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TriQuint exits opto modules to focus on chips

Suffering in a "brutal" market, TriQuint decides to exit the pluggable optical module business to concentrate on InP chips and sub-assemblies instead.

TriQuint Semiconductor is to discontinue investment in its pluggable optical module business.

The company s optoelectronics strategy will now focus on InP chip manufacturing and supply of optical sub-assemblies.

The restructuring will see 200 jobs eliminated in total at its Pennsylvania and Mexico facilities, but should save TriQuint $18 million in annual costs after one-time charges have been made. The company posted a net loss of $3.8 million for the nine months up until September 30 this year.

Although the optoelectronics market accounted for 12% of the company s total revenue in its two most recent quarters, the vast majority of this figure came from sales of components and sub-assemblies.

TriQuint says that it will continue to support customers that it currently supplies modules to in volume, while making the technology available to other vendors.

Describing the optical module business as "littered with the walking wounded", TriQuint CEO Ralph Quinsey said that with its new strategy in place the optoelectronics business should be at the break-even point by mid-to-late 2005. "Nobody in the modules business is making a profit," he added.

The switch in direction is expected to result a net cost of around $23 million, while TriQuint will also hold an auction in mid-December to dispose of excess equipment.

TriQuint plans to sell its Pennsylvania facility and then lease space from the new owner, although the building has already been up for sale for the past 18 months.

In a conference call to discuss the change in direction, Quinsey also speculated that TriQuint may be able to forge some foundry business following the further manufacturing shake-out that is expected in the optoelectronics sector.

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