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RFMD completes Filtronic acquisition, gains GaAs fab

Posted: 05 Mar 2008 ?? ?Print Version ?Bookmark and Share

Keywords:RF Micro Devices? acquisition? Filtronic Compound Semiconductors? 6-inch GaAs wafer fab? millimeter wave RF semiconductor business?

RF Micro Devices has completed the acquisition of Filtronic Compound Semiconductors Ltd. Under the terms of the transaction, RFMD paid an acquisition price of approximately 12.5 million pounds in cash for Filtronic Compound Semiconductors. The acquisition price included the purchase of Filtronic Compound Semiconductors' 6-inch GaAs wafer fab at Newton Aycliffe, United Kingdom, and the purchase of Filtronic Compound Semiconductors' millimeter wave RF semiconductor business.

RFMD expects the addition of Filtronic Compound Semiconductors' high-volume GaAs fab will significantly reduce RFMD's GaAs pHEMT manufacturing costs and provide incremental GaAs manufacturing capacity sufficient to support near-term anticipated growth. Additionally, RFMD expects the addition of Filtronic Compound Semiconductors' microwave and millimeter wave component business will strengthen the product portfolio of RFMD's Multi-Market Products Group and be accretive to RFMD's target margin profile for its multi-market business.

Advantages gained
Bob Bruggeworth, president and CEO of RFMD, said, "With the acquisition of Filtronic Compound Semiconductors, RFMD significantly benefits in three ways. First, the acquisition significantly lowers our overall GaAs cost structure, which we believe will result in improved margins as calendar year 2008 progresses. Second, RFMD's GaAs capacity is increased by approximately 30 percent, giving us the flexibility to capture near-term demand upside and defer future fab-related capital outlays. Finally, we acquire a strong microwave and millimeter wave business that adds profitable, high-margin revenue to MPG. We are thrilled to add Filtronic Compound Semiconductors' employees, customers and technologies to RFMD, and we look forward to the growth and cost reduction opportunities this acquisition makes possible."




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