TriQuint Sees Fab Utilization Spring Back
GaAs and GaN device manufacturer TriQuint Semiconductor is expecting a sharp uptick in revenues in the coming months, as demand for its products bounces back from a recession-hit first quarter.
Reporting the Oregon company s financial results for the opening three months of 2009, senior executives revealed first-quarter revenues of just under $119 million - down 20 per cent on the closing quarter of 2008 - and a net loss of $15.6 million.
But with demand appearing to flood back in March and April, chief financial officer Steve Buhaly predicted a 20 per cent sequential increase in sales for the current quarter, to between $140 million and $150 million.
Buhaly confirmed that TriQuint already had bookings valued at $145 million for the current quarter, but the company is remaining cautious with its guidance, in case the sudden return of demand turns out to be merely a re-stocking exercise, rather than a true reflection of end-market activity.
Such was the drop-off in manufacturing requirements during the first quarter of 2009 that TriQuint instigated mandatory time-off across its workforce, and registered a fab utilization rate of only 35 per cent.
But with demand springing back in the past few weeks, that utilization figure should rise to as high as 60 per cent.
"It should be noted that an inflection point of increased demand occurred late in the quarter as handset inventory normalized, supporting higher revenue expectations in Q2," said TriQuint CEO Ralph Quinsey.
He believes that the very early inventory reductions made throughout the handset supply chain in late 2008 may have "overshot", meaning that a sudden re-stocking of those inventories was subsequently required.
"In the very short term, things look pretty encouraging," Quinsey added. "It s not clear to me, though, if the market is reacting to an oscillation in inventory declines, or if we have fully embraced some sort of recovery. So we're being cautious about our outlook."
With sales into networking applications dropping by nearly 30 per cent sequentially, and the wireless LAN market remaining very weak, revenue from handset applications accounted for 58 per cent of TriQuint sales in the quarter.
However, the company has just registered a first design win for its new "TriPower" product, designed for high-power RF applications and based on its unique high-voltage HBT technology.
Another bright spot outside of handsets is the military and aerospace market, which is proving impervious to the global recession.
TriQuint is supplying RF components for the F-35 Joint Strike Fighter warplane, of which 3000 are expected to be built over the coming decades.
Quinsey also professed his excitement about the smart-phone segment of the handset business, which he expects to grow this year, even as the wider industry sees a unit volume decline of some 10 per cent.
Electronics icon Apple has sourced TriQuint components for its popular iPhones, and with updated models expected to follow later this year, TriQuint should be in a strong position to benefit.
Quinsey estimates that, thanks to market share gains and the need for more GaAs content, TriQuint s revenue from handsets is growing at something like 25 per cent year-on-year.