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30 March 2007


RFMD prices $350m private placement; fiscal-year revenue to exceed $1bn, but forecasts slowdown next quarter

RF Micro Devices Inc of Greensboro, NC, USA has announced the pricing of its offering of $175m aggregate principal amount of 0.75% convertible subordinated notes due 2012 and $175m aggregate principal amount of 1.00% convertible subordinated notes due 2014 to qualified institutional buyers.

The sale of the notes is expected to close on 4 April. To cover over-allotments, RFMD also granted the initial purchaser of the notes a 30-day option to purchase up to a further $25m aggregate principal amount of 0.75% convertible subordinated notes due 2012 and up to an additional $25m aggregate principal amount of 1.00% convertible subordinated notes due 2014.

RFMD intends to use the net proceeds for general corporate purposes, including working capital, potential acquisitions and future stock repurchases.

RFMD also says that its fiscal-year revenue will exceed $1bn for the first time, while confirming its revenue and earnings guidance for its fiscal fourth-quarter (to end-March), originally provided on 23 January.

“Looking ahead to fiscal year 2008, we see growing opportunities in the handset market and the RF semiconductor market in particular,” says president and CEO Bob Bruggeworth. “We believe the R&D and other investments we have made and are making in semiconductor technology, communications systems design and manufacturing capacity are positioning us well to capitalize on the accelerating shift in value to the RF-based section of the communications path,” he adds. “There are certainly challenges in the near term as we navigate through product cycles both at RFMD and at our leading customers in the coming quarters. However, we are staying focused on the opportunities for long-term growth of our core business, diversification of our revenue and the realization of manufacturing cost savings from our investments in internal capacity.”

RFMD remains on track to ramp its Polaris 3 transceiver solution in second-half 2007 with “a large top-tier customer”, says Bruggeworth. Also, the Polaris 2 Total Radio module solution has been selected by an existing transceiver customer for the EDGE path of its next- generation WCDMA multimode platform, he adds. “Our power amplifier business remains healthy, and we see opportunities to expand our industry leadership in both EDGE and WCDMA.”

RFMD will increase investments in its higher-margin diversified products in fiscal 2008, says Bruggeworth. “GaN products are expected to begin ramping this coming fiscal year and we are already receiving initial orders.” WLAN PA revenue grew in the March quarter and is currently expected to grow about 200% in fiscal 2008. “We also continue to see considerable customer interest in our innovative GPS solution,” Bruggeworth adds.

According to Dean Priddy, CFO and VP of administration, "While we'll deliver a solid March quarter and fiscal year 2007, looking into the first quarter of fiscal 2008, we currently anticipate a slowdown in demand from a top-tier customer that will impact our operating results”. While seeing increasing strength with other customers, the overall forecast currently indicates a sequential decrease in revenue, margins and earnings per share in the June quarter, he adds.

*RFMD launches dual-band GSM/GPRS PowerStar PA module and samples quad-band EDGE power amplifier module

At this week’s CTIA Wireless 2007 show in Orlando, FL, USA, RFMD launched the RF3198 dual-band power amplifier module.

Packaged in a low-cost 7mm x 7mm x 0.9mm package, the new PA is pin-for-pin compatible with RFMD’s existing highest-volume standard products for the growing entry-level and replacement handset markets (the RF3146 family of PowerStar PA modules, which include integrated power control). It also supplements PA products launched at February’s 3GSM World Congress targeting the major growth areas in the cellular handset market (including entry-level and replacement handsets, GSM/EDGE handsets and 3G multimode handsets).

The RF3198’s improved isolation, harmonic performance and cross-band coupling reduce RF complexity and increase design flexibility related to antenna and switch selection, says RFMD. The improvements simplify calibration and increase manufacturing yields, accelerating time to market and reducing total cost of ownership, the firm claims.

RFMD also announced customer sampling of the RF3161 quad-band EDGE power amplifier module, which leverages RFMD’s large-signal polar modulation (LSPM) EDGE transceiver solutions to support merchant market EDGE transceivers that implement LSPM transmit architectures.

A high level of integration and 6mm x6mm package yield the smallest EDGE power amplifier solution in its class, RFMD claims. Limiting the number of external components and external routing during customer implementation reduces total bill of materials costs and time to market, it adds. The RF3161 also uses RFMD’s PowerStar integrated power control architecture to provide GMSK efficiencies without impacting EDGE performance.

*RFMD ships Polaris to Taiwan’s ASUS

RFMD has extended its base of transceiver customers with shipments of its Polaris Total Radio transceiver to Taiwan-based handset maker ASUS.

The Polaris -supported WCDMA/GPRS multimode handsets are based on a platform using Marvell PXA communications and applications processors and feature Bluetooth connectivity and Microsoft Windows Mobile software.

“Our shipments to ASUS add yet another handset manufacturer to the growing list of customers supported by Polaris ,” says Eric Creviston, corporate VP of RFMD's Cellular Products Group. “Our Polaris Total Radio solutions support several reference designs, and we are currently forecasting additional design wins as a result of our partnerships with base-band manufacturers.”