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Anadigics Posts Losses, Leaders Remain Buoyant

As revenues drop for the fourth quarter in a row, Anadigics bosses assert growing wireless data markets will fuel power amplifier demand.

Semiconductor company Anadigics has reported a second-quarter net loss of $20.9 million or $0.30 per share, compared to $13.1 million or $0.19 per share last year.

Revenue has dropped for the fourth quarter in a row, with second quarter revenues down 29.5% to $25.1 million from the year-earlier quarter. This falls short of analysts' revenue estimates of $28.6 million.

Industry reports already suggest analysts are pessimistic about the company's next quarter performance, but Anadigics leaders remain buoyant.

"We believe revenues have stabilised and are pleased with the traction we continue to see in the development of our new products," said Terry Gallagher, vice president and chief finance officer. "In continuing our focus on streamlining our cost structure, we recently took actions that will further reduce annualized expenses by over $1 million."

As president and chief executive, Ron Michels, highlights, his company's growth relies on three drivers; the transition from 3G to 4G communications, deployment of small cell networks and rising use of high performance wi-fi. Each is fuelled by the increasing demand for wireless data consumption, which he is confident is rising.

“We’ve secured several design wins since starting production shipments of our single-band ProEficient [power amplifier]to tier one OEMs... and we’re preparing our next-generation dual band power amplifiers based on ProEficient technology as well," he says. “Furthermore, our dual-band power amplifier has continued to be recognised by manufacturers... Samsung is using these power amplifiers for the new Galaxy S3, available on both the Verizon and Sprint networks."

Michels also asserts that his company's small cell power amplifier represents a significant growth opportunity. Recent market forecasts indicate that unit shipments for the entire small cell market will grow by a factor of five next year.

And as Michels also points out, Anadigic's parts will be on all reference designs currently under development by the likes of Mindspeed and Qualcomm, in the small cell market.

“Some of these boxes have as many as six, seven of our power amplifiers in them," he says. “So when they start to ramp, we get a good multiplication factor."

Michels admits his business isn't seeing significant growth right now from GaN development, but reckons cable TV revenues will pick up in the fourth quarter of this year while revenues from high power infrastructure products will rise come the second half of 2013. Both sectors require GaN components, which are currently being sampled.

“In the CATV market, we continue to anticipate stable, long term growth... and we're working closely with key customers as we build traction for our next generation gallium nitride line of amplifiers," he says.

“We also anticipate a growing need for high-performance RF front end components to enable full scale deployment of 802.11ac wi-fi in mobile devices," he adds. “Our wafer process technology enables a unique combination of industry leading linearity, outstanding efficiency, and ultra-small form factor."

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