However, we expect that as the industry revives and demand picks up, TI could leverage this additional capacity and consequently increase its factory utilization rates which, in turn, will improve the gross margins.

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Utilization rates of between 20 and 30% of total capacity are common for first-line production storage systems.

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These are hardly excessive growth rates in normal times, much less in an economy with almost 10 percent unemployment, with capacity utilization down from the 80s to the 60s, and with nonbank credit sinking, productivity growing rapidly, and with unit labor cost declining.

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