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China's 3G triple play suits GaAs vendors

Last week's announcement that China will adopt three different broadband wireless protocols presents the major GaAs players with new opportunities.

GaAs companies have welcomed the recent decision by China s Ministry of Industry and Information to roll out three broadband wireless protocols in the country, believing that the move offers up a major new commercial opportunity.

On January 7, the ministry approved licenses for China Mobile Communications, China Telecom, and China Network Communications to build 3G networks. Those networks will be based on TD-SCDMA, CDMA2000 and wideband-CDMA protocols, respectively.

US GaAs chip manufacturer Anadigics, which is focused on the broadband end of the wireless market, welcomed the development. Bruce Webber, the Warren, NJ, company s director of marketing for wireless products, told compoundsemiconductor.net:

"[The decision] significantly enlarges the market for all types of wireless components and systems," adding that Anadigics had developed products suited to each of the standards.

Asif Anwar, director of the compound semiconductor service at analyst firm Strategy Analytics, also believes that the development is good news for III-V specialists:

"With three different licenses in play, I think all the major GaAs suppliers will benefit," said Anwar. "Although it may take longer than the companies would like, since the handset market will be slower this year."

"Infrastructure roll-out will be the early opportunity," Anwar continued. "Companies like TriQuint, Avago, Skyworks and RF Micro Devices will be able to take advantage."

"Whether this will be an opportunity for high-voltage GaAs or GaN in base stations will be dependent upon the approach adopted by base station manufacturers such as Huawei, Ericsson and Nokia Siemens Networks."

RFMD s management certainly views the development as a positive one for the Greensboro-based company. At the recent Needham Growth Stock Conference, CEO Bob Bruggeworth said: "We ve been waiting a long time for this, but we are very pleased [with the decision]."

"We make components for all three of the standards issued."

While the W-CDMA and CDMA2000 standards are already well established, the 3G roll-out in China will represent the first outing for the People s Republic s home-grown TD-SCDMA protocol.

Anadigics, which believes that its long-standing business relationships with major handset companies in China gives it a unique insight into the country s 3G requirements, already has TD-SCDMA products ready to ramp.

"[Our] AWT6241 power amplifier has been used in several TD-SCDMA designs that will ramp to production this year," Webber claimed. The AWT6241 is based on InGaP HBT technology, and is suitable for both the home-grown Chinese standard and wideband-CDMA.

But although the director of marketing believes that demand for 3G products will increase gradually as the Chinese networks expand, Anadigics plans to build a GaAs chip fab in China remain on ice for now (see related stories).

"We have deferred investments in expanding our wafer capacity in China until such time as customer demand requires it," said Webber.

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