News Update Markets & Business RFMD Cree announces record sales for LEDs jazzes up Cree, Inc. reported revenue of quarter of fiscal 2002. Net ability to exceed both our $48,811,000 for the first quar- income for the comparable revenue target and consensus silicon ter of fiscal 2003, which repre- year ago period was earnings estimates.We have sents a 29 percent increase, $6,460,000, or $0.09 per share. continued to experience capabilities sequentially, over the compa- LED shipments increased more increased demand for our LED ny's fourth quarter fiscal 2002 than 50 percent, sequentially, to products fueled by new design revenue of $37,800,000 and a record levels and average sales wins in a number of applica- RF Micro Devices, Inc.(RFMD) 13% increase over the compara- prices increased slightly over tions including cell phones. and Jazz Semiconductor, a pri- ble year ago period revenue of the fourth quarter of fiscal Our challenge has shifted to vately held, high-performance $43,166,000. Net income for 2002. managing our capacity expan- RF and mixed-signal silicon the first quarter was sion to fulfill increased cus- wafer foundry, today announced $3,883,000, or $0.05 per share, Chuck Swoboda, President and tomer demand requirements they have agreed to enter compared to a GAAP loss of Chief Executive Officer of Cree and we are targeting LED sales into a strategic relationship for $22,521,000, or $0.31 per stated, "We are extremely to be above record levels set in silicon manufacturing and share, reported for the fourth pleased with our results and the first quarter." development. Under the arrangement, RF Micro Devices will obtain a guaranteed, lower cost source of supply for wafers fabricated Triquint to buy Agere's utilizing Jazz Semiconductor's manufacturing processes, including silicon germanium opto business (SiGe), bipolar complementary metal oxide semiconductor TriQuint Semiconductor, Inc. buyer for all or parts of this fit for TriQuint as we have (BiCMOS) and RF CMOS. In will acquire a substantial por- business, and exiting the opto- bccn involved in the design addition, RFMD will collaborate tion ofAgere's optoelectronics electronics business as part of and production of integrated with Jazz on the development business for $40 million in its corporate restructuring. circuits and products for of wireless technology cash.The transaction includes TriQuint estimates this busi- the optical networking busi- roadmaps, including joint the products, technology and ness will have revenue some- ness for over 15 years, and process development and the some facilities related to where between $50 and it is a core part of our optimization of these processes Agere's optoelectronics busi- $75 million for calendar year company. for fabrication of next-genera- ness, which includes lasers, 2003 and is projecting that it "This acquisition makes us one tion silicon RFICs.The arrange- detectors, modulators, passive will be accretive to earnings of the world's leading suppli- ment is expected to help components, arrayed wave- per share by the fourth quarter ers of optical modules and RFMD develop proprietary guide-based components, of 2003. components.The consolidation mixed-mode silicon technolo- amplifiers, transmitters, As part of the transaction, of the operations and the gies for its system-on-chip receivers, transceivers, approximately 300 Agere restructured workforce will (SOC) integration roadmap. transponders, and MEMS research and development, greatly reduce our costs (micro electro-mechanical The two companies also process engineering, market- compared to Agere's previous systems). announced that RFMD has ing, product management experience. agreed to invest $60 million in The transaction does not and assembly and test Through a transitional Jazz for a minority equity posi- include Agere's business provid- employees will join TriQuint. manufacturing agreement, tion in the company. Jerry Neal, ing optoelectronics compo- The companies anticipate Agere will supply components executive vice president of nents for CATV (cable televi- closing the transaction in for TriQuint for a short period strategic development and co- sion) transmission systems, January 2003, subject to following the transaction founder of RF Micro Devices, based in Alhambra and regulatory approval and closing Agere currently will join the board of directors lrwindale, CA.Agere is continu- other customary closing manufactures the majority of of Jazz Semiconductor. Closing ing to pursue a buyer for that conditions. these components at its of these transactions is subject business. Commenting on the transac- Breinigsville, Pa., facility which to customary conditions. ForAgere's fiscal year ended tion, Ralph G. Quinsey, TriQuint will acquire following Jazz is a leader in advanced September 30, 2002, the busi- President and CEO of TriQuint the transition period.TriQuint SiGe BiCMOS and RF CMOS ness TriQuint is acquiring had stated, iI am delighted that we will also acquire the back-end manufacturing processes with revenue of approximately $192 have been able to reach agree- assembly and test operations at substantial, state-of-the-art sili- million.Agere announced in ment with Agere to acquire Agere's Matamoros, Mexico con foundry resources. August 2002 it was seeking a this business. It's a natural facility. lll-Vs REVIEW :~ >,/,; LE VOL t5 - NO 9 - NOV/DEC aoo2 News Update Markets & Business Picogiga turns to Umicore as it fights for survival Picogiga's core business is initiated by Picogiga on its con- sufficient level of equity and as well as to develop down- growing epitaxial layers on vertible bonds (issued in 2001) enough cash to meet its R&D stream opportunities such as compound semiconductor sub- achieving a minimum success and operating commitments. epitaxy, for applications in the trates - mainly GaAs wafers - rate of 80%, allowing a signifi- However, should the plan fail electronics and optoelectronics using MBE technology.The cant strengthening of the corn- by not obtaining the required industries. paw's balance sheet. One 80% of threshold, this would company has had a leading According to Umicore, the bond would be exchanged for prevent the capital increase by position in the epi-wafer mar- company's intention is to take 8 new shares. Umicore from taking place. ket but has seen sales fall advantage of the current weak- sharply from g20 million in After completion of this According to Umicore, Picogiga ness of the semiconductor 2000 to Cll.5 million in 2001. restructuring, Umicore would offers a sound fit with Umicore market to build a growing hold between 40 and 47% of Advanced Materials' strategy. In With third quarter turnover position in anticipation of a the outstanding shares of addition to extending the use unlikely to exceed C 1 million, future market recovery. In this Picogiga (for an investment of of germanium to other applica the management of Picogiga context, several initiatives in {5.5 million) and three out of tions than space solar cells, has deemed it necessary to semiconductor wafers are cur- six seats on the Board of Umicore's stated strategy is to seek a short-term re-capitaliza- rently being pursued within Directors. broaden its expertise in sub- Umicore Advanced Materials' tion and cash infusion strategy Venture Unit, including the (subject to the approval of the The management is confident strates technology by entering the market for the most development of SiC and InP market authorities). that after restructuring, Picogiga would have a advanced generation of wafers, substrates. After studying various options, Picogiga is currently finalizing an agreement with Umicore (listed on Euronext Brussels) whereby Umicore would pro- (million ~) H 1 2001 H 1 2002 vide a capital investment.The Consolidated turnover (including contracts) 8.59 4.62 agreement is subject to certain conditions, including the Operating result -2.30 -5.17 restructuring of Picogiga's exist- Net result -3.41 -6.02 ing financial debt. Shareholders equity end of June 8.68 -10.8 43.8 The restructuring involves a Net indebtedness end of June 35.65 Public Exchange Offer (PEO) Dr. Sam Lee joins GCS as CEO Global Communication As CEO, Sam will report directly been responsible for profitable even more apparent." said Semiconductors (GCS) Inc., a to the Board of Directors and sales growth and increased mar- Dr. Lee. pure-play III-V compound semi- be responsible for GCS' growth ket share at these companies. Global Communication and profitability. Sam received his Ph.D. from conductor wafer foundry, Semiconductors Inc., based in announced today the selection Ohio State University. "After a long and extensive Torrance, California, an ISO of Dr. Sam Lee as its new CEO. search, the management team is "GCS's potential as a pure-play 9002 certified company, pro- "I am extremely pleased to extremely excited to have Dr. III-V compound semiconductor vides compound semiconduc- appoint Dr. Sam Lee as Chief Sam Lee joined GCS" comment- wafer foundry is yew exciting. tor foundry services to the Executive Officer of Global ed by Dr. Owen Wu, founder GCS has a great business model wireless telecommunication Communication Semiconduc- and Chief Strategy Officer of that answers the current market and high-speed networking tors. I have known Sam for GCS. Sam has 28 years of semi- trend of major companies out- industries. GCS currently offers years and finally have the conductor experience with 23 sourcing compound semicon- foundry service for both InGaP opportunity to work with him. of those years in high profile ductor wafer fabrication to and InP HBT processes and Sam's past experiences and tri- leadership roles with compa- reduce manufacturing costs. provides optoelectronic umphs are an ideal fit for GCS." nies such as Fairchild, Motorola, Due to the pressures of the foundry services for PIN diodes Comments Don Brooks, Chair- Raytheon Semiconductor, current world economy the used in the fiber optic commu- man of GCS' Board of Directors.