RF Micro Devices Announces Plans to Manufacture Indium Phosphide Integrated Circuits

Greensboro, NC. RF Micro Devices, Inc. (Nasdaq: RFMD), a leading provider of proprietary radio frequency integrated circuits (RFICs) for wireless communications applications, announced today that it intends to develop and manufacture integrated circuits utilizing indium phosphide (InP), a next-generation semiconductor process technology. The addition of InP will extend the Company s design expertise to include five major semiconductor process technologies - InP, GaAs HBT, silicon germanium, silicon BiCEMOS and GaAs MESFET.

Indium Phosphide Has Superior Characteristics

Indium Phosphide is widely viewed by industry experts as having performance characteristics that are superior to those of existing process technologies. For example, InP has been shown to have better thermal characteristics, higher frequency response and lower threshold voltages than existing technologies. Better thermal characteristics enable the manufacture of identical components in smaller form factors. A power amplifier, for example, manufactured with InP would typically be smaller in size and higher in efficiency than a comparable power amplifier manufactured using current process technologies. More importantly, the higher frequency response of InP enables the ultra high-data-rate optical communications operating at 40 GB. Finally, lower threshold voltages enable power amplifiers to operate at lower supply voltages and are ideal for ultra high-speed fiber communications using three volts.

Within the fiber-optic industry, the list of applications that would benefit from InP s characteristics continues to grow. The Company currently anticipates that fiber-optic applications suited to InP include laser drivers and modulators, transimpedance amplifiers, ultra high-speed clock recovery circuits and multiplexers/demultiplexers.
Within the wireless handset market, it is anticipated that future generations of handsets will require higher levels of integration. By enabling the manufacture of smaller power amplifiers operating at higher efficiencies and at lower voltages, InP will support those higher levels of integration and further RF Micro Devices strategy of Total Radio(TM), which anticipates the integration of the entire radio section of any wireless device onto a single module.

New Process Technology Leverages Key Competitive Strengths

The manufacture of InP is expected to leverage a number of RF Micro Devices key competitive strengths. Among those strengths are the Company s extensive design expertise and its proven GaAs HBT manufacturing capability, which ranges fully from the manufacture of GaAs HBT starting material through to finished products. Additionally, RF Micro Devices has significant experience commercializing advanced semiconductor process technologies.

RF Micro Devices is the world s leading supplier of GaAs HBT RFICs and has achieved world-class manufacturing yields in GaAs HBT. The Company currently has in place the majority of the infrastructure necessary to manufacture Indium Phosphide integrated circuits.

"RFMD has demonstrated excellence in the epitaxial growth and wafer fabrication of GaAs-based, HBT integrated circuits. The manufacture of InP-based, HBT integrated circuits fits nicely into our facilities and equipment and leverages our core competencies within the manufacture of compound semiconductor integrated circuits," said Art Geissberger, vice president of wafer fabrication operations of RF Micro Devices.

From a design perspective, ultra high-speed and ultra high-data-rate fiber-optic applications are similar to RF applications, and the Company plans to leverage its extensive design expertise to design InP components for both wireless and fiber-optic markets.

The Company s design expertise with multiple process technologies drives its OTM(TM) strategy, through which it matches the appropriate process technology to each product according to the best possible combination of price and performance. RF Micro Devices enhances its OTM(TM) strategy with the addition of InP.

"We believe the addition of Indium Phosphide will enable RF Micro Devices to continue to provide our customers with high-performance components at the lowest possible price. We led our industry in reducing the cost of GaAs HBT through high-volume commercial production, and we see similar potential as we commercialize Indium Phosphide. We believe GaAs HBT and Indium Phosphide are very complementary process technologies, and the combination of both technologies enables the Company to offer our customers a broader range of solutions than was previously possible," said Jerry Neal, executive vice president of strategic development of RF Micro Devices. The Company currently expects to have sample InP devices available in approximately one year and currently anticipates production volumes in approximately 18 months.

Indium Phosphide Furthers RFMD s Strategy of Total Radio™

RF Micro Devices anticipates that the advanced performance characteristics of InP will enable it to further its strategy of integrating the "total radio" onto a single module -- or a single package incorporating multiple chips -- thus reducing the size and cost of the radio section and helping to speed customers time-to-market.
Mr. Neal added, "There are a number of trends within the handset industry that validate our integration strategy.

First, the world s leading handset manufacturers are increasingly focusing on core competencies, such as software applications, baseband, marketing and distribution. At the same time, these handset manufacturers are reducing their vendor lists and seeking strategic partners who not only have adequate capacity to support their requirements, but also the ability to integrate additional components of the phone. We anticipate that the addition of Indium Phosphide will assist us in integrating the entire radio section onto a module."

RF Micro Devices, Inc., an ISO 9001-certified manufacturer, designs, develops, manufactures and markets proprietary RFICs for wireless communications applications such as cellular and PCS phones, cordless phones, wireless LANs, wireless local loop handsets, industrial radios, wireless security systems and remote meter readers.

The Company offers a broad array of products -- including amplifiers, mixers, modulators/demodulators, and single-chip receivers, transmitters and transceivers -- that represents a substantial majority of the RFICs required in wireless subscriber equipment. The Company s strategy is to focus on wireless markets by offering a broad range of standard and custom designed RFICs in order to position itself as a "one-stop" solution for its customers RFIC needs. RF Micro Devices, Inc. is traded on the Nasdaq National Market under the symbol RFMD.

This press release contains forward-looking statements that relate to the Company s plans, objectives, estimates and goals. Words such as "expects," "anticipates," "intends," "plans," "believes," and "estimates," and variations of such words and similar expressions identify such forward-looking statements. These statements are subject to numerous risks and uncertainties, including probable variability in the Company s quarterly operating results, dependence on a limited number of customers, variability in production yields, risks associated with the Company s operation of a wafer fabrication facility, dependence on third parties and risks associated with doing business in Asia and other parts of the world. These and other risks and uncertainties, which are described in more detail in the Company s Annual Report on Form 10-K filed with the Securities and Exchange Commission, could cause actual results and developments to be materially different from those expressed or implied by any of these forward-looking statements.

RF Micro Devices®, RFMD™, Optimum Technology Matching®, OTM™ and Total Radio™ are trademarks of RF Micro Devices, Inc. All other tradenames, trademarks and registered trademarks are the property of their respective owners.

The Company will hold a conference call at 10 a.m. EST today. The call is open to all interested parties and will be broadcast live over the Internet via www.streetevents.com and www.streetfusion.com.

Contact: RF Micro Devices Jerry D. Neal, Executive Vice President of Strategic Development or Dean Priddy, Vice President of Administration and CFO Tel: 336-664-123