News

25 October 2006

 

RFMD's record revenues to continue, driven by cell-phone chip demand

For its fiscal second-quarter 2007 (to end September), RFIC maker RF Micro Devices Inc (RFMD) of Greensboro, NC, USA has reported its sixth consecutive quarterly rise in revenue, up 3.6% sequentially and 39.5% year-on-year to a record $246.9m.

Net loss was $20m, compared with net income of $13.9m the previous quarter and $5.9m a year ago. However, this is due to a $33.9m impairment charge related to selling its depreciated investment in the silicon/SiGe foundry Jazz Semiconductor (a joint venture with Skyworks Solutions Inc acquired in late September by Acquicor Technology Inc). Excluding this, operating income was $13m, down on the previous quarter's $14m but more than double the $5.5m a
year ago. The results reflect strength at leading handset makers, market share gains in RF semiconductors, and record demand for RFMD's cellular transceivers and transmit modules, says the company.

For the December quarter, RFMD anticipates continued cellular product market share gains, driven by sales of GSM/GPRS and GSM/EDGE cellular transceivers, power amplifier modules and transmit modules as RFMD benefits from record overall unit demand for cellular handsets. Revenue is expected grow 7-13% sequentially and 27-35% year-on-year to $264-280m.

"The cellular market remains strong, and RFMD continues to benefit from strategic R&D and manufacturing investments made to capture growth," says president and CEO Bob Bruggeworth. "Polaris Total Radio solution product
revenue continues to set records [rising for the ninth consecutive quarter, up 13% sequentially to 30% of total revenue], and we are very well represented in future-generation handsets with leading OEMs," he adds. RFMD
expects sales for Polaris (used in high-end, feature-rich cell phones) to continue to grow sequentially in the December quarter and to achieve year-on-year growth in 2007. Also, RFMD says it continues to advance toward production readiness of its next-generation Polaris 3 solution, as
additional transceiver design wins have been secured in future cellular handsets.

"In addition, we continue to extend our market leadership in cellular transmit modules [more than 50% of total power amplifier revenue] and expect growth in this key product segment as we leverage customer relationships, design resources and our world-class supply chain," he adds.

"Overall, RFMD is enjoying increased dollar content in cellular handsets as we deliver more functionality and value," Bruggeworth says. "We expect this trend to strengthen as the industry consolidates and as leading customers increase their reliance on those suppliers capable of delivering increased levels of value and integration."

In the wireless connectivity segment, RFMD says it also experienced strong design momentum for WLAN front-end modules and power amplifiers at the world's top-five handset makers and across multiple non-handset applications, including access points, mobile computing and consumer electronics

Dean Priddy, CFO and vice president, finance and administration, adds: "Our gross margin improvement [from 33.4% the previous quarter to 34.9%] exceeded
the guidance we provided in the June quarterly earnings release". This is a direct result of investments RFMD has made to lower its manufacturing costs, including in-sourced assembly in our Beijing facility, in-sourced GaAs pHEMT
production [at its Greensboro fab] and ongoing yield improvement initiatives."

See related items:

All that Jazz: Acquicor to acquire Jazz Semiconductor

RFMD moves up the rankings

Mobile shipments top 245m in Q3/2006; on target for 1bn by year end

Visit: http://www.rfmd.com