Anadigics stock price hits five-year high
Shares in the Warren, NJ, chip manufacturer Anadigics raced to a five-year high of $13.71 on the Nasdaq stock exchange yesterday (February 20).
Investor confidence in the GaAs component specialist has grown strongly since May 2005, when the company s stock hit an all-time low of just $1.31.
Anybody shrewd enough to have bought shares in Anadigics at that point would have now seen a ten-fold return on their investment as the firm continues to fill its GaAs fab with RFIC products for applications such as wideband-CDMA mobile handsets and high-speed wireless LAN connection.
Last week, Anadigics reported a 57 percent increase in annual sales, with fiscal 2006 revenue of $169.9 million.
Although it still posted a loss of $8.2 million on the full year, strong sales in the final quarter of 2006 hinted that profitability is just around the corner.
Excluding stock compensation expenses related to the company s excellent share price performance, Anadigics actually posted a profit of $2.8 million in the quarter that ended on December 31, 2006.
And even when stock compensation was taken into account, as is necessary to comply with US generally accepted accounting principles, Anadigics almost broke even, with a net loss of only $0.1 million.
Anadigics has been able to benefit from the popularity of various high-speed wireless communication protocols, such as wideband-CDMA in the market for cellular handsets. Anadigics power amplifiers (PAs) and other front-end RF products are becoming increasingly deployed in these applications.
The company has also benefited from constraints in the handset supply chain, which has meant that some of its key rivals in the PA business have been unable to keep pace with demand from all of their customers. This has allowed Anadigics to gain more design wins at lower-tier handset vendors in China, while it has also won recent business with number-three handset maker Samsung.
Now, the company is expecting to cash in on the emergence of new broadband technologies such as the 802.11n draft standard for high-speed wireless LAN, where it has an existing supply deal with PC chip giant Intel.
That relationship should also help Anadigics to penetrate the market for WiMAX chipsets, which Intel is keenly promoting. Although WiMAX applications represent only minimal volumes of GaAs chips at the moment, the future opportunity could be huge if the technology does take off in a big way.
At the recent 3GSM World Congress in Barcelona, Spain - the key trade event in the global mobile communications calendar - Anadigics introduced a two more GaAs-based products.
The company s new dual-band AWT6221 product for wideband-CMDA applications uses two independent PA chains and is designed to be compatible with both 3G handsets used in the US, and also world-phones.
Incorporating InGaP/GaAs die with integrated bipolar and field-effect transistors, the AWT6221 is said to deliver a 25 percent increase in handset talk-time compared with its rivals.
Anadigics also introduced the AWM6423 PA for mobile WiMAX applications. This amplifier also uses the company s advanced InGaP/GaAs chip designs.
Exuding confidence in anticipation of a strong start to 2007, Anadigics says that it expects a 3 percent increase in sales in the first quarter of the year, in spite of the usual downturn caused by handset industry seasonality at this time.