Some things to think about. RFMD is capacity constrain, the company planes to triple capacity (the reason for the second offering). Beyond FY00 the company will probably start to offer new products based on licensed SiGe technology from IBM.
So what's with SiGe? I'll tell you. GaAs is a great material with it's higher electron mobility. With HBT on GaAs you get great power amplifiers, frequency converters, and control components (switches). However the material has poor thermal properties which prevent large scale integration. With SiGe, RFMD can start looking at integration of RF/Analog with the digital coding and demodulation. Imagine a wireless phone with only THREE chips! The Dick Tracy wristwatch phone is coming, thanks to RFMD.
As far as competitors, they include ANAD, Triquint, Alpha, Conexant (formaly Rockwell Semiconductor). IMO ANAD is dead, Triquint has obsolete technology, and Alpha is a poorly managed company. The Japanese were never big on GaAs, since it was 10x cost of Si so their behind. Conexant is actually larger than RFMD and could be a real power in GaAs telcom market, so RFMD needs to grab market share which I believe they're doing.
I think profit taking is justifiable, but going short could be dangerous.
Regards,
Neal |
