Filtronic's PHEMT production rockets to meet RFMD orders

UK-based wireless subsystem manufacturer Filtronic is now fabricating 1000 6 inch PHEMT wafers per month to satisfy orders from RF Micro Devices (RFMD). This is a tenfold increase in the production of PHEMTs over the last eight months. The transistors, in the form of passivated die, are being used in antenna switches that are integrated with RFMD s HBT-based power amplifiers to create handset transmit modules.

Until recently Filtronic s GaAs fab had been hugely under used since its high-profile opening in 1999 by UK Prime Minister Tony Blair. However, this year s increase in production has given the company a 30% share of the GaAs handset switch market.

"The company was selected by RFMD because of the competence and dedication of all of its technical people, its capacity, and the quality of its foundry," explained John Roulston, Filtronic Group s chief executive officer. The company s Integrated Products division began sampling PHEMT switches to RFMD over two years ago, and last year 100-120 PHEMT wafers were shipped each month. This year output has shot up exponentially, and RFMD expects the ramp of transmit modules to be among the fastest product launches in its history (figure 1).

"Filtronic has introduced a 24/7 operation and added a number of staff to meet that ever-increasing demand," said Roulston. The fab is now close to its current capacity and production is limited by equipment rather than cleanroom space, as today the company is using only one-third of its 100,000 ft2 cleanroom space. However, capacity will be increased in March 2006 when Filtronic will install a second multiwafer MBE reactor and additional tools that will double output to around 25,000 wafers per year. According to Roulston, annual capacity could even reach 30,000 wafers. This could be achieved partly by reducing in-line measurement and inspection processes, which is possible when experience in volume manufacturing grows.

Although RFMD is also capacity limited at the moment, it will take all of the PHEMT wafers that Filtronic can produce. Roulston admits that Filtronic may be unable to supply RFMD with all of the material it needs until upgraded capacity has been installed, but he says that the two companies have a good relationship and share each other s success.

Most of the PHEMTs manufactured for RFMD are produced at Filtronic s Newton Aycliffe site, which was acquired from Fujitsu in 1999. However, one-fifth of the epitaxy has been outsourced to one European foundry, and another European company is being considered as a second source. "Using external epitaxial services reduces the risks for fulfilling PHEMTs orders," explained Roulston, although he added that outsourcing is more expensive than producing material in-house. It will be May 2006 before Filtronic qualifies the material from its additional capacity, but in the meantime it can use wafers from stock to help meet any further increases in demand from RFMD.

Filtronic s sales of PHEMT wafers could produce an annual revenue in the range of $50-60 million. Since each 6 inch wafer features between 10,000 and 12,000 PHEMT devices, once Filtronic has upgraded its capacity it will be able to produce at least 300 million antenna switches every year. This volume equates to around one-third of the total available - a level of penetration that Roulston believes is possible. And further growth is likely. "Nokia predicts that by 2008 global handset sales will have risen from around 750 million to 1 billion annually, and that each phone will contain 11 antennae and an increased PHEMT content," said Roulston.

Filtronic is debt free following the disposal of its handset antenna business earlier this year, and sales of PHEMT switches will help to bolster the company s financial standing. In the fiscal year ending 31 May 2005, Filtronic s Integrated Products division contributed £45 million ($80 million) to the total revenue of £263 million, and this fiscal year sales are expected to hit £62 million, with more than half of this revenue generated from PHEMTs.

Although Filtronic is now benefiting from a preferred supply agreement with RFMD, the company is also sampling its PHEMTs to other manufacturers. "We re very close to signing a second deal," said Roulston. The potential contract is not with Skyworks, which uses a vertically integrated approach to produce its modules.

With Filtronic now generating significant revenues from PHEMT switches, it is possible that other GaAs transistor manufacturers will try to encroach upon its business. "Eventually people will reverse engineer our products," said Roulston. However, he believes that the PHEMT switch market is too small to warrant the investment required to construct a fab that is as good as Filtronic s, and that this product will provide the company with a good revenue for several years.

For that revenue to increase, Filtronic will have to maintain its prominent position despite challenges from alternative technologies. The company reached its dominance by replacing PIN diodes, which were widely used when handsets operated in fewer bands. Although these diodes are cheap, the technology is not suitable for the latest phones because the large number of diodes required draw a high current from the battery and reduce talk time.

MEMS technology is one of the threats to PHEMTs for the antenna switches market. These devices are already being used by Samsung, but according to Roulston there are downsides because their moving parts can stick together, and their lifetime is affected by fatigue. Despite these issues, Filtronic is also investigating the use of MEMS-based technology, in partnership with the engineering department at Durham University, UK, even though it is confident that PHEMT-based switches will dominate the handset market.

Roulston believes that Filtronic s business is not under threat from SiGe-based switches, because these devices cannot meet intermodulation specifications at a high enough efficiency. HBTs are also unsuited to the application because the antenna switch is located after the power amplifier, and the HBT cannot deal with such high power levels.

Roulston is not alone in declaring an optimistic outlook for Filtronic s business. "With the new management team delivering on different fronts, Filtronic is now a stronger, more focused, less risky business," says UK-based research firm Clear Capital. The analysts say that the Newton Aycliffe fab, which has drained £1 million per month from Filtronic for many years, is now on the road to profitability, and that the guidance offered for the GaAs production line is the most reliable ever given.

Profitable manufacturing at this site would certainly be welcomed by the UK compound semiconductor community, which lost the Caswell 6 inch GaAs line last year. Filtronic is the UK s only 6 inch wafer production line, and the fanfare that accompanied its 1999 opening is now finally becoming justified.