TriQuint brings GaAs to the masses
For years, GaAs was touted as the ”next big technology’’ that would eventually replace silicon. GaAs never realized those promises and TriQuint plodded along, selling into niche wireless applications.
But more recently, TriQuint has been on a roll on several fronts. The company’s power amplifiers, modules and related RF devices have been incorporated into various and hot mobile devices from Apple, HTC, Motorola, RIM, Samsung, among others. In many of those designs, TriQuint sells an RF module that integrates a duplexer, power amplifier and a filter.
And this week, TriQuint cut the ribbon for a new design center in San Jose, which will propel its ongoing efforts in its growing networking business. The center involves employees within WJ Communications Inc., a company that was acquired by TriQuint in 2008.
The design and test engineering center, which has 90 employees, develops network infrastructure products, such base stations chips, CATV ICs, small signal devices and others. It is also developing products for the company’s eventual entry or expansion into the RFID and smart grid segments.
The company is also expanding its fab capacity, which is supply constrained, according to analysts. And it appears that TriQuint will resume its aggressive acquisition efforts.
With little or no fanfare, TriQuint has moved beyond being a mere GaAs house. ”In essence, we were once a GaAs foundry,’’ said Brian Balut, vice president of networks at the company’s design center here this week. ”Now, we’re a RF solutions house.’’
The company’s fortunes jumped three to four years ago, when it obtained an RF design win for Apple Inc.’s iPhone, said analyst Todd Koffman, who follows TriQuint for Raymond James & Associates Inc. Design wins for Apple’s iPhone and iPad, and more recently, mobile phone maker HTC, ”have really catapulted them,’’ Koffman said. It also catapulted them as the ”second largest RF company, behind Skyworks.’’
TriQuint’s sales have more than doubled, from $401.79 million in 2006 to $878.7 in 2010. This year, the company’s sales are projected to hit $1.03 billion, according to Zacks.
TriQuint faces several challenges, namely to continue to win sockets in the mobile space. Competition remains fierce in the RF chip market against the likes of Anadigics, RF Micro Devices and Skyworks. And it competes against various players in the network transport arena.
”The biggest issue is that (TriQuint has) run out of manufacturing capacity,’’ Koffman said, adding that TriQuint is expected to expand its fab capacity by roughly 30 percent by year’s end.
Not long ago, it was hard to envision the success at the device maker. Following its formation in 1985, GaAs pioneers Gazelle Microcircuits, Gigabit Logic, and TriQuint merge under the TriQuint Semiconductor name in 1991.
Over the years, TriQuint continued to expand its portfolio via acquisition. In 1998, it acquired Texas Instruments’ GaAs MMIC business and Raytheon TI’s Defense Systems and Electronics Group. In 2001, TriQuint bought Sawtek Inc., a surface acoustic wave (SAW) provider.
In 2002, TriQuint signed an agreement with Philips Semiconductors, guaranteeing controlled access to TriQuint’s indium-gallium-phosphide (InGaP) and heterojunction bipolar transistor (HBT) 150-mm wafer processing facilities. A year later, it acquired Infineon’s GaAs business.
The company seemed to turn the corner in 2002, when it hired Ralph Quinsey, a executive from On Semiconductor, as its president and CEO. The company continued on the acquisition spree in 2005, when it bought TFR Technologies, adding bulk acoustic wave (BAW) expertise to the corporation’s technology arsenal.
TriQuint stumbled in 2005, when it sold the assets of its unprofitable optoelectronics operation to CyOptics, an optical components manufacturer. Meanwhile, TriQuint acquired Peak Devices in 2007, bought WJ in 2008, and snapped up TriAccess in 2009.
Today, TriQuint offers products in three segments: mobile, networks and defense. It also provides a GaAs and GaN foundry service. In February of 2011, TriQuint said revenue for the fourth quarter was $253.4 million, up 7 percent from previous quarter and up 31 percent from the like period a year ago. Net income for the fourth quarter of 2010 was $42.5 million, down 62 percent from the previous quarter but up 143 percent from the like period a year ago.
Revenue for 2010 was $878.7 million, up 34 percent from 2009. Net income for 2010 was $190.8 million, up 1,078 percent over 2009.
The company believes first quarter revenue for 2011 will be between $215 million and $225 million. At the midpoint, this implies revenue growth of 22 percent over the first quarter of 2010. For the full year, the company believes continued robust growth in demand should lead to revenue growth of about 20 percent.
Revenues from mobile device products accounted for approximately 66 percent of it total revenues in 2010, compared to 67 percent of revenues in 2009 and 63 percent of revenues in 2008.
For years, the company has been mostly known for its ”power amplifiers and front-end modules,’’ Koffman said. In the mobile space, it sells transmit modules, RF filters, power amplifiers and power amplifier modules and duplexers.
GaAs never replaced silicon, but it found a home in power amps despite competitive threats from silicon germanium and silicon. ”GaAs material and device design can provide key performance advantages over silicon, such as higher frequency operation, improved signal reception and transmission, better signal processing in congested bands and greater power efficiency for longer battery life, all important attributes of the mobile phone experience,’’ according to the company’s annual report.
TriQuint has RF silicon in many of the hot mobile devices today-with the exception of Apple’s iPhone sold by Verizon, he said. Besides that phone, TriQuint is ”sitting pretty’’ in the mobile space, he said.
Needless to say, the cell-phone power amp business is competitive. The volumes are huge, but the margins are smaller and average selling prices (ASPs) tend to fall.
As a result, TriQuint is expanding its network infrastructure device business. Revenues from networks products accounted for approximately 24 percent of its total revenues in 2010, compared to 21 percent in 2009 and 26 percent in 2008.
TriQuint’s networking chip business is ”doing well,’’ because the market is in the midst of a major upgrade cycle in LTE and infrastructure, Koffman said.
Products like bay stations and other equipment have longer life cycles, said Balut, who oversees the network side of the house. In 2011, TriQuint sees a mixed picture. In the beginning of the year, there was some ”softness’’ in wireless, namely in India, he said.
In the networking infrastructure space, TriQuint is seeing demand in three areas: 40-/100-G; 3G to 4G wireless networks; and fiber to the home. ”Optical is our biggest driver,’’ he said.
Last year, TriQuint began high-volume production for optical network manufacturers of new driver amplifiers, including the market’s first surface-mount technology (SMT) 40- and 100-Gb/s (gigabits per second) devices. TriQuint’s TGA4943-SL driver operates using half the power of other devices: just 1.7 Watts. The TGA4943-SL is also available in an adaptive module for compatibility with legacy systems. Another new device, the TGA4826-SM, was selected as a key component of the fiber system that powers Europe’s first 100 Gb/s link, which entered service in late 2009.
The acquisition of TriAccess Technologies Inc. enabled the company to increase its participation in the growing CATV and FTTH markets. TriQuint is now positioned to offer signal amplification and filtering products for the entire network, including headend, infrastructure, and home.
The company is also a major player in the foundry business. Last year, TriQuint released its latest 150-mm GaAs commercial foundry process, TQP15. TQP15 is targeted at the Ka-band segment and is designed for building millimeter wave (mmWave) MMICs for applications such as VSAT, satellite communications and point to point radios.
In 2008, TriQuint offered a GaN foundry service. Last year, TriQuint was awarded a Defense Production Act Title III gallium nitride (GaN) manufacturing development contract by the U.S. Air Force Research Laboratory (AFRL). The overall goal of the contract is to increase yield, lower costs and improve time-to-market cycles for defense and commercial GaN integrated circuits. TriQuint is the prime contractor and all the work is to be performed at its Richardson, Texas facility.