RF Micro Devices (RFMD), a provider of proprietary radio frequency integrated circuits (RFICs) for wireless communications applications, is planning to expand its China assembly operations by June 2006.

The expansion is expected to increase RFMD's internal assembly capacity by approximately 50%, representing approximately 25% of the Company's assembly requirements. RFMD's world-class assembly operations, which are located in Beijing, were brought online in 2005. Previously, the company outsourced all of its semiconductor assembly services to third party assembly vendors.

By increasing internal assembly capacity, RFMD has significantly strengthened its supply chain and has reduced manufacturing costs, which are a primary contributor to the company's ongoing initiatives to increase gross margin.

Jim Stilson, vice president of operations for RFMD, stated, "As RFMD continues to take market share in transmit modules and cellular transceivers and as customer forecasts for these products have continued to increase for calendar 2006, this assembly expansion underscores our commitment to provide our customers with capacity to meet their growing needs. Our Beijing team is demonstrating world-class assembly performance, and we expect that this expansion will have a meaningful impact to both our ability to meet customer demand and reduce our cost structure. Also, with assembly and test being located in the same building, we get the additional benefit of reduced cycle time and lower inventory carrying cost."

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