RFMD Changes GaAs Strategy

 By altering its GaAs sourcing, RFMD expects to optimize manufacturing capacity, lower costs, and generate more stable operating results.

Manufacturing will soon be phased out at RF Micro Devices, Inc.’s (RFMD) Newton Aycliffe, UK-based gallium-arsenide (GaAs) pseudomorphic-high-electron-mobility-transistor (pHEMT) facility. Most GaAs manufacturing will be transitioned to the company’s GaAs heterojunction-bipolar-transistor (HBT) manufacturing facility in Greensboro, NC. RFMD will partner with leading GaAs HBT foundries for additional capacity.

The transition will occur over the next nine to 12 months to support existing millimeter-wave customer contracts. Once implemented, RFMD expects annual cost savings of approximately $20 million (or $5 million per quarter).

The Newton Aycliffe GaAs pHEMT facility had been RFMD’s primary source for cellular switches. In recent years, however, the firm has transitioned to higher-performance, lower-cost silicon-on-insulator (SOI) switches. RFMD is seeking a buyer for the Newton Aycliffe facility. If a buyer cannot be found, the facility will be closed once contractual obligations are met.

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