Q: Is there a particular emerging application or technology that especially intrigues you?
A: In the mobile devices space, the LTE build-out is expanding RF band counts in handsets dramatically, driving increased demand for broadband PAs and high-performance filters. The average number of bands in a smartphone has more than doubled in the last few years and will double again over the next two years. This is creating a strong push toward integrated modules that combine premium filters with highly-efficient broadband amplifiers to reduce RF size and complexity in a smartphone. Looking forward we see the filter complexity issue forcing more integration away from discrete solutions. While integration is not new, to date it has been along the traditional lines of filter or amplifier suppliers. TriQuint uses dense packaging technologies — like copper flip interconnect and wafer level packaging (WLP) to combine high performance broadband amplifiers with premium filters in a simplified integrated solution. This is a significant change for our industry.
Another technology of note is GaN. Gallium nitride (GaN) remains at the forefront of evolving product innovation thanks to its exceptional power handling, wideband performance, efficiency and ruggedness. GaN has moved beyond defense applications into infrastructure and will see increasingly widespread adoption.
Q: If you are selling into the defense market, are you experiencing any effects of the reduction in defense spending or are you anticipating any impact on your business?
A: Despite the U.S. government shutdown and persistent defense spending concerns, we continue to benefit from long standing, well-funded programs. Examples of these programs include the Joint Strike Fighter, TPQ-53 and radar upgrade programs targeting the large domestic and international fleets of F16s and F/A18s. Defense and aerospace revenue has actually been quite strong for the past couple of years. We experienced mid-teens percentage growth in both 2012 and 2013. This growth has been driven by major program timing and a significant increase in the rate of new products being released. Our product revenue is up 28% in Q3 2013 as compared to Q3 2012.
Q: Deployment of small cells and distributed antenna systems is increasing rapidly as wireless carriers attempt to provide “broadband wireless data everywhere.” If your company is involved in any portion of the “HetNet” market from components through systems, please give us your thoughts on the opportunities it presents or tell us how you feel this market will develop.
A: Small Cell base stations will play a key role in heterogeneous networks (HetNet’s) as systems expand coverage to where it’s most needed. Network operators know that Small Cells can deliver the bandwidth and data transport requirements consumers and businesses demand. We recently announced our first Small Cell base station amplifier that integrates many functions into a single package, half the size of discrete solutions. This will enable manufacturers to substantially reduce transceiver size and power requirements while reducing thermal mitigation. Our Small Cell family will continue to expand to serve the world’s most popular frequency bands.
Q: China has long been considered the greatest potential global market for many companies in the RF and microwave industry. Do you feel this is still true? Are there other emerging markets that you believe will be lucrative in the next few years?
A: Yes, we feel China provides an incredible opportunity for RF suppliers, thanks to the upcoming deployment of 4G. Our revenue into the base station market is up substantially, primarily because of early support for China’s TD-LTE build-out. More than 200 thousand LTE base stations are expected to be deployed. China is a large smartphone market with over 1 billion subscribers. We see opportunity for our BAW technology to solve the unique challenges of crowded spectrum in China. In addition to base station and filter opportunities in China, TriQuint is getting pulled into discussions with network providers who understand the benefits of carrier aggregation. They’re asking us to deliver more integrated modules in order to replace the multiplication of discrete products brought about by the growing number of bands in a phone. As I mentioned earlier, while not a new market, we do see a significant demand emerging for new combinations of integrated solutions. Beyond mobile devices in China, we also see opportunity for our CATV and optical infrastructure products.
Q: What do you believe will be the greatest challenge for the RF and microwave industry in the next few years?
A: Every product generation challenges us to improve performance. The challenge could be extending battery lifetimes, expanding into new spectrum or solving interference problems created by new and crowded band combinations. For high capacity optical networks, the challenge is besting our own performance and expanding our broad portfolio of SMT products. In most cases our markets are driving tighter integration of the complete RF solution. In every case, we’re focused on increasing performance and reducing size, and furthering our commitment to innovation by delivering real customer value.