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13 February 2008


Anadigics’ record sales boosted by 3G and WLAN/WiMAX

For fourth-quarter 2007, Anadigics Inc of Warren, NJ, USA, which makes GaAs-based wireless and broadband communications components and modules, has reported its 11 th consecutive quarter of revenue growth, to a record $67.6m. This is up 13.5% on $59.5m last quarter and 39.4% on $48.5m a year ago (near the top end of October’s guidance of 10-14% and 35-40%, respectively).

Broadband revenue was $25.3m, up 13.6% year-on-year but down 1% sequentially. However, wireless revenue was $42.3m, up 24.5% sequentially and 61.3% year-on-year. “Anadigics’ momentum in 3G and WLAN/WiMAX continued to accelerate at a solid pace, with sequential revenue growth in the fourth quarter of 37.9% and 19.5%, respectively,” says Dr Bami Bastani, president and CEO. Top customers included Samsung, Intel, LG Electronics, and Huawei.

Net income was $2.9m, up from $2.4m last quarter and a net loss of $0.1m a year ago.

“We demonstrated continuous improvements in our manufacturing operation, leading to higher-than-anticipated gross margins [of 36.1%, up from 35.1% in Q3/2007],” says Tom Shields, executive VP and chief financial officer. “We continue to improve our manufacturing efficiencies, and our production capacity plans continue to progress through equipment expansion in our New Jersey fab, qualifying external foundries and building our next fab in China,” adds Bastani. Cash generated of $19.5m offset capital expenditure of $19m.

For full-year 2007, net sales were a record $230.6m (up 38.5% on $166.4m in 2006). Broadband revenue was $101.6m (up 35%), including WiFi and WiMAX revenue up 52%. In particular, revenue for WiMAX PAs doubled year-on-year. Wireless revenue was $129m (up 41.4%), driven by 3G power amplifiers (after exiting the commoditized, low-margin 2G GSM/GPRS market early in 2007). In particular, demand for Anadigics’ third-generation of HELP PAs doubled for WCDMA HSPA during 2007, says Bastani.

Gross margin rose from 31.2% to 35.7%. Compared with a net loss of $8.8m in 2006, for 2007 Anadigics reported a net income of $6m (its first annual net profit since 2000).

For first-quarter 2008, Anadigics expects revenue to rise again, by 1-4% on Q4/2007 to $68-70m (unaffected by typical industry seasonality: the third consecutive year of Q1-over-Q4 sequential growth). This is also up 37-41% on a comparable basis from Q1/2007. Growth will be led by 3G wireless and WLAN. “We are expecting to buck seasonality in Wireless in the first quarter while working to build further market share with our top-tier customers,” says Bastani.

However, net income per share is expected to fall from Q4/2007 (from $0.05 to $0.02-0.03), due to increased funding for manufacturing production in the New Jersey fab to meet customer demand, increased R&D investment, and lower revenue in cable infrastructure.

“In the first quarter, we are expecting an unfavorable product-mix shift related to lower revenue from cable [CATV] infrastructure and increased investments in manufacturing, which will lower gross margins from the fourth quarter,” says Shields.

However, cable infrastructure may resume growth in second-quarter 2008, for which customers’ orders and forecasts are stronger. “We believe this shift is temporary, and therefore we expect that we are better positioned to resume quarterly gross margin expansion in the second quarter,” reckons Shields.

In addition, Bastani highlighted new products that Anadigics launched at this week’s 2008 GSMA Mobile World Congress in Barcelona, Spain, including the 5mm x 5mm AWT6155 third-generation quad-band polar EDGE PA module (half the size of current-generation EDGE PA modules) for use with Qualcomm's WCDMA and HSPA chipsets, and the 4.5mm x 4.5mm AWM6422 PA for 2.3-2.4GHz WiMAX and WiBro, which can be operated at not just 3.3V but also supply voltages up to 4.2V.

See related items:

Anadigics’ margins dip during accelerated capacity ramp

Anadigics acquires Fairchild’s RF Group design center

IQE wins multi-year contract as preferred epi supplier to Anadigics

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