RF Micro Devices (RFMD) Press Release 12-17-2008
RFMD®Announces Actions to Reduce Manufacturing Costs
and Increase Cash Flow
Dec. 17 /PRNewswire-FirstCall/ --RF Micro Devices, Inc. (Nasdaq: RFMD), a global leader in the design and manufacture of high-performance
semiconductor components, today announced actions intended to streamline operations and reduce GaAs semiconductor
manufacturing costs. RFMD(R) expects the actions will begin to take effect in the
March 2009 quarter and will positively impact cash flow in RFMD's fiscal 2010, beginning
March 29, 2009.
At RFMD's Greensboro, NC
campus, all GaAs manufacturing will be transitioned to the Company's state-of-the-art 6-inch wafer
fabrication facility. The Company's 4-inch manufacturing facility will be idled and kept in a clean environment.
Prior to this decision, RFMD's 4-inch manufacturing facility accounted for less than 10% of the Company's total
GaAs manufacturing capacity. As a result, the Company anticipates significantly lower direct material costs and
higher utilization rates, resulting in lower total manufacturing costs.
In addition, in November RFMD(R) began significantly reducing its 6-inch wafer production and associated costs
in its United Kingdom
wafer fabrication facility. The Company will operate the facility on 8-hour shifts, 5 days a week, as
compared to the 24/7 environment in which the facility currently operates.
Bob Bruggeworth, President and
CEO of RFMD, said, "RFMD is taking prudent and decisive actions to match manufacturing capacity to anticipated
demand during the current recessionary environment. By reducing RFMD's manufacturing cost structure, these actions
are expected to positively impact cash flow by approximately
$15 million in fiscal 2010. Because existing facilities will be reduced or idled, RFMD will retain the
capacity and flexibility necessary to respond to increases in customer demand as the recession wanes and as the
Company's markets return to growth."
RFMD estimates approximately 250 employees, or approximately 5% of its
global workforce, will have been affected by these actions between
and March 2009.
About RFMD: RF Micro Devices, Inc. (Nasdaq GS: RFMD) is a global leader in the design and manufacture of
high-performance semiconductor components. RFMD's products enable worldwide mobility, provide enhanced
connectivity and support advanced functionality in the cellular handset, wireless infrastructure, wireless local
area network (WLAN), CATV/broadband and aerospace and defense markets. RFMD is recognized for its diverse
portfolio of semiconductor technologies and RF systems expertise and is a preferred supplier to the world's
leading mobile device, customer premises and communications equipment providers.
Headquartered in Greensboro, N.C., RFMD is an ISO 9001- and ISO 14001-certified
manufacturer with worldwide engineering, design, sales and service facilities. RFMD is traded on the NASDAQ Global
Select Market under the symbol RFMD. For more information, please visit RFMD's web site at
This press release includes "forward-looking statements" within the meaning of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited
to, statements about our plans, objectives, representations and contentions and are not historical facts and
typically are identified by use of terms such as "may," "will," "should," "could," "expect," "plan," "anticipate,"
"believe," "estimate," "predict," "potential," "continue" and similar words, although some forward-looking
statements are expressed differently. You should be aware that the forward-looking statements included herein
represent management's current judgment and expectations, but our actual results, events and performance could
differ materially from those expressed or implied by forward-looking statements. We do not intend to update any of
these forward-looking statements or publicly announce the results of any revisions to these forward-looking
statements, other than as is required under the federal securities laws. RF Micro Devices'
business is subject to numerous risks and uncertainties, including variability in quarterly operating results,
the impact of global macroeconomic and credit conditions on our business, the rate of growth and development of
wireless markets, risks associated with our planned exit from our wireless systems business, including cellular
transceivers and GPS solutions, the risk that restructuring charges may be greater than originally anticipated and
that the cost savings and other benefits from the restructuring may not be achieved, risks associated with the
operation of our wafer fabrication facilities, molecular beam epitaxy facility, assembly facility and test and
tape and reel facilities, our ability to complete acquisitions and integrate acquired companies, including the
risk that we may not realize expected synergies from our business combinations, our ability to attract and retain
skilled personnel and develop leaders, variability in production yields, our ability to reduce costs and improve
gross margins by implementing innovative technologies, our ability to bring new products to market, our ability to
adjust production capacity in a timely fashion in response to changes in demand for our products, dependence on a
limited number of customers, and dependence on third parties. These and other risks and uncertainties, which are
described in more detail in RF Micro Devices'
most recent Annual Report on Form 10-K and other reports filed with the
Securities and Exchange Commission, could cause actual results and developments to be materially
different from those expressed or implied by any of these forward-looking statements.
RF MICRO DEVICES(R)
and RFMD(R) are trademarks of RFMD, LLC. All other trade names, trademarks and registered trademarks
are the property of their respective owners.
SOURCE RF Micro Devices, Inc. 11/12/2008
Dean Priddy, CFO, 1-336-678-7975, or Doug DeLieto, VP,
Investor Relations, 1-336-678-7968, or Jerry Neal
EVP, Marketing and
Strategic Development, 1-336-678-7001, all of RFMD