News Article

Quinsey Senses Opportunities Amid Slump

The TriQuint CEO says that now is time to invest "“ and not just in cost-cutting, but also in future business opportunities.

TriQuint Semiconductor is in a strong position to weather the economic storm.

That was the clear message from Ralph Quinsey, the Oregon-based firm s CEO, during TriQuint s latest financial results announcement.

"We could have a very good year in 2009," Quinsey told investors, despite the late-2008 slump in demand that has hit suppliers across virtually the entire commercial landscape.

TriQuint was by no means immune to the decline, and because of that and the wider inventory correction in phone handset and wireless LAN applications, its fab utilization level has dropped significantly.

However, Quinsey has seen a January bounce as conditions began to improve, and disclosed that TriQuint has no intention of idling any of its chip manufacturing facilities.

The CEO described 2008, which delivered record total revenues of $573.4 million, as an "extraordinary year", muted only by the fourth-quarter dip.

Even with that late 20 percent sequential decline, annual sales rose 21 percent on the figure recorded in 2007. That performance would have generated a net profit of just over $40 million, were it not for the need to write down so-called goodwill on the company s balance sheet (see newsfeed entry for full financial details).

Because of those write-downs, which relate largely to acquisitions of Peak Devices and WJ Communications, TriQuint recorded a net loss of $33.8 million in the final quarter of 2008.

But behind that headline figure, the company is actually generating plenty of cash - $33.5 million in the fourth quarter alone "“ and is now looking to invest in technologies that could prove lucrative when the market picks up again.

Quinsey expects that to be in the second half of 2009, and pinpointed key growth areas including smartphones, the transition to 3G wireless communication in China, and the continued trend towards handsets with built-in wireless LAN.

Military applications also proved very lucrative in late 2008, with GaAs-based chips becoming more widely deployed in advanced radar systems.

One specific radar application that looks set to grow quickly in 2009 is on board the B2 Bomber military aircraft, for which Quinsey predicts a production ramp in the coming months.

While the CEO also commented on a “cloudy" economic outlook and was unable to give very specific financial guidance for the coming quarters, he had already painted one of the most positive reflections on the global recession yet seen among semiconductor manufacturers.

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