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News

26 July 2007

 

TriQuint’s profits slashed despite growth in WLAN, WCDMA/EDGE and transmit modules

For second-quarter 2007, RFIC maker TriQuint Semiconductor Inc of Hillsboro, OR, USA has reported revenues of $113.8m (up 3% on $110.6m last quarter and up 18% on $96.3m a year ago).

This was split by geographic region between Asia (48%), Americas (38%) and Europe (14%) and by application sector between military (11%), networks (35%) and handsets (54%). Year-on-year growth was 20% in military (led by satellite revenue), 9.6% in networks (including 40% in WLAN due to better-than-expected growth in first-generation MIMO solutions, and 103% growth in ground-station products) and faster-than-market growth of 28% in handsets (driven by WCDMA, EDGE and GSM shipments and increases in foundry business for CDMA). For the sixth consecutive quarter, Motorola and Samsung each comprised more than 10% of revenues (24% collectively).

In particular, year-on-year, revenues grew respectively 152% for WCDMA/EDGE and 141% for transmit modules (with GSM transmit modules growing 60% - including Vodapahone handsets made by ZTE for China and India - and CDMA, WCDMA and EDGE modules now ramping into production).

"Strong revenue performance is due to new product success and design wins with both new and existing customers [including a record number of handset design wins],” says president and CEO Ralph Quinsey. “In Q2 we launched our vision ‘Simplifying RF Connectivity’ for broadband communications, providing RF engineers around the world unique, highly integrated products, more high-performance packaged devices and simplified channel access,” he adds. “With the launch, we released our first product selection guide, an overview of nearly 500 new and existing RF products.”

However, after equity compensation expense of $2.1m, gross margin has fallen from 31.1% last quarter to 26.5%. Of this 4.6% drop, 3.6% was due to $4.1m in excess inventory charges, $3m of which was due to a single device, applicable uniquely to a platform that did not meet expectations, at a single ‘significant customer’. Also, manufacturing cost reduction plans involving changes to process flow (expected to save $1.5m per quarter) were delayed for engineering evaluation from Q2 to Q3. Altogether, Q2 net income was reduced to just $1.4m (down from $5.6m a year ago and $6.4m last quarter).

Nevertheless, bookings in Q2/2007 were $108m (the firm’s second highest ever). For Q3, revenue is expected to be slightly up from Q2/2007 (moderated by inventory adjustments as well as foundry demand dropping back). In particular, growth is expected at all handset customers, Quinsey says, including its two 10%-plus customers Motorola and Samsung. For Q4, Quinsey expects both handset and network revenue growth to accelerate. For full-year 2007, revenue is expected to rise 14-18 % year-on-year, with earnings up 10-20%.

See related items:

TriQuint cuts Q2 income guidance from $6m to $1-2m

TriQuint results boosted by new top-five handset customer

Visit: http://www.triquint.com