RF Micro Devices, Inc.
RFMD, a global leader in the design and manufacture of
high-performance radio frequency solutions, announced today 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 Newton Aycliffe, UK-based GaAs pHEMT
facility and transition most GaAs manufacturing to its GaAs HBT manufacturing
facility in Greensboro, NC. RFMD will also partner with leading 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 nine to 12 months to support existing millimeter wave
customer contracts. Once implemented, RFMD expects annual cost savings of
approximately $20 million, or $5 million per quarter.
Bob Bruggeworth, president and CEO of RFMD, said, "RFMD is enjoying increasing
demand for our GaAs- and silicon-based RF solutions by delivering the
industry's highest performance and most innovative products and technologies,
including power amplifiers, switches, antenna tuners, and envelope tracking
solutions. The combination of our industry-leading internal GaAs manufacturing
capabilities and our external GaAs and silicon foundry partnerships support
our longstanding commitment to Optimum Technology Matching,^® satisfy the full
breadth of our customers' performance, size, and cost requirements, and give
RFMD unlimited growth potential. 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.
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