News Article
RFMD to outsource MBE and MOCVD wafer manufacturing
The transfer of RFMD's MBE growth facility to IQE should cut manufacturing costs
As previously announced, RF Micro Devices has entered into a definitive agreement to transfer its MBE wafer growth facility in Greensboro, North Carolina, to IQE.
RFMD's MBE growth facility supplies MBE wafer starting material to its wafer manufacturing facilities. The firm will continue to own and operate in Greensboro, and Newton Aycliffe, UK.
RFMD's GaAs semiconductor products incorporate transistor layers grown using either an MBE or MOCVD process. RFMD outsources all MOCVD-based starting material, and will now also begin to outsource MBE-based starting material with the completion of the transfer.
Now, RFMD has announced that IQE will supply RFMD with both MBE- and MOCVD-based starting materials.
The transfer and supply agreement will lower RFMD's manufacturing costs, beginning in the September 2012 quarter. In the June 2012 quarter, RFMD currently estimates the transaction will result in a non-cash GAAP charge of approximately $0.02 to $0.03 related to equipment and inventory write-offs and will be approximately neutral to non-GAAP operating results.
Bob Bruggeworth, president and CEO of RFMD, states, "We believe this is a mutually beneficial transaction for both RFMD and IQE. Of note, we expect this transaction will provide RFMD with lower MBE and MOCVD pricing, higher return on invested capital (ROIC), and more predictable operating results."
