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Hutchinson Technology, Q1 2011 Earnings Conference Call Transcript

During the quarter our Thailand site was qualified by a customer and we’re now shipping volume product from this site. Continued TSA plus improvements and the ramp to higher volume at our Thailand facility will move us steadily closer to our goal of being the industries lowest cost producer of suspension assemblies.

Our biomeasurement division has significantly reduced its operating loss. As a result of previously mentioned cost reduction. In addition, the division has initiated sales of the newly introduced InSpectra St02 spot check product in countries that recognize the CE mark. I’ll turn the call over to Kathleen now for a recap of the disk drive components division for first quarter.

Kathleen Skarvan

Thanks, Wayne. During our fiscal 2011 first quarter we shipped 16.5 million suspension assemblies, down 3.5% from 110.4 million in the first quarter and 155.2 million in last years first quarter. The sequential decline was inline with our guidance, which included one customer managing down their existing inventory. For the quarter, our mix of products shipped was as following.

Suspensions for 3.5-inch ATA applications increased 5% sequentially and accounted for 58% of our shipments up from 53% in the preceding quarter. Shipments for mobile applications declined 27% sequentially and accounted for 17% of our shipments, down from 23% in the preceding quarter.

Shipments for enterprise applications were flat with the preceding quarter and accounted for 25% of our shipments compared with 24% in the preceding quarter. Average selling price in the fiscal 2011 first quarter was $0.62 compared with $0.66 in the preceding quarter and $0.68 in last year’s first quarter.

The sequential quarter decline in ASP reflects the continuation of a competitive pricing environment and a change in the mix of our products and customers. So revenue percentages for our top customers in the quarter were as follows: Western Digital 57%, SAETDK 16%, Hitachi 13%, Seagate 12%.

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