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RF Micro Devices Announces Agreement to Purchase GPS Development Operation From IBM

Source: RF Micro Devices, Inc.

GREENSBORO, N.C.--(BUSINESS WIRE) Provides RFMD Advanced Global Positioning System (GPS) Technology And Development Expertise

* Diversifies RFMD s Product Offerings And Customer Base * Leverages RFMD s Capabilities In RF Design, Silicon Systems And Small, Low-Cost Modules * Strengthens RFMD s Ability To Offer Complete Radio Solution

RF Micro Devices, Inc. (Nasdaq: RFMD - news), a leading provider of proprietary radio frequency integrated circuits (RFICs) for wireless communications applications, today announced it has agreed to purchase IBM s (NYSE: IBM - news) GPS development operation.

Terms of the transaction were not disclosed. The transaction is subject to customary closing conditions and is expected to be completed during RFMD s fiscal third quarter.

The acquisition provides RFMD with advanced GPS technology and access to IBM s chipscale packaging technology. The GPS development operation was first to introduce GPS solutions using Silicon Germanium (SiGe), which reduces size, power consumption and noise figure, and enables higher levels of integration. As part of the transaction, IBM has agreed to transfer to RFMD intellectual property associated with these products, for which RFMD plans to file for patent protection.

IBM s GPS development operation is comprised primarily of engineers and technical marketing specialists with extensive development and application experience and broad customer knowledge. The acquisition will be incorporated into RFMD s Communications Semiconductor Division, and RFMD will add two new design centers in Fishkill, NY and Irvine, CA as a result of the transaction.

The addition of GPS solutions and expertise expands RFMD s product portfolio and customer base. Products currently shipping include GPS chipsets, which include the digital signal processor, low noise amplifier and RF integrated circuit, and GPS engine modules, which combine the components of GPS chipsets with the components necessary to interface with the end-user device. Existing customers include companies offering in-car, hand-held and marine navigation services. RFMD plans to utilize the GPS technology and engineering resources acquired ultimately to provide GPS solutions to handset manufacturers, a trend expected to accelerate as wireless service providers comply with regulatory mandates and seek new data-based services. Finally, RFMD anticipates the acquisition will add GPS functionality that will enable it to offer a complete radio solution that encompasses WLAN, Bluetooth™, GPS and fully integrated radio capabilities for mobile handsets and other markets.

William Pratt, chairman and chief technical officer of RF Micro Devices, said, This acquisition immediately establishes for us a strong presence in the GPS market, while strengthening our extensive module and silicon system development efforts. We expect significant synergy with our core RF design capabilities and anticipate our combined expertise will help to accelerate the commercialization of next-generation solutions currently in development, such as GPS on a single chip.

Jerry Neal, executive vice president of marketing and strategic development, said, The GPS products and expertise we ve acquired significantly broaden our total addressable market. Industry analysts estimate the global market for GPS integrated circuits will grow to approximately $1.2 billion in 2005 from approximately $270 million in 2000. Of the $1.2 billion, nearly half is forecast for use in mobile handsets. Accordingly, we fully expect our leadership position in the handset market will help drive sales of our GPS devices.

RF Micro Devices, Inc., an ISO 9001-certified manufacturer, designs, develops, manufactures and markets proprietary radio frequency integrated circuits (RFICs) primarily for wireless communications products and applications such as cellular and PCS phones, base stations, wireless LANs, and cable television modems. The Company offers a broad array of products - including amplifiers, mixers, modulators/demodulators, and single-chip receivers, transmitters and transceivers - representing 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. For more information about RFMD, visit our website at www.rfmd.com.

This press release contains forward-looking statements that relate to RF Micro Devices plans, objectives, estimates and goals. Words such as expects, anticipates, intends, plans, projects, believes, and estimates, and variations of these words and similar expressions, identify these forward-looking statements. RF Micro Devices business is subject to numerous risks and uncertainties, including variability in quarterly operating results, the rate of growth and development of wireless markets, risks associated with the operation of wafer fabrication facilities, its ability to manage rapid growth and to attract and retain skilled personnel, variability in production yields, raw material availability, manufacturing capacity constraints, dependence on a limited number of customers and dependence on third parties. These and other risks and uncertainties, which are described in more detail in RF Micro Devices most recent 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.
Web site: http://www.rfmd.com

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