RF Micro Devices (RFMD®) announced plans to expand its compound semiconductor manufacturing capacity to support growth expectations in the company's cellular and multi-market product groups.

RFMD anticipates increased demand for its industry-leading compound semiconductor process technologies as a result of favorable market trends in the company's primary markets. In the cellular handset market, the increasing adoption of highly integrated, multi-chip transmit modules and the migration to 3G multimode devices are expected to drive increased demand for RFMD's GaAs PHEMT and RFMD's GaAs HBT (both AlGaAs HBT and InGaP HBT).

These favorable market trends require greater quantities of compound semiconductor content and are expected to underpin a five-year compound annual growth rate of greater than 20 percent from 2007-2012 in the market for cellular front ends. RFMD was recently recognized as the leading manufacturer of cellular front ends.

Additionally, in markets served by RFMD's Multi-Market products group, it is anticipated the migration to 802.11n (GaAs HBT and GaAs PHEMT) and the increasing adoption of WiMAX (GaAs HBT and GaN) will be among the primary drivers of increased compound semiconductor content and accelerated market growth. RFMD's GaN process technology is quickly being recognized as a superior process technology for applications that require high power, linearity and bandwidth, as compared to existing technologies, such as silicon LDMOS. RFMD is the world's largest manufacturer of GaAs HBT and GaAs PHEMT, and the company is quickly ramping commercial production of its GaN process technology. Asif Anwar, director of Strategy Analytics GaAs and Compound Semiconductor Technologies (GaAs) service, said, "RFMD has consistently been the world's largest supplier of GaAs devices for several years as a result of its leadership in the cellular handset PA space.

The company continues to move in line with the requirements of the cellular handset market, and this will continue to drive the volume at RFMD. RFMD has also developed a coherent multiple market strategy to target higher value segments with the rollout of its GaN and GaAs PHEMT technologies as well as the expansion of its IP and product portfolios through the proposed Sirenza acquisition. This dual 'high volume-high value' strategy will help the company remain at the forefront of the compound semiconductor industry."

Bob Bruggeworth, president and CEO of RFMD, said, "The markets served by RFMD are growing, and RFMD is growing its compound semiconductor content within these markets. The addition of our third fab will enable us to capture a greater percentage of this growth while also reducing manufacturing costs and driving continued improvement in operating profitability.

Once complete, our third fab, in conjunction with our second fab, will focus on high volume cellular and WLAN front end products that utilize GaAs HBT and GaAs PHEMT. The new fab will also provide capacity for the production of wafer-level packaged SAW filters and the development of new, next-generation process technologies that provide highly integrated front end functionality. Our first fab will focus on high value multi-market products that utilize specialty GaN, GaAs PHEMT and GaAs HBT technologies."