67 WALL STREET, New York - June 8, 2012 - The Wall Street Transcript has just published its Semiconductors Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Improvement from Cyclical Bottom - Semiconductor Capital Equipment Spending - New Computing Platform Demand - Chip Manufacturing Technology
Companies include: Apple's (AAPL); Brooks Automation (BRKS); Fairchild Semiconductor (FCS); ARM (ARMH); ASML (ASML); and many more.
In the following brief excerpt from the Semiconductors Report, expert analysts discuss the outlook for the sector and for investors.
Ralph Quinsey joined TriQuint Semiconductor, Inc., in July 2002 as President and Chief Executive Officer. From September 1999 to January 2002, he was with ON Semiconductor Corp., a manufacturer of semiconductors for an array of applications, as Vice President and General Manager of the analog division. Before that, Mr. Quinsey was with Motorola, a manufacturer of semiconductors and communications equipment, from 1979 to September 1999, holding various positions including Vice President and General Manager of the RF/IF circuits division, which developed silicon and gallium arsenide technologies for wireless phone applications. In January 2011, Volterra Semiconductor Corporation, a provider of high-performance analog and mixed-signal power management semiconductors, appointed Mr. Quinsey to its board of directors. He received a B.S. in electrical engineering from Marquette University.
TWST: Please start with what's gone on over the past year that investors should focus on.
Mr. Quinsey: We just completed our sixth consecutive year of revenue growth. Between the years of 2005 and 2011, our compound annual growth rate was about 17%, led by revenue from the mobile devices market at an impressive 25%. In 2010, we had an outstanding year, growing at 34%. But we were early to catch the smartphone wave, so we reached our capacity limits - 2011 turned into an investment year. We added 40% more capacity. While this creates some near-term margin headwinds, it positions us well for future growth.
TWST: What is the share repurchase program TriQuint has in place right now?
Mr. Quinsey: We put a $50 million share repurchase program in place because we believe we are a good investment, and to send a signal to our investors that we've got a healthy balance sheet and a strong outlook for the future.
TWST: Would you explain TriQuint's technology briefly in layman's terms?
Mr. Quinsey: TriQuint has built a foundation of knowledge and expertise over more than 25 years of helping our clients solve their toughest RF challenges. We develop and supply innovative radio frequency, RF, solutions for the communications and defense markets. Some applications we serve include smartphones, Internet and communications equipment of all kinds, and phased array radar for defense applications. The company's mission is to improve the performance and lower the cost of our customer's applications. And we are known for our broad technology portfolio, including high-performance GaAs and GaN technologies, as well as technologies for high-performance filters. What we pride ourselves in and what sets us apart is the fact that we are an innovator and an integration leader. We've been recognized as the technology leader in high-performance GaAs, outpacing our competition in markets like radar, high-speed optical drivers, high-performance Wi-Fi and millimeter wave power amplifiers. Additionally, we were one of the few companies early on to see the value of filtering technology in our solutions, and have invested in BAW, SAW and wafer-level packaging. In short, customers come to TriQuint to solve their hardest RF problems.
TWST: Last October, TriQuint has named one of Fortune magazine's 100 fastest-growing companies. Please tell us about that.
Mr. Quinsey: We were proud to accept that recognition. Our growth has been driven by our ability to take advantage of a very strong market. We participate in a $7 billion market, and it's growing at about 10% to 15% annually. About 70% of our market is in mobile devices driven by the proliferation of smartphones, and increasing RF content - as initially 3G, and increasingly, LTE, or 4G, become mainstream. If you look at a typical voice phone transition to an Internet phone, it drives seven to 10 times the amount of RF content. Crowded spectrum is also good for us since it drives increased demand for high-value filters, which allow multiple radios, whether it be Wi-Fi or cellular, to work in the same handset.
The other 30% of our market is communications infrastructure and defense-related products. These two markets are very performance driven. One level down, important submarkets include airborne radar, base station, optical and millimeter wave. So in summary, we have a healthy, growing market, and we have the technology and know-how to solve tough RF problems for our customers. RF complexity is increasing, which is good for our business. Sustained growth will come from content expansion in smartphones, and upgrades and expansions in network equipment to support increasing data traffic and additional bandwidth for consumers.
TWST: Would you comment on the new DARPA contract for ultrafast power switch technology?
Mr. Quinsey: Yes, that is a component in our wider program of investment for next-generation materials. In 2011, we attracted approximately $15 million in advanced technology funding from DARPA, Air Force Research Labs, Office of Naval Research and some of our industry partners. Most of our funding, including the contract you mentioned, is directed to materials development around gallium nitride, or GaN. GaN is the next-generation material set for high-power, high-linearity broadband applications. And I expect that our funding should pick up to about $20 million in 2012.
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