News

30 July 2010

 

TriQuint grows 14.7% in Q2 after faster-than-expected Networks rebound

For second-quarter 2010, RF front-end product and foundry services provider TriQuint Semiconductor Inc of Hillsboro, OR, USA has reported revenue of $207.5m (up 14.7% on $180.8m last quarter and 22.7% on $169.1m a year ago). Foxconn was the only customer comprising more than 10% of revenue.

Of total revenue, 61% came from Mobile Devices; 27% Networks; and 12% Defense & Aerospace (compared to 68%, 20% and 12% a year ago, continuing the shift from Mobile to Network business).

In particular, Networks product revenue continued to show a strong rebound from the lows of 2009, growing a more-than-expected 19% on last quarter and 64% on a year ago.

Within Mobile Devices (the largest of TriQuint’s three major markets) revenue was up 10% sequentially, and 31% year to date compared to first-half 2009. Consumer demand for wireless broadband is fueling rapid smart-phone growth, bringing 4–6 times the RF dollar content per smart-phone compared to a voice-only phone, says president & CEO Ralph Quinsey.

TriQuint also has wide customer penetration, he adds. “We have content with all leading smart-phone providers.” The RF section has become more complex within smart-phones, with requirements for voice, multiple databands, Wi-Fi, and GPS. “TriQuint is unique as a single supplier for this complete solution, regardless of standard, band, or technology. For example, integrating duplexers with amplifiers for improved size and battery life is an area where TriQuint has a competitive advantage,” Quinsey claims.

On a non-GAAP basis, gross margin improved for a fifth consecutive quarter from 33.2% a year ago and 39% last quarter to 42.3%, due to strong factory utilization, a greater mix of Networks and Defense products (which have higher-than-company average margins), and favorable product mix.
“TriQuint had a strong second quarter, passing the $200m a quarter revenue milestone and exceeding our non-GAAP operating income target of 15% [achieving 16%] on a healthy mix of higher-margin Networks products,” says Quinsey.

On a non-GAAP basis, net income was $33.1m, up from $17.7m last quarter and $11.5m a year ago. Cash flow from operations was $27.9m (up on $12.1m last quarter). With capital spending of $18.4m (compared with depreciation of $12m), total cash investments rose about $17m to just over $175m.

“Strong earnings results were due to a higher mix of networks, defense and aerospace revenue, improved factory performance, and lower-than-expected legal expenses [which included $1.3m related to litigation with Avago],” says Quinsey.

During Q2, TriQuint received a Quarterly Quality Award from Samsung recognizing its performance. It was also awarded a US Air Force contract to design and build gallium nitride (GaN) modules for new Drone aircraft. In addition, TriQuint is ramping bulk acoustic wave (BAW) filter products for 4G mobile hotspots.

Based on continued strong smartphone design wins and strong growth in mobile devices markets, for third-quarter 2010 TriQuint expects revenue of $215–225m, up about 6% sequentially and 25–30% year-on-year (compared to 24 February’s guidance of about 20%), with strong factory utilization leading to non-GAAP gross margin of 40–41%.

For full-year 2010, TriQuint expects revenue to grow 25–30%. “Early in 2010, I took an aggressive stance and guided for 20% year-over-year growth on the strength of smart-phone demand and a recovering economy,” Quinsey says. “I am aware of economic headway, but I now believe I was not aggressive enough,” he adds. 

“I also expect increased capital expenditures in second-half 2010 to support long-term growth,” says Quinsey. The goal is a sustainable 20% compound annual growth rate (which TriQuint should exceed this year) and greater than 20% operating margin. “It reflects our conviction that the RF market will be strong for years to come. And we have margin opportunity that comes with growth,” believes Quinsey.

See related items:

TriQuint grows 52% despite dip from last quarter

TriQuint wins AFRL contract for GaN modules to extend range of drone aircraft

TriQuint wins Samsung Quarterly Quality Award

Search: TriQuint

Visit: www.triquint.com