低的事實，儘管成本削減只是因為閃存。

Can you give us a bit of clarity, in your view, why margins are still [really lower] in the current cycle, despite all the efforts you've made since the first restructuring in September '03?

在您看來，儘管您自 03 年 9 月首次重組以來做出了所有努力，但在您看來，為什麼利潤率在當前週期中仍然 [確實較低]？

Thank you.

謝謝。

Okay, Carlo Ferro will take your question.

好的，Carlo Ferro 將回答您的問題。

Hi Nicholas, good afternoon.

嗨，尼古拉斯，下午好。

Your question at the end it was on the year-over-year dynamic of the margin.

你最後的問題是關於利潤率的同比動態。

And, of course, we are not completely happy about the progression from Q4 to Q4 or, if you wish, similarly the progression from Q1 '06 to the mid-point of our guidance for Q1 '07.

當然，我們對從第 4 季度到第 4 季度的進展並不完全滿意，或者，如果您願意，我們對從 06 年第 1 季度到我們對 07 年第 1 季度指導的中點的進展也不完全滿意。

We have made significant initiatives in order to mitigate the current exposure.

我們已採取重大舉措以減輕當前的風險敞口。

And you have noticed that we are not any longer making a point on a few percentage points of exchange rate volatility quarter after quarter.

而且您已經註意到，我們不再在一個季度又一個季度的匯率波動率上強調幾個百分點。

However, when comparing these two periods we have to take into account that in both Q4 '05 and Q1 '06 the exchange rate was at 1.20 and today it is -- been 1.28 for Q4, 1.29 is the reference point for our guidance for Q1 '07.

然而，在比較這兩個時期時，我們必須考慮到 05 年第四季度和 06 年第一季度的匯率均為 1.20，而今天是——第四季度為 1.28，1.29 是我們對第一季度指導的參考點'07。

And this is a 7% swing, and the 7% swing regarding more than 1.5 of impact on our gross margins.

這是 7% 的波動，7% 的波動對我們毛利率的影響超過 1.5%。

Of course, having said that, there is a sign of some progress from the 35.4% of Q1 '06 to the mid-point at 35 of this current quarter [of our better] -- the Q4 '05 improved the Q4 '06.

當然，話雖如此，有跡象表明，從 06 年第一季度的 35.4% 到本季度（我們更好的）的中點 35% 有所進步——05 年第四季度改進了 06 年第四季度。

Another key [calculization] are the manufacturing performance.

另一個關鍵[計算]是製造性能。

In the manufacturing performance the margin [wholly detracted the expected savings of the values of the restructuring initiative.

在製造業業績中，利潤[完全減損了重組計劃價值的預期節省。

However both the Q4 '06 and Q1 '07 are heavily affected by cost of our situation.

然而，06 年第 4 季度和 07 年第 1 季度都受到我們情況成本的嚴重影響。

And I would consider approximately 1 point of effect from -- or slightly less than 1 point of negative effect from the [saturation] in this respect.

在這方面，我會考慮來自 [飽和度] 的大約 1 點影響或略低於 1 點的負面影響。

Your question what are the [companies] doing on these specific respects.

你的問題是[公司]在這些具體方面做了什麼。

May -- I have also announced where [sure] Carlos addressed and other questions will address, about the mitigating of our capital expenditure.

5 月——我還宣布了 [確定] Carlos 將在何處解決以及其他問題將解決的問題，關於減少我們的資本支出。

We have not expressed the CapEx guidance at $1.2b are significantly below the historical record of the Company.

我們沒有表示 1.2b 美元的資本支出指導顯著低於公司的歷史記錄。

And, of course, [getting] overtime makes a difference in our manufacturing machine that, could avoid in the future a major hit from the saturation as we have incurred in last quarter, and we are incurring to a certain extent also in this current quarter.

而且，當然，[獲得] 加班對我們的製造機器產生了影響，可以避免在未來因飽和而遭受重大打擊，就像我們在上個季度發生的那樣，我們在本季度也在一定程度上發生了飽和.

In respect to the product portfolio, there are many various items for digital and spends for sure.

關於產品組合，有許多不同的數字項目和支出肯定。

During the conversation we will address what is very evident in our number is that, the Flash business is, as we have anticipated, diluting.

在談話中，我們將解決我們的數字中非常明顯的一點，即閃存業務正如我們所預期的那樣正在稀釋。

The overall gross margin or ST are significantly diluting the overall gross margin of ST.

整體毛利率或ST正在顯著攤薄ST整體毛利率。

Okay, thank you very much Carlo.

好的，非常感謝 Carlo。

Just a quick follow up as well for Carlo, Carlo Ferro.

Carlo，Carlo Ferro 也只是快速跟進。

Could you put some guidance please on operating expenses for Q1 and also [which would] develop for the rest of the year?

您能否就第一季度的運營支出以及今年剩餘時間的運營支出提供一些指導？

Thank you.

謝謝。

Yes, sure Nicolas.

是的，當然是尼古拉斯。

When we talk -- just address a similar question three months ago we had anticipated that some increase in the dollar amount of [effects] from Q3 to Q4, and I would say that actual number has not realized exactly as expected.

當我們談話時——三個月前解決一個類似的問題，我們預計從第三季度到第四季度的[影響]美元數量會有所增加，我會說實際數字並沒有完全按照預期實現。

To notice that, I believe the actual number is perfectly in line within the average of the [how say, motives] of analysts that I am familiar with.

要注意到這一點，我相信實際數字完全符合我所熟悉的分析師的[如何說，動機]的平均值。

Of course, the top line hit, the OpEx to sales ratio, 28.6% in Q4 is above our target.

當然，第四季度的運營支出與銷售額之比為 28.6%，高於我們的目標。

And this is only driven by the top line.

這僅由頂線驅動。

Moving forward, I would expect that in Q1 '07 expenses in absolute dollar, of course, after the [preferential] rate will go slightly down from -- sequentially, from Q4 '06 to Q1 '07 there will be slightly down in absolute dollar.

展望未來，我預計 07 年第一季度的絕對美元支出，當然，在 [優惠] 利率將略有下降之後，從 06 年第四季度到 07 年第一季度，絕對美元將略有下降.

And I would expect that as the revenues will recover, and this is likely in second quarter, we will be back below the 28%, which is our target.

我預計隨著收入的恢復，這很可能在第二季度，我們將回到 28% 以下，這是我們的目標。

And our plan is to have a fiscal year 2007 with OpEx to sales ratio overall within our -- or below our 28% target, progressing quarter after quarter, and by [progressively] leveraging on and the revenues growth, while continuing to tightly control the expenses in absolute dollars.

我們的計劃是在 2007 財年實現 OpEx 與銷售額的總體比率在我們的目標之內——或低於我們 28% 的目標，一個季度一個季度地取得進展，並通過[逐步]利用收入增長，同時繼續嚴格控制以絕對美元計算的費用。

Is this the clarification in absolute terms '07 versus '06, you should see this how much, or what do you think?

這是絕對術語 '07 與 '06 的澄清，你應該看到多少，或者你怎麼看？

Not so -- how say that on the overall we are also, in the end of January on the possibility to continue to [modulate] 22-- our expenses trend, especially in the second half of the year.

不是這樣——怎麼說總體上我們也是，在 1 月底有可能繼續 [調製] 22——我們的支出趨勢，尤其是在今年下半年。

So, in this respect I would prefer to remain within our objective, which is the one of keeping for the OpEx to sales ratio at or below 28%.

因此，在這方面，我寧願保持在我們的目標之內，也就是將 OpEx 與銷售額的比率保持在 28% 或以下。

Okay.

好的。

Thank you very much Carlo.

非常感謝卡洛。

Thank you Nicolas.

謝謝尼古拉斯。

Okay, I think we are ready for the next question please.

好的，我想我們已經準備好回答下一個問題了。

Next question from Mr. Amit Kapur, Piper Jaffray.

下一個問題來自 Piper Jaffray 的 Amit Kapur 先生。

Please go ahead sir.

先生，請繼續。

Great, thank you very much.

太好了，非常感謝。

Just to -- given the shift that we are seeing towards more low-end phones in the handset market, I was wondering do you have any plans to shift your product development to further address that market.

只是 - 考慮到我們在手機市場上看到更多低端手機的轉變，我想知道你是否有任何計劃改變你的產品開發以進一步滿足該市場。

Well, I think it's a question that will be taken by Tommi Uhari, General Manager of our MMC the Mobile and Multimedia organization.

好吧，我想這個問題將由我們移動和多媒體組織 MMC 的總經理 Tommi Uhari 提出。

Hello, this is Tommi Uhari.

你好，我是湯米烏哈里。

So, our product portfolio is very much geared towards succeeding with the higher end of the mobile phone product portfolio.

因此，我們的產品組合非常適合在高端手機產品組合中取得成功。

We don't see the increase in the [reductive] share of the low-end market changing our strategy.

我們沒有看到低端市場[減少]份額的增加改變了我們的戰略。

And that is mainly driven by our understanding that, in the higher end, the margin opportunities are also significantly higher.

這主要是由於我們的理解，即在高端，利潤機會也明顯更高。

In the low-end space we are, of course, also enjoying some significant business with the designs that we have in that space.

當然，在低端領域，我們也通過我們在該領域的設計享受一些重要的業務。

But the bulk of the new investments that we are making here are gearing towards the mid and the higher range of the market.

但我們在這裡進行的大部分新投資都面向中高端市場。

Great, thank you.

太好了謝謝。

And maybe as a quick follow up, if you could talk about your outlook for the 3G handset market during 2007?

也許作為快速跟進，您能否談談您對 2007 年 3G 手機市場的展望？

I think, overall, that we've seen market volume growth estimates, on the level of sales to market, market [this year is] around 100 -- sorry, for '06 is about 100, '07 would be in the level of 150m.

我認為，總的來說，我們已經看到市場銷量增長估計，在市場銷售水平上，[今年] 市場約為 100——抱歉，'06 約為 100，'07 將處於150 米。

Let's say we are quite comfortable with that estimate.

假設我們對這個估計很滿意。

And we believe that, due to our relationship with Ericsson Mobile platform our absolute share of the business that we can turn from that market will increase significantly towards the end of the year.

而且我們相信，由於我們與愛立信移動平台的關係，我們可以從該市場轉向的業務的絕對份額將在年底前顯著增加。

Great, thank you very much.

太好了，非常感謝。

Next question please Vicky.

下一個問題請 Vicky 回答。

Next question from Mr. Didier Scemama, ABN Amro.

下一個問題來自荷蘭銀行的 Didier Scemama 先生。

Please go ahead sir.

先生，請繼續。

Yes, thanks for taking my question.

是的，謝謝你提出我的問題。

I think I am going to remain on the Wireless theme.

我想我將繼續使用無線主題。

Two questions.

兩個問題。

First of all, can you maybe give us an idea, Tommi, about any plans you may have to develop a system solution for the 3G, 3.5G market, i.e., you own base band, with your own [ESP], your own software, as opposed to using the [AMP] software?

Tommi，首先，您能否給我們一個想法，關於您可能必須為 3G、3.5G 市場開發系統解決方案的任何計劃，即您擁有基帶、您自己的 [ESP]、您自己的軟件，而不是使用 [AMP] 軟件？

That's my first question.

這是我的第一個問題。

And second, looking at the broad trend of the handset industry where you've been relying quite excessively, in fact, on Nokia [SX] in the RF and palm hand management market.

其次，看看手機行業的大趨勢，事實上，在 RF 和手掌管理市場上，您一直過度依賴諾基亞 [SX]。

What is the chance that, over the next three years or so that market goes away?

在未來三年左右，該市場消失的可能性有多大？

And the role of ODM increasing you are not able essentially to address the opportunity that Nokia may address, may outsource more phones to ODMs?

而 ODM 的作用越來越大，你不能從根本上解決諾基亞可能解決的問題，可能會將更多手機外包給 ODM？

[This is] my first comment on our own plan for the chipset on the 2.5G and 3G.

[這是]我對我們自己的 2.5G 和 3G 芯片組計劃的第一次評論。

So, basically, currently our strategy is built that -- on working in a close partnership together with our main customers.

因此，基本上，目前我們的戰略是建立在與我們的主要客戶密切合作的基礎上的。

And we think that with the 3G market being quite captive towards the platform players that are in that market, we believe that this is a very sound strategy.

我們認為，由於 3G 市場非常受制於該市場中的平台參與者，我們認為這是一個非常合理的策略。

Like I already commented on the low-end handsets, I think we are seeing a similar phenomena on the 2.5G, so that will be a very [competitive] market, where the margins will be quite a challenge.

就像我已經評論過的低端手機一樣，我認為我們在 2.5G 上看到了類似的現象，因此這將是一個非常 [競爭] 的市場，利潤率將是一個相當大的挑戰。

So, our strategy here is to continue with the current customer arrangements we have, and serve those customers to the best of our ability.

因此，我們在這裡的策略是繼續我們現有的客戶安排，並儘我們最大的能力為這些客戶提供服務。

And we do not have a plan of developing our own solution at the moment.

我們目前沒有開發自己的解決方案的計劃。

Okay, great.

好的，太好了。

And you know -- if you let me continue on that for while.

你知道 - 如果你讓我繼續說一會兒。

So in order for us to succeed well with our [normal] this application for this effort we, of course, need the communication technology to go with that.

因此，為了讓我們的 [正常] 這個應用程序取得成功，我們當然需要通信技術來配合這項工作。

And in the engagements that we've had with the top OEMs we find that -- we find our customers extremely competent, and capable to integrate our application processor together with the modem of their choice.

在我們與頂級 OEM 的合作中，我們發現——我們發現我們的客戶非常有能力，並且能夠將我們的應用處理器與他們選擇的調製解調器集成在一起。

So we are not seeing that this is limiting our market opportunity in that space.

所以我們沒有看到這限制了我們在該領域的市場機會。

We are also working closely with the modem vendors to ease the integration effort for our customers.

我們還與調製解調器供應商密切合作，以簡化我們客戶的集成工作。

Right.

正確的。

And moving onto your second question, which was about [the RF1] and power management.

接下來是關於 [RF1] 和電源管理的第二個問題。

So, that our position at the current customer base there pose a significant risk in 3G in the next three years, I think not.

因此，我們在當前客戶群中的地位在未來三年內對 3G 構成重大風險，我認為不會。

Perfect.

完美的。

And my follow-up question would be, just looking at the 2006 results, where ST has outperformed the market overall.

我的後續問題是，只看 2006 年的結果，ST 的整體表現優於市場。

However, if I look at the application-specific groups, which I think has grown by about 8%, based on a preliminary [SIA] data it seems like the application-specific market has grown by about 10%.

然而，如果我看一下我認為增長了約 8% 的特定應用群體，根據 [SIA] 初步數據，似乎特定應用市場增長了約 10%。

And the other thing is, given the amount of R&D you've pumped into the business in the last five years and given the low base, in fact, that we have in 2005, it seems like the new products, so far, have not really delivered any satisfactory results.

另一件事是，考慮到你們在過去五年中投入到業務中的研發數量，並且事實上，我們在 2005 年的基數很低，到目前為止，似乎新產品還沒有確實交付了令人滿意的結果。

So do you expect an acceleration of the application-specific revenue group in 2007, or not?

那麼，您是否預計 2007 年特定應用程序收入組會加速增長？

I think that on the statistics and the -- Carlo Bozotti speaking.

我認為關於統計數據和 - Carlo Bozotti 發言。

I think that there is, of course, there is a main block that is our dedicated products for industrial applications that is not, from an organizational point of view, under the application-specific groups.

我認為，當然，有一個主要部分是我們用於工業應用的專用產品，從組織的角度來看，它不屬於特定應用組。

But they are still -- is part of the dedicated products.

但它們仍然是專用產品的一部分。

And this is a very, very important segment for us.

這對我們來說是一個非常非常重要的部分。

It is not -- it's very high margin products by the way.

它不是 - 順便說一下，它是非常高利潤的產品。

And it is -- and I am talking about the industrial segment that is part of this year in the new IMS organization.

它是 - 我說的是今年新 IMS 組織中的工業部分。

And, of course, when we can get the reporting and the market statistics, this is to be considered in the application-specific products, because this is the case.

當然，當我們可以獲得報告和市場統計數據時，這將在特定應用產品中得到考慮，因為情況就是如此。

In this area we have grown at a very high rate at year end 2006 and we believe that our growth last year, on the overall, and if we split our business in Discrete, Microcontrollers, Dedicated products, I believe that in the area of Dedicated products we have grown at the same pace as the market.

在這個領域，我們在 2006 年底以非常高的速度增長，我們相信我們去年的增長，總體而言，如果我們將我們的業務拆分為離散、微控制器、專用產品，我相信在專用領域我們的產品與市場同步增長。

While at the Company level we have grown more than the average of the market, thanks to big increase in Linear, standard Linear and Advance Analog, Discrete, particularly [Power Loss] and also Flash Memories.

雖然在公司層面，我們的增長超過了市場平均水平，這要歸功於線性、標準線性和高級模擬、離散，特別是 [Power Loss] 和閃存的大幅增長。

Having said that, I think that, as you know we started a major refocusing effort mid-2005, and let's go through some of the examples, let's take disc drives.

話雖如此，我認為，如您所知，我們在 2005 年年中開始了一項重大的重新調整工作，讓我們通過一些示例，讓我們以磁盤驅動器為例。

In the disc drives -- and, of course, disc drives is the major part or the major portion of our computer peripherals, there was a clear change in the strategy.

在磁盤驅動器方面——當然，磁盤驅動器是我們計算機外圍設備的主要部分或主要部分，戰略發生了明顯的變化。

So we have started to develop system-on-a-chip disc drive solutions based on our own ideas and this products is, of course, is our development cycle time, but is also the cycle time of our customers to include the products in their own systems.

所以我們已經開始根據我們自己的想法開發片上系統磁盤驅動器解決方案，這個產品當然是我們的開發週期時間，也是我們客戶將產品包含在他們的產品中的周期時間自己的系統。

The effect of this will be at the mid of this year.

這將在今年年中產生影響。

This is one example that I think is very important.

這是我認為非常重要的一個例子。

The other example that I would like to make is the digital consumer, -- digital consumer.

我想舉的另一個例子是數字消費者——數字消費者。

It was -- it is for sure that in 2004 and 2005 we have lost ground.

這是——可以肯定的是，在 2004 年和 2005 年我們已經失去了優勢。

But during 2006 we have regained a lot in this field, and we are more and more confident that with the 90 nanometer products that we are introduce, and where we are now expanding our customer base, we are regaining share and we have now introduced the first 65 nanometer products for dual TV set top box for the high definition TV, for the high definition DVD, the Blu-ray.

但在 2006 年期間，我們在這個領域收復了很多，我們越來越有信心，隨著我們推出的 90 納米產品，以及我們現在正在擴大客戶群的地方，我們正在重新奪回份額，我們現在推出了第一個65納米產品用於高清電視的雙機頂盒，用於高清DVD、藍光。

We are absolutely comfortable that, with this wave of new products, and digital consumers, we are regaining share in that respect.

我們絕對感到欣慰的是，隨著這一波新產品和數字消費者的出現，我們正在重新奪回這方面的份額。

In the Wireless I think this year is the year of new initiatives.

在無線方面，我認為今年是新舉措的一年。

As we mentioned, all the new products are hitting the market this year, and even in the area of network in that we are not discussing so frequently, I think that [inaudible] is going to be in 2007.

正如我們提到的，所有新產品都在今年投放市場，甚至在我們不那麼頻繁討論的網絡領域，我認為 [聽不清] 將在 2007 年上市。

So, this is an area of focus.

所以，這是一個重點領域。

Our G applications, the product groups, of course, are very, very vital to ST.

我們的 G 應用程序，產品組，當然對 ST 非常非常重要。

Also the industrial product group is very, very vital to ST.

工業產品組對 ST 也非常非常重要。

So, I think that [beginning to see] in a block that there is a major effort to accelerate the R&D effectiveness on these products.

因此，我認為 [開始看到] 在加速這些產品的研發效率方面做出了重大努力。

Okay.

好的。

Just a clarification from what you said this morning, because I am afraid I did not really understand.

只是根據您今天早上所說的進行澄清，因為恐怕我並沒有真正理解。

When you talk about [Krol 2], and the fact that you are going to align with technology leaders, what does that mean?

當你談到 [Krol 2]，以及你將與技術領導者結盟的事實時，這是什麼意思？

Does that mean that you follow the path of one of your American competitors?

這是否意味著您會追隨您的一位美國競爭對手的道路？

Yes, but we have -- I think that basically what we will do is the following in very practical terms because we understand.

是的，但我們已經——我認為基本上我們要做的是非常實際的以下內容，因為我們理解。

So the 45 nanometer platform will be changed the way it was foreseen.

因此，45 納米平台將按照預期方式進行更改。

In fact, we have a budget with the previous -- with the existing alliance partners.

事實上，我們與以前的聯盟夥伴有預算。

And the funds to support and to complete the development of the 45 nanometer platform are available from ST, and from the two existing partners.

支持和完成 45 納米平台開發的資金來自 ST 和兩個現有合作夥伴。

So this would be concluded in the course of 2007.

因此，這將在 2007 年期間完成。

Then, starting from 2008, there will be a discontinuation.

然後，從 2008 年開始，將停產。

And the discontinuation is such, because of the increase of the effort that would be required to fully support the 32 nanometer platform in Krol 2, we have decided the core technology on the 32 nanometer would become available through partnership with the industry leaders in this field.

停產是這樣的，因為完全支持 Krol 2 中的 32 納米平台所需的工作量增加，我們決定通過與該領域的行業領導者合作，提供 32 納米的核心技術.

And, of course, it's obvious that we have [alternative], while, in Krol we will focus on the development of the proprietary technology deliveries that are fundamental for our Wireless business and, specifically, [to give] us a sense of technology for the [inaudible] [modules].

而且，當然，很明顯我們有 [alternative]，而在 Krol，我們將專注於開發對我們的無線業務至關重要的專有技術交付，具體來說，[給]我們一種技術感[聽不清] [模塊]。

The other frequency, [CMOS] technology for, of course, the communication portion of the cellular phone, and the analog CMOS for the power management application in the cellular phone.

另一個頻率，[CMOS] 技術，當然是用於手機的通信部分，以及用於手機電源管理應用的模擬 CMOS。

So, it is clearly changing the structure but, of course, Krol is and remain a very important asset and still is the key center for the most advanced technology development.

因此，它顯然正在改變結構，但是，當然，Krol 是並且仍然是非常重要的資產，並且仍然是最先進技術開發的關鍵中心。

And the focus will be on derivatives technologies.

重點將放在衍生技術上。

And while on the bulk, on the [CMOS] bulk we will align with industry leaders, and just make sure that this will be available in our facility to integrate and develop the derivatives on one side, and also to support a portion of our manufacturing activity.

在散裝上，在 [CMOS] 散裝上，我們將與行業領導者保持一致，並確保我們的工廠可以使用它來一方面集成和開發衍生物，並支持我們的一部分製造活動。

And, of course, the other portion will be supported by foundries from external, or by external foundries.

當然，另一部分將由外部代工廠或外部代工廠提供支持。

But, I don't understand how you are going to then continue to negotiate and partner with people like Seagate and HP and so on that uses your leading edge CMOS process for their [ISPs].

但是，我不明白您將如何繼續與希捷和惠普等使用您的 [ISP] 領先的 CMOS 工藝的公司進行談判和合作。

How do you keep the relationship going essentially?

你如何從本質上保持這種關係？

I think this is also the pressure of our customers, and we need to take our customers -- I don't like to mention customers, we did mention customers, but we have customers that are demanding that we have two manufacturing facilities.

我認為這也是我們客戶的壓力，我們需要接受我們的客戶——我不想提客戶，我們確實提到了客戶，但我們有客戶要求我們有兩個製造工廠。

They want to have a double source right.

他們希望擁有雙重來源權。

So, in our manufacturing strategy the sourcing ST of the CMOS logic is, of course, Krol 2.

因此，在我們的製造策略中，CMOS 邏輯的採購 ST 當然是 Krol 2。

But the alternative source is, and will be, we believe that it will be more outside.

但替代來源是，而且將會是，我們相信它會更多地來自外部。

But this is not new.

但這並不新鮮。

For instance, we are developing today products with our top telecom customers where it is very, very clear that we have a manufacturing capacity available inside in [in ST].

例如，我們今天正在與我們的頂級電信客戶一起開發產品，很明顯我們在 [ST] 內部擁有可用的製造能力。

But is also very, very clear to them that we have an important pick up that is [vital] for flexibility up and down outside ST.

但他們也非常非常清楚，我們有一個重要的選擇，這對於 ST 之外的上下靈活性至關重要。

And let's not forget that as part of the existing [Krol] alliance we have an external partner that we have [inaudible].

我們不要忘記，作為現有 [Krol] 聯盟的一部分，我們有一個外部合作夥伴 [聽不清]。

So, this is not changing, and we will have two manufacturing sources, one side that is Krol and one outside that is the foundry services.

所以，這不會改變，我們將有兩個製造來源，一側是 Krol，另一側是代工服務。

Most of our customers require that we have two sources, and one source is being [outsourced], and this is exactly what we are doing.

我們的大多數客戶要求我們有兩個來源，一個來源被[外包]，而這正是我們正在做的。

Okay thanks.

好的謝謝。

Vicky, next question please.

Vicky，請問下一個問題。

Next question is from Mr. Sandeep Deshpande, JPMorgan.

下一個問題來自摩根大通的 Sandeep Deshpande 先生。

Hello.

你好。

Hello.

你好。

Hi, just the first question I have is on your inventory development.

您好，我的第一個問題是關於您的庫存開發。

Your inventories rose from Q3 to Q4, and now you have said that you are going to reduce loading to be able to address that.

你們的庫存從第三季度增加到第四季度，現在你們說你們將減少裝載量以解決這個問題。

Based on the current orders you have, and your guidance for Q1, how do you think your inventories are going to trend at the end of Q1?

根據您當前的訂單以及您對第一季度的指導，您認為您的庫存在第一季度末的趨勢如何？

I guess the question is for me, and this is Carlo Ferro.

我想這個問題是給我的，我是 Carlo Ferro。

Yes, hi, Sandeep.

是的，嗨，桑迪普。

First of all, as Carlo has mentioned during the introduction, the inventory increased by 50m occurred in the fourth quarter, has been the factor of the market situation not allowing the Company to hit the mid-point of our [sales] expectation.

首先，正如 Carlo 在介紹中提到的那樣，第四季度庫存增加了 5000 萬，這是市場形勢不允許公司達到我們 [銷售] 預期中點的因素。

You may have noted the [map] at the end that this expectation sales occurred $80m below the point of expectations, and that inventory did increase in the range of $25m, if we consider that the other half of the value increase in the inventory in the balance sheet.

您可能已經註意到最後的[地圖]，如果我們考慮到庫存價值增加的另一半，則該預期銷售額比預期點低 8000 萬美元，並且庫存確實增加了 2500 萬美元在資產負債表中。

It's only driven by the exchange rate [that] of December 31, the reporting date, has been [1.317].

僅受報告日期 12 月 31 日的匯率影響 [1.317]。

So, in Q4, the efforts of managing the manufacturing has partially resulted in mitigating the impact on inventory.

因此，在第四季度，管理製造的努力部分減輕了對庫存的影響。

In Q1, we [continued] [to both show] the objective of reducing inventory in the absolute dollar amount.

在第一季度，我們 [continue] [to both show] 以絕對美元金額減少庫存的目標。

At this stage this is what we have in our plan.

在這個階段，這就是我們的計劃。

Of course, the evolution will also depend on how going forward the backlog of the second quarter will build up and what will be also the [dice] and what was the requirement to support the revenues for the second quarter of the year.

當然，演變也將取決於第二季度的積壓工作將如何積累，[骰子] 以及支持今年第二季度收入的要求是什麼。

Okay.

好的。

Thank you.

謝謝。

Secondly, just a follow-up, you've talked about CapEx to sales of 12% which was your goal for this year.

其次，只是跟進，你談到了 12% 的資本支出，這是你今年的目標。

Does this CapEx to sales goal include your goals for the NOR Flash business?

這個 CapEx to sales 目標是否包括您的 NOR Flash 業務目標？

That is, if there was to be a strategic action to do with NOR, would this goal of 12% CapEx to sales change?

也就是說，如果要對 NOR 採取戰略行動，那麼 12% 的資本支出佔銷售額的目標會改變嗎？

Yes, the budget that we are providing today includes Flash.

是的，我們今天提供的預算包括 Flash。

Okay.

好的。

Thank you.

謝謝。

Of course, it may change.

當然，它可能會改變。

This I do not know.

這我不知道。

With the separation of change -- with the separation of Flash, of course, we expect one of the targets is to make sure that the Company will become less capital intensive.

隨著變革的分離——當然，隨著 Flash 的分離，我們預計目標之一是確保公司的資本密集度降低。

But the budget that we have approved is including the Flash Memory business.

但我們批准的預算包括閃存業務。

Do you -- whatever action you take on the Flash business, do you expect to continue to be spending CapEx dollars on the Flash business going forward after this action is taken, or that would form the end of -- deconsolidation would mean that is your final investment in that business?

你 - 無論你對閃存業務採取什麼行動，你是否希望在採取此行動後繼續在閃存業務上花費資本支出美元，或者這將結束 - 拆分將意味著那是你的該企業的最終投資？

This means that will be the final investment in this business.

這意味著這將是這項業務的最終投資。

The objective is, of course, to see this Company run independently.

當然，目標是讓這家公司獨立運營。

And with the separation we will not, from an operational point of view, be involved any longer and we do not expect to provide further investment in this business.

從運營的角度來看，隨著分離，我們將不再參與其中，我們不希望對該業務提供進一步的投資。

Thank you very much.

非常感謝。

Thank you.

謝謝。

Next question please, Vicky.

請下一個問題，Vicky。

Next question from Mr. Titus Menzies, Jefferies.

Jefferies 的 Titus Menzies 先生的下一個問題。

Please go ahead, sir.

請繼續，先生。

Good afternoon gentlemen.

先生們下午好。

Thank you for taking my questions.

謝謝你回答我的問題。

Just to clarify one question from a previous question, inventories by the end of Q1, are you expecting to be back down by 16m as a Group -- by $16m in absolute value coming out of Q4, and you expect to reducing the Fab loading to bring it back down by 16m by the end of the first quarter '07?

只是為了澄清上一個問題中的一個問題，即到第一季度末的庫存，您是否預計整個集團將減少 1600 萬美元 - 第四季度的絕對價值減少 1600 萬美元，並且您希望減少晶圓廠負荷到 07 年第一季度末將其降低 1600 萬？

Titus, your question -- Carlo Ferro answered the question about inventories in Q1 by not giving a specific number but indicated that this was an effort [at the control of] the Company, and -- but it's, of course, dependent on the building of the backlog and other factors.

Titus，你的問題——Carlo Ferro 回答了關於第一季度庫存的問題，沒有給出具體數字，但表示這是公司 [控制] 的努力，而且——當然，這取決於建築積壓和其他因素。

There was no specific number.

沒有具體數字。

The mention of the $80m and the $25m, that was a mathematical analysis which was used to describe what occurred in Q4 and what the net effects were, the currency activity as well as the real impact of the Company's revenue level coming in below the mid-point.

提到 8000 萬美元和 2500 萬美元，這是一個數學分析，用於描述第四季度發生的事情以及淨影響是什麼，貨幣活動以及公司收入水平低於預期的實際影響中點。

Obviously, we were able to mitigate but not completely offset through fab closures.

顯然，我們能夠通過關閉晶圓廠來減輕但不能完全抵消。

But the comment Carlo Ferro made was not a specific number and not a specific magnitude with respect to Q1 inventory levels.

但 Carlo Ferro 發表的評論不是具體數字，也不是關於第一季度庫存水平的具體幅度。

Sorry to jump in on there.

很抱歉跳到那裡。

Thank you.

謝謝。

The first question I have is, then, in regards to the license for the nomadic to Samsung, for DDB phones, is that a domestic license only for Korea or does Samsung have the option to translate that license to the non-domestic market going forward?

我的第一個問題是，關於三星手機的游牧許可，對於 DDB 手機，國內許可只適用於韓國，還是三星可以選擇將該許可轉化為未來的非國內市場？

Is it a flexible contract or is it just a closed contract only for the Korean market?

它是靈活的合同還是僅適用於韓國市場的封閉合同？

This is Tommi Uhari.

這是托米烏哈里。

We don't have a limitation on Samsung on the market that they can sell the product in.

我們在市場上對三星沒有限制，他們可以在其中銷售產品。

Okay.

好的。

So it's open beyond just the domestic market?

所以它不僅在國內市場開放？

Of course.

當然。

Perfect.

完美的。

And the second question I have is regarding the STi7200 for the set-top boxes, could you give us an idea of the mix between the number of customers who are sampling that product right now and maybe a breakup between how many of them are U.S., how many of them are Japanese?

我的第二個問題是關於用於機頂盒的 STi7200，您能否告訴我們目前正在試用該產品的客戶數量與美國客戶數量之間的差異，其中有多少是日本人？

This is a very specific question.

這是一個非常具體的問題。

The product number is what?

產品編號是什麼？

The STi7200.

STi7200。

Yes.

是的。

The 7200, of course.

當然是 7200。

This is a 65 nanometer platform.

這是一個 65 納米平台。

This is for dual set-top box TV applications.

這適用於雙機頂盒電視應用。

This is for the digital and high definition TV applications.

這適用於數字和高清電視應用。

And this is also for Blu-ray.

這也適用於藍光。

So I think that the measure, the effort -- because we have this product now.

所以我認為措施，努力 - 因為我們現在有這個產品。

The product is out.

產品出來了。

Of course, it's at the sampling level on 65 nanometer.

當然是65納米上的採樣級別。

The major effort that we are doing with this product is really in the United States and in Japan.

我們在這個產品上所做的主要努力實際上是在美國和日本。

And I would not, of course, comment on customer names.

當然，我不會對客戶名稱發表評論。

But it is clear that the focus is there.

但很明顯，重點在那裡。

This is a major effort.

這是一項重大努力。

And at the same time there is a proliferation, there is a [pervasion] of our 7100 families in the various forms from the 7100, to 7 -- the 7109.

與此同時，從 7100 到 7——7109 的各種形式，我們的 7100 個家庭也在擴散，[滲透]。

So there is a proliferation.

所以有擴散。

We believe that we are making big, big progress in the United States on the -- with this 90 nanometer family.

我們相信，我們在美國取得了巨大的進步——有了這個 90 納米系列。

And the focus -- for the time being, the focus on the 7200 is, again, the United States and Japan.

重點——目前，7200 的重點再次是美國和日本。

Okay.

好的。

So the focus is Japan and United States.

所以重點是日本和美國。

And the number of customers, it's more than -- is it more like one and two or more like maybe half a dozen customers?

以及客戶的數量，它是否超過 - 是更像是一個和兩個還是更多，可能是六個客戶？

Well, I have to confess that I do not know exactly the number of customers.

好吧，我不得不承認我不知道顧客的確切數量。

However, this is a kind of business that it is very fragmented.

然而，這是一種非常分散的業務。

So I am sure that the focus of [Christo Lacomikos] and, of course, also the focus of the Group organizations -- the two regional organizations is on a wide base of customers because this is [in principle] a characteristic of this business.

因此，我確信 [Christo Lacomikos] 的重點，當然還有集團組織的重點——這兩個區域組織的重點是廣泛的客戶群，因為這是 [原則上] 該業務的一個特點。

It's not one customer -- product for one customer.

這不是一個客戶——一個客戶的產品。

This is a [cluster], like we have done with the 7100, we want to reach a very wide range of customers.

這是一個[集群]，就像我們對 7100 所做的那樣，我們希望覆蓋範圍非常廣泛的客戶。

Okay.

好的。

And the 7200 is a 65 nanometer process.

而7200是65納米工藝。

Is that correct?

那是對的嗎？

The 65 is a full -- the 65 is a full 65 nanometer process.

65 是完整的——65 是完整的 65 納米工藝。

Absolutely.

絕對地。

Carlo, thank you very much for taking my call.

卡洛，非常感謝你接聽我的電話。

Thank you everyone.

謝謝大家。

Next question, Vicky, please.

下一個問題，請 Vicky。

The next question is from Mr. Simon Schafer, Goldman Sachs.

下一個問題來自高盛的Simon Schafer 先生。

Please go ahead, sir.

請繼續，先生。

Hello Simon.

你好，西蒙。

Please go ahead.

請繼續。

Thanks, good afternoon.

謝謝，下午好。

I just noticed one of your slides in the presentation shows the revenue to strategic customers seems to have only grown in single-digit terms in 2006.

我剛剛注意到您在演示文稿中的一張幻燈片顯示，戰略客戶的收入在 2006 年似乎僅以個位數增長。

I was wondering whether you could share with us which -- by end-market segment, which application under-grew or out-grew that average that you're showing on that slide there.

我想知道您是否可以與我們分享哪些 - 按終端市場細分，哪些應用程序增長不足或超過您在該幻燈片上顯示的平均水平。

Well, I think that -- it's Carlo Bozotti here.

好吧，我認為 - 這裡是 Carlo Bozotti。

I think that first of all, as you know, these customers, many of these customers have been very close to ST for several years now.

我認為首先，正如你所知，這些客戶，其中許多客戶多年來一直與 ST 非常接近。

And some of these customers have been more successful.

其中一些客戶取得了更大的成功。

However, there have been other customers which have been less successful.

然而，還有其他客戶不太成功。

But, for us, what was important 18 months ago or so was the understanding that, globally, there is a degree of plateau and the understanding that the revenues growth opportunities at this traditional base of strategic partners was somehow limited.

但是，對我們來說，大約 18 個月前重要的是了解，在全球範圍內，存在一定程度的高原，並且了解這一傳統戰略合作夥伴基地的收入增長機會在某種程度上是有限的。

For this reason, we have identified 12 new major accounts.

為此，我們確定了 12 個新的主要客戶。

And altogether these 12 new [major] accounts have a total available market in excess of $40b.

這 12 個新的 [主要] 賬戶總共擁有超過 $40b 的總可用市場。

That is a very important target in our marketing initiative.

這是我們營銷計劃中非常重要的目標。

And last year we grew these 12 accounts 48%.

去年我們將這 12 個賬戶增長了 48%。

And I think you can see that our revenues have largely exceeded the $1b mark at these 12 new accounts.

我想你可以看到我們的收入在這 12 個新客戶中大大超過了 10 億美元大關。

So, [against] to this contribution now, this new range of top customers that is about 20 customers, have grown more or less at the same pace as the Company, slightly higher at the 12% growth.

因此，[反對] 現在，這一新的頂級客戶範圍大約有 20 個客戶，其增長速度與公司大致相同，略高於 12% 的增長率。

Now, to come back to your question, well, of course, some customers -- well, we know, take Alcatel, they have sold many years ago their cellular phone activity.

現在，回到你的問題，嗯，當然，一些客戶——嗯，我們知道，以阿爾卡特為例，他們在很多年前就出售了他們的手機活動。

At [Foxon], they have sold their TV activities.

在[Foxon]，他們已經出售了他們的電視活動。

These things go on.

這些事情還在繼續。

So they are in [debt] provisionally customers that have grown at a higher pace and something that has growth at a lower pace.

因此，他們處於 [債務] 臨時客戶中，這些客戶的增長速度更快，而增長速度較慢。

What I would say it's more customer-dependent rather than segment-dependent or rather than a steep performance dependent.

我想說的是，它更多地依賴於客戶而不是依賴於細分市場，或者更依賴於性能。

I think it's more the evolution of the customer itself.

我認為這更多是客戶本身的演變。

But I think it's important to notice that with this addition of 12 new major accounts and, of course, this will become also major partners for us, or some of them, we have reversed the trend.

但我認為重要的是要注意，通過增加 12 個新的主要客戶，當然，這也將成為我們或其中一些的主要合作夥伴，我們已經扭轉了這一趨勢。

And now, overall, this block has started to grow again and last year, globally, it was 12%.

現在，總體而言，這個區塊已經開始再次增長，去年在全球範圍內增長了 12%。

So last year this new block who grew 12%.

所以去年這個新區塊增長了 12%。

In the mass market we grew 17%, which is all the customers outside the top 50 list.

在大眾市場，我們增長了 17%，這是前 50 名名單之外的所有客戶。

And then from a geographical point of view there was a major growth in Japan and a very significant growth in China.

然後從地域的角度來看，日本出現了重大增長，中國也出現了非常顯著的增長。

In China we grew 16%.

在中國，我們增長了 16%。

And in Japan we grew 31%.

在日本，我們增長了 31%。

And I am very pleased to report the progresses that we are doing in Japan in our new marketing initiative.

我很高興地報告我們在日本的新營銷計劃取得的進展。

It is not just one further client.

它不僅僅是一個額外的客戶。

It is not just one [month] segment.

它不僅僅是一個 [月] 段。

It is very wide.

它很寬。

And I think we will make good progress there in the coming months and years.

我認為我們將在未來幾個月和幾年內取得良好進展。

Understood.

明白了。

Thank you.

謝謝。

And then, given that you've given us some numbers for the reorganized Flash Memory group, can you share with us what percentage of your 2006 CapEx and depreciation was in that product?

然後，鑑於您已經為我們提供了重組後的閃存組的一些數字，您能否與我們分享您 2006 年的資本支出和折舊在該產品中所佔的百分比？

Well, depreciation -- depreciation, of course, we're not doing very well.

嗯，折舊——折舊，當然，我們做得不是很好。

And CapEx we also not doing very well.

我們的資本支出也做得不太好。

But, of course, you understand that these numbers are very confidential.

但是，當然，您了解這些數字是非常機密的。

And I think we will start reporting at the end of Q1.

我認為我們將在第一季度末開始報告。

And we have -- frankly, we have not even decided yet fully in ST what will be the degree of the reporting.

而且我們 - 坦率地說，我們甚至還沒有在 ST 中完全決定報告的程度。

For sure, as in the past, we will report the top line and we will report the bottom line in this business.

當然，與過去一樣，我們將報告該業務的頂線，我們將報告該業務的底線。

But you can imagine if it's a Flash business, it is clearly [deleting] our gross margin, it's more capital intensive.

但你可以想像，如果它是 Flash 業務，它顯然會 [刪除] 我們的毛利率，它的資本密集度更高。

But, unfortunately, we cannot provide these figures.

但是，不幸的是，我們無法提供這些數字。

Understood.

明白了。

And just a very brief follow-up question on something you said in Paris this morning, I think you described the mix obviously in Wireless as somewhat slightly more to the low end.

只是關於你今天早上在巴黎所說的話的一個非常簡短的後續問題，我認為你在 Wireless 中描述的混音顯然稍微偏向低端。

As we go into Q1, did you also say that you expect it to be -- that you expect the seasonality to be more or less normal as we go into the new year?

當我們進入第一季度時，您是否也說過您希望它 - 您希望隨著我們進入新的一年，季節性或多或少是正常的？

I think the seasonality for us is normal, except [Wireless].

我認為我們的季節性是正常的，除了[無線]。

I think I have to say that the mix issue is -- of course, it's from our angle because, at the end of the day, it's revenues [for us].

我想我不得不說混合問題是——當然，這是從我們的角度來看的，因為歸根結底，這是 [對我們來說] 的收入。

The mix issue is the turning decline in Wireless that is significant.

混合問題是無線業務的明顯下滑。

Now the question is how is the volume [at several point] in Q1, I think that maybe what is the expectation from the volume point of view.

現在的問題是第一季度的[在幾個點]數量如何，我認為從數量的角度來看，預期可能是什麼。

Tommi can respond better than me.

Tommi 的反應比我好。

But the impact on ST is more than the normal seasonal [negative] seasonal adjustment that we have in Q1.

但對 ST 的影響超過我們在第一季度進行的正常季節性 [負] 季節性調整。

But Tommi, can you comment?

但是 Tommi，你能評論一下嗎？

Well, rather than commenting on the volume, I'd comment on our product [gap].

好吧，與其評論數量，不如評論我們的產品[差距]。

Because in our product portfolio mix, which will be in the different Wireless businesses that we are in, it will be much stronger towards the second half of -- the second half of the year.

因為在我們的產品組合中，我們將在不同的無線業務中，它會在下半年 - 下半年更加強大。

So, let's say, in addition to a low-end mix, we are also seeing low-end mixes in Q4 and Q1.

所以，比方說，除了低端混合，我們還在第四季度和第一季度看到了低端混合。

We are also seeing an improvement in our imaging product portfolio towards the latter part of the year which will improve our performance.

我們還看到我們的成像產品組合在今年下半年有所改善，這將提高我們的業績。

Okay.

好的。

Thanks very much.

非常感謝。

Thank you, Simon.

謝謝你，西蒙。

Vicky, the next question please.

Vicky，請問下一個問題。

The next question is from Mr. Cody Acree, Stifel Nicolaus.

下一個問題來自 Stifel Nicolaus 的 Cody Acree 先生。

Please go ahead sir.

先生，請繼續。

Thank you.

謝謝。

Carlo, could you give any more clarity on your gross margin thoughts progressing off this first-quarter low throughout the year?

Carlo，您能否更清楚地說明您對全年從第一季度低點開始的毛利率想法？

Yes, on the first quarter, I think that -- through the year, okay.

是的，在第一季度，我認為 - 全年，好吧。

Yes, through the year.

是的，過年了。

Well, I think that, first of all, if we talk on Q1, the major issue that we have is [the block].

好吧，我認為，首先，如果我們談論 Q1，我們面臨的主要問題是 [區塊]。

I think that this is, of course, related also to the manufacturing cost that we have, let's say, upshot in Q4 than is product that we sell in Q1.

我認為這當然也與我們在第四季度的製造成本比我們在第一季度銷售的產品的製造成本有關。

And this is affected by the loading of the fact that is definitely suboptimal.

這受到加載絕對次優的事實的影響。

So I think that in our manufacturing machines we did progress properly.

所以我認為我們的製造機器確實取得了適當的進步。

And then there was the significant glitch in Q4.

然後在第四季度出現了重大故障。

But it's really related to the volume loading.

但這確實與卷加載有關。

Moving on in the course of the year I think that we are taking, from one side, actions that are on the continuous improvement process.

在這一年中，我認為我們正在採取持續改進過程中的行動。

I think that there will be a strong focus this year on our 8-inch fabs.

我認為今年將重點關注我們的 8 英寸晶圓廠。

And this year we will fully enjoy the improvement that is related with the 6-inch restructuring.

今年我們將充分享受與6英寸重組相關的改進。

So in manufacturing there will be this very strong focus on 8 inch.

因此在製造業中，將非常關注 8 英寸。

Again, in terms of continuous improvement process, it is the wave of new products that we have described in many, many segments and there will be an acceleration quarter after quarter of this.

同樣，就持續改進過程而言，這是我們在很多很多細分市場中描述的新產品浪潮，而且每個季度都會加速。

But, in addition to this, continuous improvement in terms of manufacturing cost reduction and new product introduction, there are two significant discontinuation that we believe are very, very important in ST.

但是，除此之外，在降低製造成本和推出新產品方面的持續改進，還有兩個我們認為在 ST 中非常非常重要的重大停產。

The first discontinuation is -- or discontinuity.

第一次中斷是——或中斷。

My colleagues are telling me that the right word in English is discontinuity.

我的同事告訴我，英語中正確的詞是不連續性。

So there are two important positive discontinuity in our approach, on top of the continuous improvement.

因此，除了持續改進之外，我們的方法還有兩個重要的積極的不連續性。

The first one is the separation of the Flash business.

第一個是Flash業務的分離。

And this one, of course, is significant in terms of gross margin improvement because of the [dilution] effort of the Flash Memory on the total ST.

當然，由於閃存對整個 ST 的 [稀釋] 努力，這一點在毛利率提高方面意義重大。

And the second is the capital investment strategy.

其次是資本投資策略。

I think that we are moving from more than 20% CapEx to sales ratio to, let's say below 12%, 12%.

我認為我們正在從超過 20% 的資本支出到銷售比率，比如說低於 12%，12%。

And this has two effects.

這有兩個影響。

This is, on one side, mitigating and improving the evolution of the depreciation.

一方面，這減輕和改善了貶值的演變。

That has been one of the key challenges that we have to address.

這是我們必須應對的主要挑戰之一。

On the other side is we provide -- we increase foundry services.

另一方面是我們提供 - 我們增加代工服務。

That's flexibility that, for instance, we did not have in Q4.

例如，這是我們在第四季度所沒有的靈活性。

So in Q4 we had -- to operate with a suboptimal loading of our fabs, because the flexibility with our silicone foundry was not at the level that we had -- that would have been requested to fully compensate both a drop in the demand and for the drop -- and for the reduction in the sales.

因此，在第四季度，我們不得不——以次優的晶圓廠負荷運營，因為我們的矽樹脂鑄造廠的靈活性沒有達到我們所擁有的水平——這將被要求完全補償需求下降和下降 - 以及銷售額的減少。

So I think that I want to underline the fact that 2007 is going to be a good year where this discontinuity will be visible.

所以我想我想強調一個事實，即 2007 年將是一個好年頭，這種不連續性將是顯而易見的。

And I believe that -- I am sure we will progress with our products.

我相信——我相信我們的產品會取得進步。

I think there is more [profit] and there is a wave of new products.

我認為有更多[利潤]並且有一波新產品。

I'm sure that we will repeat in the 8-inch manufacturing what we have done in the 6 inch, with a very strong improvement in manufacturing cost.

我敢肯定，我們將在 8 英寸製造中重複我們在 6 英寸中所做的事情，製造成本將有很大的改善。

But, on top of this continuous improvement from activities, I think it's important to underline the discontinuity and this is major steps in our Company.

但是，除了活動的持續改進之外，我認為強調不連續性很重要，這是我們公司的主要步驟。

Thank you, very helpful.

謝謝，很有幫助。

And then maybe to follow up, with a little more of a strategic question.

然後可能會跟進，提出更多的戰略問題。

Your outlook and your in-market expectations sound very similar to what we have just heard out of Texas Instruments, yet both of you are taking a very different approach strategically to how you're handling internal inventories.

你們的前景和市場預期聽起來與我們剛剛從德州儀器公司聽到的非常相似，但你們都在戰略上採取了截然不同的方法來處理內部庫存。

Do you see any possibility of a risk if we get demand recovery in the second quarter, of you then having a shortness of supply?

如果我們在第二季度實現需求復蘇，您是否認為存在供應短缺的風險？

Well, I have to say that today we are [leading among] -- the correction was significant in Q4, let's face it.

好吧，我不得不說，今天我們 [leading among] -- 第四季度的修正很重要，讓我們面對現實吧。

In September we had in mind $2.6b in Q4.

9 月，我們在第 4 季度想到了 $2.6b。

And when we met in the beginning or the middle of October, we had in mind the mid-point for the guidance and, compared to the mid-point of the guidance, we missed by $80m.

當我們在 10 月初或中旬開會時，我們想到了指導的中點，與指導的中點相比，我們錯過了 8000 萬美元。

I believe that all of this is mostly on Wireless.

我相信所有這一切主要是在無線上。

I think on Wireless we are, on one side, also protected by the -- all these long-term visibilities that our customers are providing.

我認為在 Wireless 方面，一方面，我們也受到客戶提供的所有這些長期可見性的保護。

And we operate with them some flexibility.

我們與他們合作有一定的靈活性。

So we think the inventories that we have and with the flexibility that we provide, if there will be a resurgence of the market, we will be able to follow very, very quickly.

因此，我們認為我們擁有的庫存和我們提供的靈活性，如果市場復甦，我們將能夠非常非常迅速地跟進。

But the priority today is to make sure that we do not -- that we resolve the inventory problem.

但今天的首要任務是確保我們不解決庫存問題。

We want to resolve the inventory problem.

我們想解決庫存問題。

I think that Q1 was -- Q4 was tough.

我認為 Q1 是——Q4 很艱難。

But we must address this and resolve this.

但我們必須解決這個問題並解決這個問題。

And then with the inventory level that we have, it's very good products.

然後根據我們的庫存水平，這是非常好的產品。

And with the flexibility of process that we have with our customers in case of a resurgence of the demand, we can react very, very quickly.

在需求復甦的情況下，我們與客戶的流程具有靈活性，我們可以非常非常迅速地做出反應。

In many other products this was business as usual.

在許多其他產品中，這一切照常。

We do not comment today much about IMS.

我們今天對 IMS 的評論不多。

Last year was $2.8b in the Group.

去年該集團的收入為 $2.8b。

So a significant portion of ST this year there will be another major growth in IMS after the growth in 2006.

所以今年很大一部分ST在IMS上會有繼2006年增長之後的又一次大增長。

And here the business is more normal.

而這裡的生意更正常。

It's more a normal adjustment in Q1 and I think it's a more normal inventory situation internally in ST.

這更多是Q1的正常調整，我認為這是ST內部更正常的庫存情況。

But also with our distributors, for instance, it's not too bad what we see in terms of point of sales and what we see in sense of distributors' inventory evolution.

但對於我們的分銷商，例如，我們在銷售點和分銷商庫存演變方面所看到的情況並不算太糟糕。

So I think that, to go back to your question, we believe that the major customers who are evolving [with us] will react very quickly if needed.

所以我認為，回到你的問題，我們相信[與我們]一起發展的主要客戶會在需要時做出非常迅速的反應。

And on the other portion of the business that is IMS, I think it's more business as usual.

在 IMS 業務的另一部分，我認為它更像往常一樣。

There is some direction that is very mild and moderate.

有一些方向非常溫和和溫和。

That's very good, thanks.

那很好，謝謝。

Thank you.

謝謝。

Next question please, Vicky.

請下一個問題，Vicky。

Hello, Vicky?

餵，薇姬？

The next question is from Mr. Mark Lipacis, Prudential.

下一個問題來自 Prudential 的 Mark Lipacis 先生。

Please go ahead sir.

先生，請繼續。

Great.

偉大的。

Thank you for taking my question.

謝謝你提出我的問題。

You may have covered this but, hopefully, you can give me clarification.

您可能已經涵蓋了這一點，但希望您能給我澄清一下。

You mentioned the CapEx intensity has come down markedly over the past years and it's certainly impressive and beneficial to the cash flow.

你提到過去幾年資本支出強度顯著下降，這肯定令人印象深刻並且對現金流有利。

As you look into the next couple of years, is there a risk that you have to reverse the downward trend to increase your capital intensity over the -- some time over the next couple of years?

當你展望未來幾年時，是否存在你必須扭轉下降趨勢以增加你的資本密集度的風險 - 在未來幾年的某個時間？

I'm just trying to understand how long will CapEx stay below the depreciation expense.

我只是想了解資本支出將在多長時間內保持在折舊費用以下。

And, as part of that, would you also be so kind as to review your CapEx expectations for Krol 2 and your outsourcing strategy?

而且，作為其中的一部分，您是否也願意回顧一下您對 Krol 2 的資本支出預期和您的外包策略？

What percentage is outsourced now to foundries and over the next couple of years?

現在和未來幾年外包給代工廠的百分比是多少？

Thank you.

謝謝。

Yes, this is [Allain Dutheil] here.

是的，我是 [Allain Dutheil]。

About CapEx, there are a few things which are changing here which make us very confident to keep this CapEx to sales ratio at the 12% or near the 12%.

關於資本支出，這裡有一些變化使我們非常有信心將資本支出與銷售額的比率保持在 12% 或接近 12%。

Number one, as you know, the market holds now even more in the area of 12 to 15%, as you [see] in the past.

第一，正如你所知，市場現在在 12% 到 15% 的範圍內持有更多，正如你過去 [看到] 的那樣。

Today, it's more [maverick].

今天，它更[特立獨行]。

Number two, our sales [marketing] action.

第二，我們的銷售[營銷]行動。

One of the action is to separate the Flash Memory which are more capital intensive than the average of our business.

其中一項行動是分離比我們業務平均資本密集度更高的閃存。

So this is also something which is going to affect our CapEx to sales down.

因此，這也會影響我們的資本支出以降低銷售額。

And, number three, we will go [needing] more foundries.

第三，我們將[需要]更多的鑄造廠。

Just to remind you today, our foundry, the rate of our foundry in our production is above 10%.

今天提醒大家一下，我們的代工廠，我們代工廠的生產率在10%以上。

And as a first step we can move to 15 and then increase.

作為第一步，我們可以移動到 15，然後再增加。

So, frankly, with all this, the market itself, the Flash cut out, the less capital intensity that we will need more foundries, as well as a better usage of our CapEx than in the past, it should allow us to stay at about the 12% CapEx to sales.

所以，坦率地說，有了這一切，市場本身，Flash 被淘汰，我們需要更多代工廠的資本密集度越低，以及我們的資本支出比過去更好地使用，它應該讓我們保持在大約12% 的資本支出佔銷售額。

About Krol, we are not disclosing any CapEx number in Krol.

關於 Krol，我們不會披露 Krol 的任何資本支出數字。

But the only thing I can tell you is that this year we are not going to spend $1 on increasing our capacity.

但我唯一可以告訴你的是，今年我們不會花 1 美元來增加我們的產能。

The money we spend there will be mainly for R&D and will be moderate.

我們在那里花的錢將主要用於研發，而且是適度的。

And your third question was --

你的第三個問題是——

I think you got most -- I think you got them all.

我想你得到了最多——我想你得到了所有。

The follow up would be the 15% target for foundry, would that be a goal for the end of this year, for the end of 2008?

後續將是代工 15% 的目標，這是今年年底、2008 年底的目標嗎？

How should we think about that then?

那我們應該怎麼考慮呢？

15% is a goal that we have.

15% 是我們的目標。

I don't think for the first half this will be possible because one of our challenges today, as it was mentioned before, is really to [inaudible].

我不認為上半年這將是可能的，因為我們今天的挑戰之一，正如之前提到的，真的是 [聽不清]。

So, therefore, we are not going to increase the weight of the family.

因此，因此，我們不會增加家庭的重量。

But this will go probably similarly it will probably will reach [inaudible] 2008.

但這可能會以類似的方式進行，它可能會達到 [聽不清] 2008 年。

I think that the objective we have is to make sure that, of course, it is not a new objective.

我認為我們的目標當然是確保這不是一個新目標。

It's something we started with a CapEx to sales ratio of more than 20.

這是我們以超過 20 的資本支出與銷售比率開始的事情。

We went down to 15.

我們下降到 15。

Now it's 12.

現在是12點。

What is the objective?

目標是什麼？

Of course, the objective is, on one side, the financials to run at the level of depreciation that is more bearable.

當然，一方面，目標是讓財務在更能承受的貶值水平上運行。

On the other side, it is to make sure that there is a degree of flexibility that we need to prevent any, poor loading conditions in our facilities.

另一方面，這是為了確保我們需要一定程度的靈活性，以防止我們的設施出現任何不良的裝載條件。

If we take Q4.

如果我們採取 Q4。

If we would get -- if we would have had more outside, in terms of silicone foundry, it would have been possible to put [more] with our facilities during the course of Q4.

如果我們能得到 - 如果我們有更多的外部，就矽膠鑄造廠而言，就有可能在第四季度期間將 [更多] 放在我們的設施中。

And this is a lot of money.

這是很多錢。

This is -- I had in mind, and Carlo will correct me if I'm wrong, I had in mind that this year, a pick up of $30m.

這是——我想到了，如果我錯了，Carlo 會糾正我，我想到的是今年，獲得 3000 萬美元。

So this is significant.

所以這很重要。

So why's that?

那是為什麼呢？

Because we did not have enough flexibility outside to absorb the market correction.

因為我們沒有足夠的靈活性來吸收市場調整。

And we are building up in the course of this quarter the flexibility.

我們正在本季度建立靈活性。

So this is what we want to do.

所以這就是我們想要做的。

And there is a CapEx strategy.

還有一個資本支出戰略。

And there is financial implications, but there is also a strategy that is to make sure that there is more flexibility to outsourcing and so guaranteeing a continuation of optimal loading conditions -- optimal loading conditions in all our fabs.

並且有財務影響，但還有一項戰略是確保外包具有更大的靈活性，從而保證最佳裝載條件的持續 - 我們所有晶圓廠的最佳裝載條件。

Very helpful.

很有幫助。

Thank you very much.

非常感謝。

Thank you.

謝謝。

Okay, Vicky, we have time for two more questions so could you give us the first of those two please?

好的，Vicky，我們有時間再問兩個問題，你能給我們第一個嗎？

The next question from Mr. Manish Goyal, TIAA-CREF.

下一個問題來自 TIAA-CREF 的 Manish Goyal 先生。

Please go ahead sir.

先生，請繼續。

Yes, hi.

是的，嗨。

Thank you.

謝謝。

The question is on nomadic.

問題是關於游牧。

Do you -- are your customers working on Symbian or Linux operating system on that platform or are they working on both of them?

您 - 您的客戶是在該平台上使用 Symbian 還是 Linux 操作系統，還是同時使用這兩種操作系統？

The question will be taken by Tommi, of course.

當然，這個問題將由 Tommi 提出。

Yes.

是的。

So, for the products that are currently on the market, it is apparent that [what are] the operating systems in those and there is a variety of the Symbian series 6 Gen and even [Natos]. [Natos] device there.

所以，對於目前市場上的產品，很明顯那些[是什麼]操作系統，有各種Symbian系列6 Gen甚至[Natos]。 [Natos] 裝置在那裡。

On the ones that are in the development, I'll just say that a variety of the high-end operating systems are under development.

關於正在開發的那些，我就說各種高端操作系統正在開發中。

And ST is taking no stand on which way to go and we are happy to support our customers in whatever is their choice.

ST 對走哪條路沒有任何立場，我們很樂意支持客戶的任何選擇。

So, specifically to Nokia, do you know if you will be designed in only Symbian operating system or will you also have a design in the Linux-based ones?

那麼，具體到諾基亞，你知道你是只在 Symbian 操作系統中設計，還是在基於 Linux 的操作系統中也有設計？

Well, I am afraid that we cannot comment on that.

好吧，恐怕我們不能對此發表評論。

It's very specific to customers -- one customer.

它非常針對客戶——一個客戶。

And, of course, we cannot comment on this.

當然，我們不能對此發表評論。

Okay.

好的。

Thank you so much.

太感謝了。

Thank you.

謝謝。

Thank you.

謝謝。

Vicky, could we take the last question now please?

Vicky，我們現在可以回答最後一個問題嗎？

The last question is from Mr. Tristan Gerra, Robert Baird.

最後一個問題來自 Mr. Tristan Gerra, Robert Baird。

Please go ahead sir.

先生，請繼續。

Hi.

你好。

In Wireless, in 3G, if you could talk a little bit about the dynamics impacting the trends.

在無線領域，在 3G 領域，如果你能談談影響趨勢的動力。

Do you view this as just short term or is there a more fundamental structure problem that could last beyond the first half of this year?

您認為這只是短期的，還是存在可能會持續到今年上半年之後的更根本的結構性問題？

Yes.

是的。

Well, I think this is the last question concerning Wireless, and Tommi will take the question.

好吧，我認為這是關於無線的最後一個問題，Tommi 將回答這個問題。

So, I think that what we've seen -- what we've seen in 2006 has been a stronger than expected demand in the low end which is, I think, a higher market growth than was originally forecasted. 3G growth continues strong for this year.

所以，我認為我們所看到的——我們在 2006 年看到的是低端需求強於預期，我認為市場增長高於最初的預測。今年 3G 增長繼續強勁。

I think that with the product mix that we have to address that market.

我認為我們必須通過產品組合來解決這個市場。

Let's say, the current 3G outlook for this year looks positive for us.

比方說，今年目前的 3G 前景對我們來說是樂觀的。

Okay.

好的。

And then just a quick follow up, how much visibility do you have into Q2 at this point?

然後快速跟進，此時您對第二季度的了解程度如何？

If you can talk about your backlog and how that compares versus Q4 and also the book-to-bill Q4.

如果你能談談你的積壓工作，以及與第四季度和第四季度的訂單到賬單相比如何。

Well, I will take this question on visibility.

好吧，我將就可見性提出這個問題。

Of course, that is part of the guidance.

當然，這是指導的一部分。

We would say that visibility is worse than what we had than, for instance, in Q3 last year.

我們會說能見度比去年第三季度更糟糕。

And I think that we have provided a guidance that this time was, in fact, it is 8 percentage points because we have a fuller visibility compared to what we had -- to what we had in the past.

而且我認為我們提供的指導實際上是這次是 8 個百分點，因為與過去相比，我們有更全面的可見性。

But, on the other hand, I think that in our business, in the Semiconductor business, the [term] business generation is not unusual.

但是，另一方面，我認為在我們的業務中，在半導體業務中，[術語] 業務生成並不罕見。

So I think all companies are working to generate term business.

所以我認為所有公司都在努力創造術語業務。

And, of course, this is something that is normal in a period where there is inventory correction.

當然，這在存在庫存修正的時期是正常的。

And this is particularly important for us in the memory area and is particularly important for us in the area of our IMS products.

這對我們在內存領域尤其重要，對我們在 IMS 產品領域尤其重要。

So I think that, indeed, the visibility is worse than what we had last year.

所以我認為，確實，能見度比去年差。

We have tried to make sure that our guidance takes care about this worse visibility.

我們已努力確保我們的指南能夠解決這種更差的能見度。

On the other hand, the opportunity in all our regions and with many of our product groups is on term business.

另一方面，我們所有地區和我們許多產品組的機會都是定期業務。

And term business is a kind of element that has become a common denominator when the market is in a correction mode.

而術語業務是一種在市場處於調整模式時成為共同點的元素。

I think that there is a switch in the visibility.

我認為可見性發生了變化。

So you mentioned Q2.

所以你提到了第二季度。

I think we do not see yet a difference between Q2 and Q1.

我認為我們還沒有看到 Q2 和 Q1 之間的區別。

So we'll see later, hopefully, in the course of the first quarter.

因此，我們希望在第一季度的過程中稍後看到。

And we'll be pleased to report some better visibility for the second quarter.

我們很高興地報告第二季度的能見度會有所提高。

Great.

偉大的。

Thank you.

謝謝。

Thanks to everyone for participating.

感謝大家的參與。

I would like to make one announcement before we conclude the call.

在我們結束電話會議之前，我想宣布一個消息。

And, frankly, we thought we'd get the question.

而且，坦率地說，我們認為我們會得到這個問題。

But today in the presentation by the Chief Financial Officer in response to a question, we did make one announcement that I think is appropriate for all the participants on this call, and that is that formerly the effective tax rate guidance for the Company, for ST, was planning in the 15 to 17% range.

但今天在首席財務官回答問題的陳述中，我們確實發布了一個公告，我認為這對所有參加本次電話會議的參與者都是合適的，那就是以前對公司的有效稅率指導，對 ST , 計劃在 15% 到 17% 的範圍內。

However, given the fine work that's been done by our colleagues in the tax planning, and some very good work that's been done by the manufacturing activity and other elements of ST, we are in a position to be able to indicate that, for planning purposes and modeling purposes beginning in 2007, the appropriate tax rate for the Company, or effective tax rate for the Company, is in a range of 12 to 16%.

然而，鑑於我們的同事在稅務規劃方面所做的出色工作，以及製造活動和 ST 的其他元素所做的一些非常出色的工作，我們能夠表明，出於規劃目的出於建模目的，從 2007 年開始，公司的適當稅率或公司的有效稅率在 12% 至 16% 的範圍內。

So I just want to make sure that that one piece of information, which we thought we'd get the chance to discuss on the call but we did discuss this morning, was communicated.

所以我只想確保傳達了一條信息，我們認為我們有機會在電話中討論，但我們今天早上確實討論過。

If you'd like to hear the full comment from the CFO, certainly check the webcast of this morning's conference if you'd like to hear that.

如果您想听取首席財務官的完整評論，請務必查看今天上午會議的網絡廣播。

But it's essentially what I just communicated.

但這基本上就是我剛才傳達的內容。

Once again, we want to thank you for participating in our fourth quarter and full year results for 2006 and we look forward to communicating with you through the quarter and in next quarter's results.

我們要再次感謝您參與我們 2006 年第四季度和全年的業績，我們期待在整個季度和下一季度的業績中與您溝通。

Thank you and good day.

謝謝你，美好的一天。

Ladies and gentlemen, the conference call is now over and you may disconnect your telephones.

女士們，先生們，電話會議現在結束了，你們可以斷開你們的電話了。

Thank you very much for joining.

非常感謝您的加入。

Goodbye.

再見。