Agere Systems and RF Micro Devices announce strategic alliance

Agere Systems, formerly the Microelectronics Group of Lucent Technologies, and RF Micro Devices have formed a strategic alliance to develop, design and manufacture ICs for data-capable digital cellular phones and other communications products.

Under one part of the agreement, RF Micro Devices will invest approximately $58 million over two years to upgrade manufacturing clean room space and purchase semiconductor manufacturing equipment, which will be deployed within Agere’s Orlando, FL, manufacturing facility.

RF Micro Devices anticipates no significant impact on fiscal year 2002 earnings, and capital expenditures related to the alliance have already been included in previous guidance for fiscal year 2002.

Production from the purchased equipment will be allocated first to RF Micro Devices and then to Agere, thereby providing silicon capacity to RF Micro Devices while giving both companies the benefits of combined operations and increased manufacturing volumes. RF Micro Devices plans to deploy silicon manufacturing engineers in Orlando, FL as part of this alliance.

Agere Systems and RF Micro Devices will work together on RF chips based primarily on silicon germanium.

The two companies also intend to create and staff an RF centre of excellence to jointly advance RF chip process technology and design methodology.

The alliance expands the existing co-operation between the two companies to bundle power amplifiers with other wireless chips into a complete chip set for digital cellular handsets. The companies intend to continue to co-operate on future efforts to reduce component count and costs for handsets as well as other communications products.