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But SG&A would then grow half of it. That way if our CAGR is 20% or 21%, our bottom line EPS should grow faster than 20%. That’s really our business model. And so we’re typically able to run about 35% GPM with operation costs about 20% R&D and SG&A. So we have flow-through of like 15%, then after tax, then we have a much better growth of the EPS. And that really is our business model.Question-and-Answer Session Unidentified Analyst Thank you for that detailed introduction. I guess to dive deeper into the discrete space, obviously it’s a competitive space and you’ve kind of seen people come and go in and out of the market over the last 10 years or so. Yet you have continued to outgrow not only the overall discrete industry but most of the customers as well. What’s been your real differentiator versus some of the other players in the space? Keh-Shew Lu If you go back to discrete, discrete is like a 50 years, 60 years history, and you don’t see not many companies continue put the technology, continue spend the money, we’re talking about discrete. Today go to look at other semiconductor, you hardly hear. Most of the semiconductors are talking about high end IC integrated circuit and millions transistor integration, you don’t see that much of people talking about discrete. But different from that is we continue put innovation to our business. And like I said, we’re using packaging to win the market share and I will show, this kind of – you’re probably not able to see it. It will be great to show you but look at how small we are. Now our smallest one is like one circle of the fingerprint. And actually if you go to look at the new smartphone, new tablets, all these kind of high end new products, they need smaller and smaller footprint. You cannot put too many of the components to build component into here. But they still need the discrete, and that’s where we can win in the market share is because our competitor is no longer putting R&D resource, they still produce the same product but we are able to put in innovation, put high tech into this area. And that’s what give us – able to participate and grow and gain market share.
Unidentified AnalystSo you mentioned the smartphone has been kind of the one of the bigger drivers of growth for you guys and you’ve got some nice content there with some of the larger phone OEMs. Can you kind of walk through what your design win momentum is like today and maybe more broadly what kind of opportunity it represents for you guys this year and going forward? Keh-Shew Lu Well, I think we already in our earnings conference call, 1Q earning conference call, we said typically seasonally 1Q should be going down 5% to 10% but because the ramp of some new application, especially smartphone, tablets and LED TV. Those are the ramping areas. The total TV may not grow but they move more to LED TV. The phone may not necessarily grow but the smartphones actually grow much faster than the other segments. Okay, and there you get the tablets, you get EPC, netbook pc, those are some areas which the new application needs small footprint of the component, give better power efficiency of the component which want to convert into the new technology, new product we have. And they have been helping us grow quite well, and this momentum is going to be continuing. And that’s why we are able to give the forecast of second quarter, we’re going to grow 10% versus 1Q. And the markets really continue doing well. Read the rest of this transcript for free on seekingalpha.com