Skyworks Solutions Inc., an innovator of high performance analog and mixed signal semiconductors enabling mobile connectivity, announced that given heightened demand for its products from tier-one handset OEMs and a diverse set of analog customers, it is expanding its manufacturing capacity.

Skyworks has already commenced the conversion of its internal gallium arsenide heterojunction bipolar transistor (HBT) fabrication facility in Newbury Park, CA, from 4 to 6 inch wafers. The company is also complementing its internal manufacturing capabilities by expanding partnerships with several leading Taiwanese foundries. This hybrid expansion model requires no additional 'bricks and mortar,' will cost substantially less than building a new stand-alone facility, and allows Skyworks to meet surge demand with a high degree of flexibility.

These steps are designed to expand upon Skyworks' best-in-class compound semiconductor gross margins while maximizing its return on invested capital.

The demand for Skyworks' products is being fueled by new customers and the growing need for 3G multimode front-end architectures in handsets. In fact, third generation (3G) cellular phones, which contain increasingly complex transmit modules and provide an incremental market opportunity measured in the billions of dollars annually, are expected to represent the majority of the more than 1.2 billion mobile phones the industry will ship in 2009 as consumers move to more feature-rich, multi-band devices.

"With continued strong mobile phone growth forecasted for the foreseeable future, increasing GaAs content per handset and traction within our Linear Products portfolio, we are implementing a hybrid capacity expansion model to maximize our internal capabilities while at the same time leveraging external partnerships," said Bruce Freyman, vice president of worldwide operations at Skyworks. "While we will continue to invest internally, our balanced approach is less capital intensive and more flexible, allowing us to meet customer demand without compromising gross margin or other key operating metrics. These initiatives position Skyworks to support well over $1 B in annual compound semiconductor revenue."

Skyworks is collaborating with several foundries in Taiwan to complement its Newbury Park, CA facility that develops GaAs HBT power amplifiers, and its Woburn, MA fab that produces PHEMT switches. Skyworks has exported "copy exact" processes of mature GaAs technology to these foundries, in addition to leveraging their capabilities for specialty processes.