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IQE

14 January 2016

Qualcomm and TDK forming JV to provide RF front-ends for mobile devices

Qualcomm Inc of San Diego, CA, USA and electronics component maker TDK Corp of Tokyo, Japan have agreed to form the joint venture RF360 Holdings Singapore Pte Ltd to enable delivery of RF front-end (RFFE) modules and RF filters into fully integrated systems for mobile devices and fast-growing business segments such as Internet of Things (IoT), drones, robotics and automotive applications.

The joint venture will draw upon TDK's capabilities in micro-acoustic RF filtering, packaging and module integration technologies and Qualcomm's expertise in advanced wireless technologies – via the RF front-end products of its affiliate Qualcomm Technologies Inc (QTI), which operates Qualcomm's semiconductor business Qualcomm CDMA Technologies (QCT) – to serve customers with RF solutions into fully integrated systems.

In addition to creating RF360 Holdings, Qualcomm and TDK will expand their collaboration around key technology fields, including sensors and wireless charging.

Subject to the receipt of regulatory approvals and other closing conditions, the agreement is expected to close by early 2017.

"TDK is a leading electronic components manufacturer with cutting-edge expertise in RF filters and modules, and we are looking forward to deepening our collaboration and together accelerating innovation and better serving the ecosystem for next-generation mobile communications," says Qualcomm's CEO Steve Mollenkopf. "The joint venture's RF filters will bolster Qualcomm RF360 front-end solutions to enable Qualcomm Technologies Inc (QTI) to deliver a truly complete solution to the ecosystem. This will enable us to expand our growth opportunity by allowing us to accelerate our strategy to provide OEMs across our business segments with fully integrated systems that will enable them to deliver at scale and on an accelerated timeframe," he adds.  

"Customers will benefit from our unique and comprehensive portfolio, which will further strengthen TDK's position in key growth business segments," says TDK's president & CEO Takehiro Kamigama. "It was a major objective to ensure that our customers can continue to expect a seamless supply of discrete filters and duplexers, as well as modules."

Mobile communications is placing growing demands on all players, notes Qualcomm. For example, current and future smartphones must support dozens of frequency bands for 2G, 3G and 4G LTE, while offering connectivity for wireless LAN, satellite navigation, Bluetooth, and more. In addition, the convergence of 4G mobile communications and the IoT means that manufacturers of wireless solutions for mobile IoT devices must achieve new levels of miniaturization, integration and performance, especially for the RF front-end in these devices. Further, 5G will expand this complexity even more. Module solutions will be essential to supporting this increasing complexity in the RFFE.

Qualcom reckons that, together with RF360 Holdings, QTI will be positioned to design products from the modem/transceiver to the antenna in a fully integrated system.

RF360 Holdings will have a comprehensive set of filters and filter technologies, including surface acoustic wave (SAW), temperature-compensated surface acoustic wave (TC-SAW) and bulk acoustic wave (BAW) to support the wide range of frequency bands being deployed in networks across the globe. Moreover, RF360 Holdings will enable the delivery of RFFE modules that will include front-end components designed and developed by QTI. These components include CMOS (complementary metal–oxide–semiconductor), SOI (silicon on insulator) and GaAs (gallium arsenide) power amplifiers, a broad portfolio of switches enhanced via a recent acquisition, antenna tuning and envelope tracking.

RF front-ends will represent an $18bn opportunity by 2020, forecasted market reserch firm Mobile Experts in December, with filters acting as a key driver. According to US-based Mobile Experts and market research firm Navian in Japan, the filter assets that will reside in RF360 Holdings are currently among the top 3 in the industry. TDK is currently shipping in excess of 25 million filter functions per day and growing, and holds design wins at all major handset OEMs, including leading premium-tier smartphones. TDK, and subsequently RF360 Holdings, is committed to investing in capacity increases to meet the growing industry demand. The business that will be transferred constitutes part of the TDK SAW Business Group activities, and the current annual revenue run rate is approaching $1bn of sales (involving about 4200 staff). RF360 Holdings will be a Singapore corporation (with headquarters functions in Munich, Germany) with R&D, manufacturing and/or sales locations in the USA, Europe and Asia.

RF360 Holdings will initially be owned 51% by Qualcomm Global Trading PTE Ltd (QGT) and 49% by TDK subsidiary EPCOS AG. Filter and module design and manufacturing assets, plus related patents, will be carved out from TDK and its subsidiaries and be largely acquired by RF360 Holdings, with certain assets being acquired directly by Qualcomm affiliates. QGT has an option to acquire (and EPCOS has an option to sell) the remaining interest in the joint venture 30 months after the closing date.

Giving effect to the payments to be made at the closing, additional future payments to TDK based on sales by the joint venture of RF filter functions, as well as Qualcomm and TDK's joint collaboration efforts (and assuming QGT's exercise of its option to acquire EPCOS' interest in the joint venture), the total transaction value is expected to be about $3bn. Qualcomm expects the transaction to be accretive to non-GAAP earnings per share in the 12 months following the transaction close.

In addition to the joint venture, Qualcomm and TDK have agreed to deepen their technological cooperation to cover a wide range of technologies for next-generation mobile communications, IoT and automotive applications, including passive components, batteries, wireless charging, sensors, and MEMS.

Tags: CMOS PAs

Visit: www.qualcomm.com

Visit: www.tdk.com

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