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Industry News

STRATEGY ANALYTICS Finds RF Component Profits Up In Q3 2006

Leveraged Buyouts Shake Up RF Industry

January 10, 2007
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RF Component Industry Review: July - September 2006, a new study from Strategy Analytics RF & Wireless Component service study, finds that nearly 60 percent of the leading suppliers of RF components reported significant profits in the third quarter of 2006, up from both the first quarter and the second quarter.

In the third quarter of 2006, the majority of RF component suppliers reported strong profits, in many cases driven by the continued strength in demand for cellphone components.  However, tech sector stock market prices failed to keep up with bottom line results, one factor that led to the leveraged buyouts of Jazz Semi, Philips Semi, and Freescale Semi. This is a worrisome trend in an industry driven by innovation. Stiil, in spite of the altered financial climate, investment in RF component start-ups remained strong, particularly in start-ups developing chips for WiMAX, mobile TV, and streaming HD video.

According to Chris Taylor, Director of the RF & Wireless Component service, “While reported profits improved overall, investor confidence and stock prices did not keep up with the S&P 500 index.  Widening investigations into stock option backdating at many RF component suppliers, among them Atmel, Broadcom and Marvell, did not help investor confidence.”

“Another trend that we see is that venture capital firms continue to shy away from early-stage start-ups in wireless components,” added Stephen Entwistle, VP of the Strategy Analytics Strategic Technologies Practice. VC firms prefer to put money into start-ups that are close to delivering production volumes of their products.”

Strategy Analytics, Inc. - a global research and consulting firm - provides timely insights and strategic business solutions to companies operating at the convergence of information, communications and entertainment technologies. With worldwide headquarters in Boston, MA, and principal offices in England, France and Germany, Strategy Analytics focuses on market opportunities and challenges in the areas of Automotive Electronics & Multimedia, Digital Consumer, Wireless Strategies and Enabling Technologies. For more information, see www.strategyanalytics.com

U.S. Contact: Christopher Taylor, 617 614 0706, ctaylor@strategyanalytics.com

European Contact: Stephen Entwistle, +44 1908 423 636, sentwistle@strategyanalytics.com

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