RFMD Conference Call notes – Dean Norberry
- Anoounced Plans To Manufacture Indium Phosphide, A Next-Generation Semiconductor Process Technology – feels superior to any SiGe process
- CDMA module was qualified by QCOM and started shipping
- Feel module sales was increase as a percentage of sales in the future
- Test facility in NC will increase test rate by factor of Five
- Quarterly Sales 102.2M, up 4.1% sequentially q2q, and up 48.3% y2y, 68.9M year ago
- HBT/SI was 92% of rev, handsets 90% of rev, 60% internationally?
- 16% CDMA, 37% TDMA, 16% GSM, (doesn’t sound right for CDMA)
- 7% Korea of rev
- Gross Margin 50.8% vs 51.5% last quarter, up 2.6% q2q
- 14.4% is R&D, 3.3% in G&A
- Cash 324M in cash. From 291M in debt offering.
- 61.2M inventory vs 50.9M last q, increase in component parts
- Dave
- Order shortfall in sept quarter were disappointing
- 4-5cents for next quarter
- don’t think it is a trend. Need to see suppliers work off exceess inventory. Next quarter in March will return to sequential growth.
- We can surpass what InGap (Indium Gallium) can do by going with Indium Phosphide,
- Integrated modules is the wave of the future. Feel going to pay off big time.
- Convinced market going to take off in six month with next generation phones
- Continue penetration of key customer. Very strong in TDMA, CDMA, and GSM.
- MOT potential is good in GSM
- Siemens is a good developing GSM customer
- QCOM module should benefit from China Unicom announcement.
- This quarter is the bottom.
- We expect to continue to gain market share.
Q&A
– Indium Phosphide – PCS market is target and module technology which will be centered around PAs
- Bluetooth have RFMD PAs for 100mW products. Will be a silicon device.
- Delays were orders pushouts from ERICY, also from two other customers due to slippages and tech problems. Sagem (France) is seeing softness of orders due to inventory. June was 10% of rev and fell off significantly in Sep quarter.
- Think rebound in handset will be March quarter. We know that RFMD is designed in several customer products.
- Customers have announced that inventory of handset is the problem vs. RFMD components backed up.
- Korea should be flat next couple quarters. Had two Korean customers come in with expedited delivery requests but not big orders. Quite a bit of interest in our SiGE products.
- ASPs declines 10-12%. We intend to be competitive in the area.
- Market share is strong with in NOK in the CDMA/TDMA.
- Disappointed on slow rampup with MOT
- Shipping in CDMA ERICY phone so will increase in this market share.
- We were late getting one of our products out – not specific
- NOK was same rev%, MOT did increase rev some, ERICY did increase some rev also.
- Most order push outs were for the upcoming Dec quarter
- 410M –425 handsets this year, and 500-560M next year.
- Feel 48% increase in FY2002 revs from FY2001
- Gross Margins for December should pull back some as modules products ramp up.
- Expenses will not be lower due to Indium Phosphate expenditure. Only feel this a one quarter blip.
- Fab plant 70K wafers/year. New plant is not being expedited as fast due to order pushout.
- Product that was late was a complicated module. Feels revs coming from it in March quarter.
- Didn’t see a surge in demand from NOK price cuts. Those were GSM phones and we are not big with NOK in this area
- Siemens revs will show in December and ramp nest two quarters after this.
- Feel we have small inventory risks. Small NOK inventory that will be taken down next two quarters.
- Wireless e-mail and small/lighter weight phones will drive phone sales. A lot of the new phones will be smaller
- QCOM modules shipped so be this quarter. SiGE ramping up with IBM for fab. Seeing a lot of interest and trying to meet demand.
- Indium Phosphate will be done in new fab plant and will be 4 inch.
- Sequentially revs Dec-Mar should be up double digits perhaps 15-20% but dependent on phones selling
- Order pushouts was mainly GSM or its derivative, some TDMAs
- Late module shipment impacted only one customer
- Modules are easier for handsets mfrs to work with. A lot less tuning and tweaking to be done. As modules incorporate PA and receiver front end, they are less interchangeable between suppliers.
- Up 10M in inventory. Mostly raw material was the increase. Mostly components for modules.
- NOK outlook is positive for March quarter and also QCOM in March.
- Upcoming quarter is 20% less revenue. Probably a user of cash next quarter also.
- CAPEX for CY2001 – completing new wafer facility.
- NOK says they will continue to gain market share. We are diversified with other customers who would gain market share too.
- Wireless Lan is still late development stage. Bluetooth will be a handset play initially and then go into notebooks later.
- No design wins in Bluetooth since still working with customers on products
- CAPEX 22-23M and depreciation 6.6M was for this quarter
- 27M in total operating expenses this upcoming quarter
Jack |
