Filtronic Plc has concluded a 13m pound ($20.8m) cash acquisition of Fujitsu’s semiconductor facility in the northeast of England, and negotiated a 5m pound ($8m) government grant to establish a 6 inch gallium arsenide semiconductor (GaAs) production operation at the plant. At the same time, the Shipley, UK-based company announced plans to raise 71.2m pounds ($113.9m) through a rights issue for an expansion of its worldwide operations.
Filtronic, a producer of microwave products for cellular and cable telecommunications and electronic warfare, also plans to spend 10m pounds ($16m) to upgrade its solid state facility in Santa Clara, California to 4 inch gallium arsenide production. In addition, it will invest a further 10m pounds ($16m) to relocate and expand its ceramic filter production facility in Finland.
At Fujitsu’s former plant at Newton Aycliffe, Filtronic plans to invest 22m pounds ($35.2m) on top of the purchase price over the next five years to establish what it claims will be the world’s first and largest GaAs facility for wireless applications. Filtronic is backing GaAs technology because it says it offers up to 60% efficiency in power amplifier operation and improved receiver sensitivity over silicon-based circuits for GSM transmission standards.
Filtronic estimates that the Newton Aycliffe plant is capable of producing 350 million GaAs devices a year when operating at full capacity, representing 50% of current global requirements for handset sales and 25% of those forecast for 2003.
The company’s confidence that it can profit from the growth in the market follows its development earlier this year of an integrated RF front-end module for cellular mobile handsets that replaces 24 separate components. Filtronic claims it is capable of being applied to every significant transmission standard and modulation system including GSM, CDMA and TDMA.
Filtronic chairman professor David Rhodes said the board believes that the commercial potential of the integrated RF module is extremely promising with sales of mobile handsets forecast to grow from 175 million this year to 375 million by 2003.
