19 March 2013

RFMD announces flexible GaAs sourcing strategy

Radio-frequency component and compound semiconductor company RF Micro Devices Inc of Greensboro, NC, USA has announced a new gallium arsenide (GaAs) sourcing strategy intended to increase manufacturing flexibility, expand gross margin, and support aggressive growth.

RFMD will phase out manufacturing in its GaAs pseudomorphic high-electron-mobility transistor (pHEMT) facility in Newton Aycliffe, UK and transition most GaAs manufacturing to its GaAs HBT manufacturing facility in Greensboro. RFMD will also partner with GaAs HBT foundries for additional capacity.

The Newton Aycliffe GaAs pHEMT facility had been RFMD’s primary source for cellular switches, which RFMD has transitioned to higher-performance, lower-cost silicon-on-insulator (SOI). The transition will occur over the next 9-12 months to support existing millimeter-wave customer contracts. Once implemented, RFMD expects annual cost savings of about $20m ($5m per quarter).

“RFMD is enjoying increasing demand for our GaAs- and silicon-based RF solutions… including power amplifiers, switches, antenna tuners, and envelope tracking solutions,” says president & CEO Bob Bruggeworth. “The combination of our industry-leading internal GaAs manufacturing capabilities and our external GaAs and silicon foundry partnerships support our long-standing commitment to ‘Optimum Technology Matching’, satisfy the full breadth of our customers’ performance, size, and cost requirements, and give RFMD unlimited growth potential,” he adds. “We expect these structural changes to have a lasting positive effect on the company's cost structure, resulting in meaningful gross margin expansion.”

RFMD is actively seeking a buyer for the Newton Aycliffe facility. If a buyer cannot be found, the facility will be closed once contractual obligations are met.

See related items:

RFMD delays Greensboro fab investment as it completes Filtronic acquisition

Tags: RFMD Newton Aycliffe

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