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Anadigics upbeat on future wireless markets

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GaAs-based broadband wireless and wireline communications component maker Anadigics Inc of Warren, NJ, USA has reported third-quarter 2009 net sales of $36.7m, a decrease of 36.8% from third-quarter 2008

Not unusually, the company showed a 16.7% increase in net sales in a second to third quarter comparison. However, these results were better than Anadigics’ expectation for the quarter of a sequential increase (third/second quarter) of just 5-10%.

The company saw an earlier-than-expected recovery in the broadband market (set-top boxes and wireless LAN). The 3G wireless market also made a good showing. Anadigics has LG, Samsung and Research In Motion (RIM) — the producer of the Blackberry communication device — as significant customers.

Net loss for the quarter was $12.9m, or $0.21 per share, as calculated according to US Generally Accepted Accounting Principles (GAAP). Removing non-recurring charges and a tax refund of $0.3m gives a net loss $6.4m, or $0.10 per share. These non-GAAP figures exclude charges for a commercial dispute settlement with a customer ($3.9m) and for stock-based compensation measures ($2.9m).

Despite the negative figures, Anadigics’ president & CEO Mario Rivas is upbeat: “Our positive third-quarter results are evidence of the successful execution on our stated business initiatives, resulting in revenue and non-GAAP loss per share exceeding our guidance. Our revenue during the quarter benefited from continued growth in our 3G wireless products as well as an earlier-than-expected recovery in both our cable TV and WLAN revenue.”

The company is moving to a hybrid production strategy involving both its fab in Warren and a recent foundry agreement with WIN Semiconductors. The Taiwan-based foundry is expected to provide expanded production capabilities for Anadigics by fourth-quarter 2010. WIN has a range of gallium arsenide (GaAs) processes, including 1-2μm heterojunction bipolar transistors (HBTs), 0.1-0.5μm pseudomorphic high-electron-mobility transistors (PHEMTs), and combinations of the two (BiFET). WIN claims that these processes can cover frequency requirements from sub-1GHz up to 100GHz.

Utilization at Anadigics’ 6-inch GaAs fab in Warren rose by 50% during the quarter, reaching 55%. Device types include InGaP HBT, GaAs MESFET, and GaAs pHEMT.

Anadigics has a large number of new products coming: power amplifiers (PAs) for wideband CDMA, HSPA and LTE cellular handsets; cable TV line amplifiers; PAs for mobile WiMAX (2.5GHz and 3.5GHz); and WiFi front-end modules and ICs for notebooks, netbooks, PCs and wireless handsets.

Anadigics believes its net sales for fourth-quarter 2009 will increase by 5-8% over the most recent results, giving a GAAP net loss per share of $0.16-0.18 and non-GAAP losses of $0.08-0.10/share. This is despite some recent negative ‘inventory adjustments’. Utilization is expected to fall as a result of a year-end two-week shutdown, negatively impacting gross margins in sequential quarter-to-quarter comparisons.

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