RFMD has recently completed the expansion of its test, tape and reel, and assembly facility, located in Beijing, China. In addition to newly qualified internal assembly capacity for power amplifiers (PAs), switch-based products, and antenna control solutions, RFMD is also qualifying advanced flip chip capabilities for its 2G, 3G, and 4G LTE and TD-LTE products.
RFMD anticipates the expansion will enable it to quickly accelerate internal assembly to accommodate broad customer demand for its expanding portfolio of RF solutions. The capacity expansion efforts and resulting increase in internal assembly are expected to contribute to RFMD's stated goal of expanding non-GAAP gross margin by 300-400 bps by the March 2014 quarter, as compared to non-GAAP gross margin of 34.4% achieved in the March 2013 quarter. On August 26, 2013, RFMD announced it was on track to achieve another major gross margin expansion initiative -- the ramp of its new low-cost CMOS PA for entry market 2G handsets.
RFMD's high-performance RF solutions are broadly adopted across multiple growth markets and applications, including smartphones, handsets, tablets, notebooks, Wi-Fi, CATV, and hi-rel applications. The increasing use of RF technology is core to the collective value of wireless connections between people, data, processes, and objects, and is central to the popular concept of the Internet of Things. According to Cisco, the Internet of Things is expected to grow at a compound annual growth rate of 25% during 2012 to 2020, reaching approximately 50 billion connected devices by 2020.
