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5G and IoT Supplement
I certainly thought the biggest RF industry news of the first quarter would be the acquisition of Nitronex by Macom, but that quickly faded as RFMD and TriQuint announced their merger on Monday at Mobile World Congress. The combined company will be about $2 billion in sales and a foundry/component powerhouse in our industry. According to the release, the merger will create new growth opportunities in three large global markets - mobile devices, network infrastructure and aerospace/defense - with scale advantages, innovative new products and a greatly improved operating model. It also says it will result in significant cost savings (mostly in the cost of goods sold area) of $150 million over 2 years (50% each year). They mentioned closing one fab which is also a part of the cost savings.
RFMD has leading edge technology in antenna tuning and envelop tracking in the handset module area and TriQuint has internal filter capabilities that few other companies possess, so the combined company should do well in this market. RFMD also acquired Amalfi a while back that makes CMOS handset PAs but there has been little news on that front. However, a few major CMOS players have made a big splash in the handset area recently with the Qualcomm RF360 module announced last year and the recently announced Peregrine UltraCMOS Global 1 platform which is a single chip solution. Also announced at MWC this year was RFaxis’ entry into this market with their handset PA solution, the RFX9160. This is a very competitive area but both technologies have their advantages so it will be interesting to see how it plays out.
The combination of RFMD and TriQuint also creates a leader in infrastructure and defense (with approximately $500 million in annual revenue), with a broad portfolio of products and foundry services supporting applications including radar, next generation base stations, optical communications, and the Internet of Things. I had the pleasure of getting a personal Q&A session with TriQuint's James Klein, President of infrastructure and defense products, who said that his business will benefit from RFMD’s expertise in CMOS device technology and packaging while TriQuint’s filter technology will be a big advantage for RFMD to utilize. I asked about overlap and he said there was a little but that they are mostly complementary. While CATV products and some military applications were the first to see wide adoption of GaN technology, he sees basestation infrastructure as the next area of growth that will benefit from the improved efficiency and wider bandwidth capabilities of GaN. He indicated the new brand would be developed over the next 3 to 6 months, so it will be interesting to continue to follow this big merger.
So there are two less GaN players in the industry with this consolidation. The combination of RFMD and TriQuint appears to be the biggest player by far. Other players like Cree seem to be making good progress in the high performance GaN market with Macom/Nitronex and RFHIC specializing in the low cost applications with plastic or hybrid packaging. Some of the Japanese GaN companies seem to be more active in the SATCOM market like Mitsubishi and Sumitomo but GaN in infiltrating many markets where GaAs and LDMOS have been the mainstay for many years.
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