ANADIGICS makes chips that cook with GaAs. The company makes gallium arsenide (GaAs) and indium phosphide (InP) radio-frequency integrated circuits for cable television systems, wireless communications devices, and fiber-optic equipment. GaAs and InP are costlier than silicon, but their physical properties allow the compound materials to be used for chips that are smaller and faster or more energy-efficient than silicon chips. ANADIGICS' power amplifiers, switches, and other chips can be found in the cable modems, set-top boxes, wireless phones, and other gear of companies including LG Electronics and Research In Motion. Asian customers account for nearly three-quarters of sales.
Hard times returned to the semiconductor industry in 2008, as lower sales plagued chip makers worldwide, due to the credit crisis and unsettled economic conditions. ANADIGICS cut nearly 100 jobs in 2009, a 14% slash.
The widespread industry downturn owing to lower sales of computers and consumer electronics resulted in the company's sales being almost halved for 2009, and ANADIGICS was in the red for the second straight year. In the past decade, the chip maker was profitable in only two years because of the industry's notorious cyclicality. The company carries an accumulated deficit of $391 million as a result.
Operating in a highly competitive market segment, ANADIGICS may find that its GaAs-based semiconductors could become less cost-competitive with silicon-based alternatives. The chip maker must continually develop new products to remain competitive.
What helped ANADIGICS in 2010 was an electronics industry recovery that gathered momentum. Wireless communications was an area of particular strength, with business professionals and consumers buying more laptop and notebook computers, smartphones, and other mobile devices that can wirelessly connect with the Internet. The decade ahead will see the worldwide transition from third-generation (3G) data communications to faster 4G data services, using the Long Term Evolution (LTE) and WiMAX standards. ANADIGICS is shipping WiMAX power amplifiers to several customers, and it has relationships with manufacturers of LTE wireless networking equipment.
In addition to 3G/4G wireless products, ANADIGICS continues to address wireless LAN (Wi-Fi) products, cable modems and set-top boxes, cable TV infrastructure, and fiber-to-the-premises (FTTP) technology, such as the bundled FiOS service (Internet, telephone, and digital TV) being rolled out across the US by Verizon Communications.
In 2011 CEO Mario Rivas resigned; he was replaced by SVP and head of strategy, Ron Michels, who joined the company in 1987. – less