18 March 2014

Combined TriQuint-RFMD to command 36% of GaAs and GaN supply into defense sector

On 24 February, RF Micro Devices and TriQuint Semiconductor announced a definitive merger agreement under which the firms will combine in an all-stock transaction. The merger will create a company surpassing current market leader Skywork in size. The new entity aims to leverage the strengths of the two firms as suppliers to high-volume markets such as mobile devices as well as network infrastructure and the defense sector.

Market research firm Strategy Analytics’ Advanced Defense Systems (ADS) service report ‘TriQuint-RFMD Merger Solidifies Semiconductor Market Share Lead in Defense Sector’ provides analysis on this deal and outlines the market share that the new company will command.

Both companies have an extensive portfolio of capabilities in semiconductor process technologies such as gallium arsenide (GaAs) and gallium nitride (GaN). The combination will collate these complementary capabilities, enabling the new firm to pursue defense market opportunities.

“In the area of Defense, TriQuint has been a leading supplier of semiconductor technologies, for example, military radar systems used on fast-jets including the F-15, F-22 and F-35,” notes Eric Higham, North American director for ADS. “The company also holds US DoD Trusted Source accreditation,” he adds. Combination with RFMD will solidify this lead, as the new entity offers an expanded portfolio of capabilities spanning both GaAs and GaN with operational efficiencies as well as manufacturing scale. “RFMD has ongoing activity in the aerospace and defense sectors with products targeting radar, communications and electronic warfare applications,” he adds. Strategy Analytics estimates that the TriQuint-RFMD operation will command over 36% of the global market for GaAs and GaN supply into the defense sector.

“The combined infrastructure and defense unit can achieve potential revenues of around $500m. Strategy Analytics’ own estimates indicate that the new company’s defense revenues will account for up to 25% of this unit revenue,” notes Asif Anwar, director of the ADS service. “As a GaAs and GaN semiconductor technologies supplier, we believe TriQuint holds the number one position in the defense space, and the combined TriQuint-RFMD entity will cement this position, extending a lead over contemporaries in this area such as Cree, Hittite and MACOM Technologies,” he adds.

See related items:

RFMD and TriQuint to merge, creating $2bn-turnover firm

Tags: RFMD TriQuint

Visit: www.triquint.com

Visit: www.rfmd.com