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RF Micro closes in on billion-dollar milestone

With revenue growing 50 per cent year-on-year, the Greensboro-based chip manufacturer is heading towards its long-term target of making annual sales in excess of a billion dollars.

RF Micro Devices (RFMD) says that it is "well on track" to meet its long-stated goal of annual revenue in excess of $1 billion.

Already the largest GaAs manufacturer in the world, RFMD says that its current wafer fab expansion program will enable it to dominate the RFIC market as chip capacity becomes an increasingly competitive weapon.

Surging demand from the top-tier makers of cell-phones drove a 50 percent year-on-year sales increase in the quarter ended June 30 as revenue reached $238.3 million. Under standard accounting methods, which included $6 million in charges, RFMD posted a net profit of $14 million.

An increase of up to 5 percent in revenue is being predicted for the current quarter, while the traditionally strong end to the calendar year should push total RFMD sales close to the billion-dollar mark in fiscal 2007 overall.

With the total market for mobile phone handsets expected to grow by at least 15 per cent this year, the top four manufacturers "“ Nokia, Motorola, Samsung and Sony Ericsson "“ are increasing their collective market share.

RFMD has strong supply deals with all the top-tier phone manufacturers and is clearly reaping the benefit of those relationships.

Currently adding capacity to manufacture GaAs PHEMT switches and GaN-based transistors, as well as its traditional volume GaAs HBT products, RFMD has taken out an additional $25 million in financing to support the wafer fab expansion (see related story).

Company CEO Bob Bruggeworth says that this investment in capacity is allowing RFMD to capture the strong demand from customers, and adds that the company is set to continue increasing its market share in handsets.

While RFMD has already begun sampling 50 W GaN-based amplifiers for wideband-CDMA base station applications, Bruggeworth revealed that first-responder emergency services were also investigating power ICs based on the wide-bandgap material for use in public mobile radios.

RFMD's management indicated that GaN-based products were still approximately a year away from being revenue-generating.

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