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RFMD moves all production testing to China

Posted: 18 Apr 2008 ?? ?Print Version ?Bookmark and Share

Keywords:RFMD celullar devices? production testing? China facilities?

RF Micro Devices Inc. has announced it will consolidate its production test facilities for high volume cellular products to reduce cycle time, better serve its customer base and improve overall profitability.

The consolidation represents the final phase of a production test transfer to RFMD's primary production test facility in Beijing, China. High-volume cellular products currently tested in RFMD's U.S. production test facility in Greensboro, North Carolina will be tested in China. RFMD anticipates that approximately 80 employees at its North Carolina production test facility will be affected. RFMD currently employs over 2,000 employees in North Carolina.

Consolidation gains
Bob Bruggeworth, president and CEO of RFMD, said, "This consolidation will reduce manufacturing cycle times, improve customer service and enhance overall profitability. RFMD's international revenue is over 90 percent of total revenue, and it is imperative that our supply chain aligns with our customers' manufacturing facilities, which are located primarily in Asia. While this is a difficult decision because of the negative impact on employees, these actions are necessary to better serve our customers, ensure competitiveness and help position RFMD for long-term sustainable profitability."

The production test facility consolidation is part of an ongoing process at RFMD to improve efficiencies, eliminate duplicative operations and better align resources for improved profitability. RFMD anticipates that it will record a cash restructuring charge of approximately $1 million, most of which should be recognized in the Q2 08. The consolidation is expected to be completed in Q3 08 and is expected to improve cash flow and profitability by approximately $3-3.5 million on an annualized basis.

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