Interestin interview
RF Micro Devices- CEO, CNNfn
[CNN/fn Transcripts ú Rcvd: Feb 29, 10:02 AM EST ]
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, CNNfn ANCHOR, BEFORE HOURS: Joining us this morning from New Orleans, Louisiana to tell us more about his company is the CEO David Norbury. Mr. Norbury, nice to have you with us.
DAVID A. NORBURY, CEO, RF MICRO DEVICES: Good morning, Jack. Glad to be here.
CAFFERTY: What you can tell us about the [09:15:10] Qualcomm thing? The street loved it. Why should they? [09:15:20] [09:15:30] NORBURY: Well, it`s a huge opportunity for us. We`re pretty excited. Qualcomm has been selling a chip set that allows their licensees to build CDMA phones. And the one part that they [09:15:40] have not had under their own control is a power amplifier. And that`s one of the main things our company does and the alliance that we announce yesterday [09:15:50] will have us supplying the power amp for their chip sets. And they sell a lot of the. So, it`s pretty good news for us.
CAFFERTY: Particularly overseas where they are setting the [09:16:00] standard in the wireless form of communication, are they not? [09:16:10] [09:16:20] NORBURY: Absolutely. Today, they are the clear market leader in CDMA. And as we go forward in to the next generation standards, which they [09:16:30] call 3G, those will be based on CDMA technology also. So, they`ve got a huge upside.
CAFFERTY: What is the advantage of putting the amplifier onto a chip as opposed to having it [09:16:40] in the headsets? [09:16:50] [09:17:00] NORBURY: The chip we`re talking about will always be in the handset, has been in the handset, but what we did in this case is work closely with [09:17:10] Qualcomm to come up with a highly optimized power amplifier that work very, very well with their chip set. So, the whole system works better now with this power amplifier.
CAFFERTY: Can you [09:17:20] give us a some sense of the potential of this deal for the bottom line for your company? Can you quantify it a little bit looking forward?
NORBURY: Well, have to [09:17:30] rely a little bit on Qualcomm`s forecast. Actually, significant revenue for us will start to occur later this year and be quite large next year. They currently ship tens of millions [09:17:40] of these chip sets per year. So assuming that your power amplifier goes with along every one of these, it could be quite substantial.
CAFFERTY: Indeed, it could. Is this what they call a [09:17:50] joint venture on the part of your two company, Mr. Norbury? [09:18:00] [09:18:10] NORBURY: Not a formal one, no. It`s what we are calling an alliance. It`s a very close developmental relationship. But not in the legal sense.
CAFFERTY: Is it similar or [09:18:20] different from the arrangements you have other companies for example like Nokia or?
NORBURY: The arrangement with Nokia has a lot of similarities. We work very, very closely with those guys and work out [09:18:30] several generation of phones so that we`re prepared to supply you know for those next generation phones. So, there`s Some similarities there.
CAFFERTY: Does this Qualcomm deal put any sort of strain on [09:18:40] your capacity to produce at all? Are you going to have to expand your operation in order to meet the requirements of this?
NORBURY: Well, I think that`s one of the thing [09:18:50] that attracted Qualcomm to us. We opened a fabrication facility for these products a year and a half ago. We`re still not at full capacity on that facility. And this summer we broke [09:19:00] ground on a much larger facility that will come on later this year. So, we`re told from our customers that we`re one of the very few suppliers of [09:19:10] these kind of component right now with excess capacity at all.
CAFFERTY: With excess capacity, are you in the new market do some more deals perhaps?
NORBURY: You bet!
CAFFERTY: Want to tell us with whom?
NORBURY: Nom because [09:19:20] then I would have to kill someone.
CAFFERTY: Probably me. What`s that old line, if I tell you, I have to kill you.
NORBURY: That`s right.
CAFFERTY: But you are expanding your capacity and as a result you are in the market [09:19:30] to do some more deals down the road.
NORBURY: Absolutely.
CAFFERTY: Give me a sense of our outlook for the next 12 months or so for your company and what shareholders should [09:19:40] be looking at and for when it comes to RF Micro Devices [Company: RF Micro Devices Inc.; Ticker: RFMD; URL: rfmd.com].
NORBURY: About the only thing we`ve said publicly is that the growth rate that RFMD will have going into the [09:19:50] next 12 months is substantially higher than it has been for the last 12 months and that has not been too bad either. So, we`re pretty excited. We`ve got all capacity things [09:20:00] we think put in place. We pretty much placed our bets years a year and a half ago and they`re playing out quite well.
CAFFERTY: 60 percent of sales coming from [09:20:10] outside of the US, is that a fairly accurate number?
NORBURY: Depends on how you classify some of the customer facilities. But, yes, at least half come from outside of the US. [09:20:20] [09:20:30] CAFFERTY: What does that [09:20:40] mean in terms of the potential in the domestic versus the potential for continued growth overseas? Are you not exploiting the domestic market to the degree that you [09:20:50] might be able to? Or is the potential for the overseas growth simply outstripping that which is available here? [09:21:00] [09:21:10] NORBURY: For us, the overseas markets have grown faster and were bigger. We`re very big [09:21:20] in the TDMA here in the US. We`re not a large player or have not been up until now in the CDMA market for power amplifiers certainly domestically, but we expect [09:21:30] that to change rather dramatically over the next year.
CAFFERTY: Sounds like it is firing on all cylinders. A pleasure to have you.
NORBURY: Thank you.
CAFFERTY: David Norbury, CEO of RF Micro Devices from New Orleans.
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