Company expects to optimize internal manufacturing capacity, lower costs, and generate more predictable operating results.
RF Micro Devices, Inc. (Nasdaq:RFMD), a global leader in the design and manufacture of high-performance radio frequency solutions, 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 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.
RF Micro Devices, Inc. (Nasdaq:RFMD) is a global leader in the design and manufacture of high-performance radio frequency solutions. RFMD's products enable worldwide mobility, provide enhanced connectivity and support advanced functionality in the mobile device, wireless infrastructure, wireless local area network (WLAN or WiFi), cable television (CATV)/broadband, Smart Energy/advanced metering infrastructure (AMI), and aerospace and defense markets. RFMD is recognized for its diverse portfolio of semiconductor technologies and RF systems expertise and is a preferred supplier to the world's leading mobile device, customer premises and communications equipment providers.
Headquartered in Greensboro, N.C., RFMD is an ISO 9001-, ISO 14001-, and ISO/TS 16949-certified manufacturer with worldwide engineering, design, sales and service facilities. RFMD is traded on the NASDAQ Global Select Market under the symbol RFMD. For more information, please visit RFMD's web site at www.rfmd.com.
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