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Apple iPhone supplier warns of 'challenging' quarter ahead

updated 07:00 pm EDT, Thu April 26, 2012

Drop in revenues should be temporary, says CEO

In a possible glimpse into Apple's planning, TriQuint Semiconductor in Oregon (which has supplied chips for several versions of the iPhone) has warned investors that sales some of it older chips will fall at least 19 percent in the current quarter, but that the revenue drop was likely to be only temporary. Although CEO Ralph Quinsey did not specifically name Apple, it is well-known that the iPhone maker is TriQuint's largest single customer, reports The Oregonian.

The company manufactures power-amplifier chips used in the motherboard of the iPhone. On the current iPhone 4S, the company's work is seen in the surface-acoustic wave (SAW) filter, and in the PA-duplexer module. TriQuint power amplifiers have also been seen in the iPhone 3GS.

Through its manufacturing partner Foxconn, Apple's iPhone needs account for some 35 percent of TriQuint's annual revenues. A sharp drop in chip orders for the iPhone in the current quarter with an expected resumption of business later in the year would suggest that Apple is planning to use a newer set of TriQuint chips in a future iPhone, or transitioning the entire iPhone line to newer chips. It may also portend the end of the iPhone 3GS, which uses more TriQuint products than newer models.

The change may also reinforce speculation on the timing of the next iPhone, which is thought to be coming in late summer or early fall. A resumption of sales "in the second half of 2012" as Quinsey told investors could mean that a new iPhone model may appear as late in the year as the iPhone 4S did, several months after the "traditional" mid-summer dates that were the norm for the first few generations of iPhone.

Quinsey told investors that the transition to new technologies would result in some job cuts and severance charges in the fiscal second quarter, which ends for the company on June 30th. Jobs at TriQuint's filter factories in Costa Rica and Florida will be affected.

The dropoff in sales will be the steepest seen in at least two years, but "I belive we will return to normal revenue levels and growth in the second half" of 2012, Quimsey said. He added that the company expects second-quarter revenues to be between $170 million and $185 million, down significantly from it's first-quarter revenue of $216.7 million.

Apart from the gloomy outlook for the current quarter, the company reported a $1.9 million profit for its first quarter, which was also down from the year-ago quarter's profit of $12.4 million. Following the report, the company's stock fell 10 percent after having risen nearly eight percent on the strength of Apple's record earnings. The company employs about 2,900 people. [via The Oregonian]

TriQuint PA chips as seen in the iPhone 3GS

by MacNN Staff



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