19 March 2013

RFMD announces flexible GaAs sourcing strategy

Radio-frequency component and compound semiconductor company RF Micro Devices Inc of Greensboro, NC, USA has announced a new gallium arsenide (GaAs) sourcing strategy intended to increase manufacturing flexibility, expand gross margin, and support aggressive growth.

RFMD will phase out manufacturing in its GaAs pseudomorphic high-electron-mobility transistor (pHEMT) facility in Newton Aycliffe, UK and transition most GaAs manufacturing to its GaAs HBT manufacturing facility in Greensboro. RFMD will also partner with GaAs HBT foundries for additional capacity.

The Newton Aycliffe GaAs pHEMT facility had been RFMD’s primary source for cellular switches, which RFMD has transitioned to higher-performance, lower-cost silicon-on-insulator (SOI). The transition will occur over the next 9-12 months to support existing millimeter-wave customer contracts. Once implemented, RFMD expects annual cost savings of about $20m ($5m per quarter).

“RFMD is enjoying increasing demand for our GaAs- and silicon-based RF solutions… including power amplifiers, switches, antenna tuners, and envelope tracking solutions,” says president & CEO Bob Bruggeworth. “The combination of our industry-leading internal GaAs manufacturing capabilities and our external GaAs and silicon foundry partnerships support our long-standing commitment to ‘Optimum Technology Matching’, satisfy the full breadth of our customers’ performance, size, and cost requirements, and give RFMD unlimited growth potential,” he adds. “We expect these structural changes to have a lasting positive effect on the company's cost structure, resulting in meaningful gross margin expansion.”

RFMD is actively seeking a buyer for the Newton Aycliffe facility. If a buyer cannot be found, the facility will be closed once contractual obligations are met.

24 July 2013

RFMD selling UK GaAs fab to Phoenix-based Compound Photonics

Radio-frequency component and compound semiconductor company RF Micro Devices Inc of Greensboro, NC, USA has agreed to sell its gallium arsenide (GaAs) fabrication plant in Newton Aycliffe, County Durham, UK (Europe’s largest GaAs manufacturing facility) to Compound Photonics of Phoenix, AZ, USA. Terms of the transaction have not been disclosed.

In March, to ”increase manufacturing flexibility, expand gross margin, and support aggressive growth”, RFMD announced a new GaAs sourcing strategy involving phasing out manufacturing in its GaAs pseudomorphic high-electron-mobility transistor (pHEMT) fabrication plant in Newton Aycliffe and transition most GaAs manufacturing to its heterojunction bipolar transistor (HBT) fab in Greensboro. The Newton Aycliffe GaAs pHEMT fab had been RFMD’s primary source for cellular switches, which RFMD has transitioned to higher-performance, lower-cost silicon-on-insulator (SOI). It said at the time that the transition would occur over the following 9-12 months to support existing millimeter-wave customer contracts.

The transaction and product transition related to the divestment of the Newton Aycliffe fab are expected to provide RFMD $20m in annual cost savings ($5m per quarter). The firm expects to realize the full benefit of savings beginning in the December quarter.

Compound Photonics says that it will use the 53 acre site and 50,000-square-foot GaAs wafer fab to manufacture wavelength-stabilized red and infrared laser diodes and green frequency-doubled lasers. The lasers will be used as illumination sources in the firm’s miniature high-definition 1080p projectors for smartphones, tablets and other mobile devices, as well as ultra-high-definition 4K projectors and automotive head-up displays. Wavelength-stabilized infrared lasers for emerging gesture recognition applications will also be manufactured using wafer-scale production methods.

The Newton Aycliffe fab complements Compound Photonics’ 40,000 square-foot semiconductor processing facility in Phoenix, where it manufactures liquid crystal on silicon displays and optics systems for its laser projection light engines.

“Compound Photonics will soon release projector products for mobile devices that are three times brighter and smaller than current state-of-the-art,” says president & CEO Jonathan A. Sachs, Ph.D. “To achieve these next-generation levels of performance we need to vertically integrate the design and manufacture of the entire light engine. This acquisition will bring in-house the manufacturing capabilities for the lasers required to power these engines,” he adds. “The skilled and experienced people, the fab with its toolset, supply chain, mature processes, and a track record of high-volume production are ready-made for our laser production.”

The addition of the systems, 6-inch wafer fabrication equipment and R&D capabilities as well as the manufacturing team (with experience supplying high-volume components to leading mobile phone makers) expands Compound Photonics’ capacity and flexibility to meet its aggressive growth plans, the firm says. “In time, this fab could become the largest manufacturer of laser diodes and purpose-built lasers in the world,” it adds.