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RFMD reports $30 million profit for fiscal 2004

After a successful year, RF Micro Devices has translated a large revenue increase into a net profit.

RFIC manufacturer RF Micro Devices (RFMD) has capped a successful fiscal 2004 by posting a profit of $29.7 million in the 12 months ending March 31.

RFMD had posted a loss of $9.3 million this time last year.

In the final quarter of the year, revenue was $163.4 million, down 15% on the seasonally strong prior quarter, but up 18% on the $138.3 million figure it posted a year ago.

Full-year revenue came in at $651.4 million, up almost 30% on the fiscal 2003 figure.

Company CFO Dean Priddy said that he was “even more optimistic about fiscal 2005”, with the company expecting further gains in its share of the power amplifier (PA) market.

RFMD is in the process of ramping up shipment of its Polaris cellular transceivers, and is also expecting this product to drive substantial increases in revenue, as early as the current quarter ending in June.

Overall, the company predicts double-digit top-line growth next year as it moves towards its goal of $1 billion revenue in 2007. The company expects its capital expenditure to be $50-60 million in the coming year.

The PowerStar PA is currently RFMD’s top product, accounting for around $280 million in revenue alone in fiscal 2004.

RFMD is also ramping up production of a PA for what it describes as the world’s biggest volume manufacturer of CDMA handsets.

The cellular business continues to dominate RFMD’s sales: in the most recent quarter, this segment accounted for $152 million, with the wireless connectivity group contributing $7.4 million and $4 million coming from the infrastructure business.

While its cellular segment goes from strength to strength, RFMD admitted that its foray into the wireless LAN market hasn’t gone quite according to plan.

But company CEO and president Bob Bruggeworth predicted that next year will be a big one for Bluetooth and WLAN, with double-digit growth expected in the company’s wireless connectivity operation.

Although margins are generally regarded as low in the WLAN segment, Bruggeworth said: “We see ways to make a lot of money [in the WLAN market].”

RFMD estimated that its current fab utilization is at around 90%. The company is in the process of transferring manufacturing to its 6-inch GaAs wafer fabrication facility, with over half of its production now on this line.

However, the company stressed that its 4-inch facility will not be discontinued, with future GaN device production expected to join the current GaAs HBT and PHEMT switch manufacture on this line.

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