TQNT ==> The Allentown Winner!

[mrmarket]

February 9th is going to be a good day

JAAA JAAA JAAA JAAA JAAA

TriQuint Announces Date for Fourth Quarter and 2010 Year-End Earnings Release

Live Webcast Conference Call Scheduled for Wednesday, February 9, 2011



Related Quotes


SymbolPriceChangeTQNT13.24+0.24



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Press Release Source: TriQuint Semiconductor, Inc. On Wednesday January 26, 2011, 8:02 am EST

HILLSBORO, Ore.--(BUSINESS WIRE)-- TriQuint Semiconductor, Inc. (NASDAQ:TQNT - News) will announce its earnings for the year and quarter ended December 31, 2010 on Wednesday, February 9, 2011, at 1:00 p.m. PDT and will host a conference call with the investment community on the same day at 2:00 p.m. PDT.


Conference Call Information:
Date: Wednesday, February 9, 2011 Time: 2:00 p.m. (PDT) Dial-in: 888-813-6582 or 706-643-7082 Conference Call ID #: 36925915

A webcast of the conference call will be available from the Investors section of the Company's website at: www.triquint.com/investors/events. A replay of the conference call will be available through February 16, 2011. To access the replay, please dial 800-642-1687 or 706-645-9291 and enter Conference ID # 36925915.


FACTS ABOUT TRIQUINT


Founded in 1985, TriQuint Semiconductor (NASDAQ:TQNT - News) is a leading global provider of innovative RF solutions and foundry services for the world’s top communications, defense and aerospace companies. People and organizations around the world need real-time, all-the-time connections; TriQuint products help reduce the cost and increase the performance of connected mobile devices and the networks that deliver critical voice, data and video communications. With the industry’s broadest technology portfolio, recognized R&D leadership, and expertise in high-volume manufacturing, TriQuint creates standard and custom products using gallium arsenide (GaAs), gallium nitride (GaN), surface acoustic wave (SAW) and bulk acoustic wave (BAW) technologies. The company has ISO9001-certified manufacturing facilities in the U.S., production in Costa Rica, and design centers in North America and Germany. For more information, visit www.triquint.com.


TriQuint: Connecting the Digital World to the Global Network®

[donlmc]

Favorable article on TQNT

http://www.fool.com/investing/general/2011/02/07/rising-stars-buy-triquint.aspx

[mystiky]

earnings dissapointment

Looks like TQNT is now trading around 11.70 in after hours.

Looks like a long wait for $15's...

TriQuint Semi misses by $0.03, beats on revs; guides Q1 below consensusReports Q4 (Dec) earnings of $0.25 per share, $0.03 worse than the Thomson Reuters consensus of $0.28; revenues rose 31.1% year/year to $253.4 mln vs the $250.7 mln consensus. Co issues downside guidance for Q1, sees EPS of $0.14-0.16 vs. $0.19 Thomson Reuters consensus; sees Q1 revs of $215-225 mln vs. $227.24 mln Thomson Reuters consensus.

[mrmarket]

Looks like TQNT is now trading around 11.70 in after hours.

Looks like a long wait for $15's...

TriQuint Semi misses by $0.03, beats on revs; guides Q1 below consensusReports Q4 (Dec) earnings of $0.25 per share, $0.03 worse than the Thomson Reuters consensus of $0.28; revenues rose 31.1% year/year to $253.4 mln vs the $250.7 mln consensus. Co issues downside guidance for Q1, sees EPS of $0.14-0.16 vs. $0.19 Thomson Reuters consensus; sees Q1 revs of $215-225 mln vs. $227.24 mln Thomson Reuters consensus.

I am comfortable with their revenues. Earnings will follow. You can "create" earnings, it's a lot harder to create revenues. They've had capacity issues which will be resolved. Still love this stock.

[smaskell]

Me too, but...

I am comfortable with their revenues. Earnings will follow. You can "create" earnings, it's a lot harder to create revenues. They've had capacity issues which will be resolved. Still love this stock.

...Sigh... Me too. Only now I'm going to have to love it longer than I originally intended. Because of where I got in and my goals I was going to "love it and leave it" at 14.70. I REALLY hate holding short term stocks over earnings announcements, especially when I'm already up. Just too much ridiculous nonsensical price gyration. I was very tempted to pull the trigger this afternoon but I was SURE I would miss out on a big move. Guess I'll settle in for the ride now.
Greed 1 - Common Sense 0. (again)

[mrmarket]

Question-and-Answer Session

Operator

Yes, Mr. Quinsey. (Operator Instructions) Mr. Quinsey, your first question comes from Edward Snyder of Charter Equity.
Edward Snyder - Charter Equity Research

Thanks a lot. A couple here. First, tax limitations, I’m sure, still played a role in the quarter. Were you limited in terms of what you could ship and when do you think you'll be free of most of your limitations in the GaAs side and then also on the BAW? And then we had a first tear down of the iPhone, the CDMA iPhone and TriQuint was noticeably absent here. Was that a competitive issue or was it basically a capacity issue that you couldn't supply another major program given the limitations you’re seeing in the fab right now?
Ralph Quinsey
First of all, we were on tight supply in Q3, that extended into Q4. By and large, that is relieved in Q1. There are still several devices fairly narrow that we're tied on, particularly wireless LAN. And in some cases BAW, although BAW shortfall will close in a matter of weeks, I believe. But by and large, that's behind us.
Again that was focused on mobile devices and we tried to manage that effectively. I apologize, Ed, I'm not going to speak directly to the Verizon iPhone, but I would like to give you some color generically about the year.
We did see strong design win activity last year. And a big part of it was our mobile devices with growth in the 40% range for several years and we're winning a lot of those solutions because we have great solutions. We did experience tight supply in Q3 based on that success. And in fact, we did go to several customers and asked them to design us out to protect them. We thought that was the right way to approach the market.
Our outlook remains robust. The design win activity remains high. And for those customers that we had to go and have that conversation, we went early enough to build trust with those customers.
Operator

Next in queue is Tim Luke of Barclays Capital.
Tim Luke - Barclays Capital

Thanks so much. Ralph, just I was wondering if you could just remind us how we should think about normal seasonality for a calendar first quarter? And then in guiding for the full year that you'll step up to 20% year-over-year growth, how should we think about the seasonality through the year? Do you expect a pretty robust uptick in June again?
And then just separately on the gross margin side, how should we think about that trending through the year? And Steve, you mentioned on the OpEx side, if I may, that there is a big legal step up of $5 million or $5.6 million, how long is that there for and how should we think about modeling that through the year? Thank you so much.
Ralph Quinsey
So I would say we're going into a seasonably down Q1 combined with a little bit of an allocation hangover, short-term self-inflicted to protect our customers that I talked about. And then some plateauing in some of the our submarkets in networks, a result of a very strong recovery in the first half of 2010 and then a plateauing. And so net-net, you stand back and you add those two things on top of normal seasonality, I think we're a little bit more than seasonal.
When you look at the June quarter, I do think it will be a good uptick quarter. We're not guiding for June yet, but already seeing strong bookings in networks and have a good sense of what’s happening in mobile devices. So I do think June will be a good uptick quarter.
For gross margin, as we go into Q1, the mix will actually be a slight favorable. We're going to run factories pretty strong in Q1 to replenish safety stock. Our safety stock got quite low. And so we’ll reap the benefit of that. And then moving through the year, I anticipate incremental improvement with margin as we continue to grow the company. I'll let Steve talk about the legal expenses now.
Steve Buhaly

Yeah, so for legal, I think this is going to be the peak quarter. I said that last quarter too. So I could be wrong. It's a tough area to forecast, but I expect legal to be closer to $3.5 million in the second quarter, probably down a little bit past there. And then if this thing does result in a trial, that's probably late in the year and I really don't know what the costs of that would involve.
Tim Luke - Barclays Capital
Ralph, if I may, in seeing a different mix than you thought with clearly the handsets slightly stronger, could you give us some clarity as to what changed, vis-à-vis your expectation in terms of the mix, was it just allocation hangover that pressured the margin somewhat?
Ralph Quinsey

Yeah, so in defense and aerospace, starting there, it was around the revenue recognition areas of when projects are completed and when equipment is installed, et cetera. In networks it was really a mixed bag. I can go through the detail of some of the submarkets if you like, but really a mixed bag.
In general, like I said, a breather after really strong growth in distribution and in some of the submarkets. And then, in fact, mobile devices was stronger than we anticipated, so we came in fairly strong in total revenue but the mix being a little bit different than we expected.
Tim Luke - Barclays Capital

Thanks guys.
Operator

Next you have a question from Patrick Newton of Stifel Nicolaus.
Patrick Newton - Stifel Nicolaus

Thank you for taking my questions. I guess the first one is for Steve, a question on OpEx. I guess even if I back out the guided litigation expense in the March quarter and then the provided litigation expense in the December quarter, you’re guiding to OpEx to increase about 5% sequentially. I was wondering if you can maybe walk us through what baskets those are happening in and where exactly you are investing and then how to think about OpEx as we go through 2011?
Steve Buhaly
Yes, the significant increase in OpEx Q4 to Q1 is most likely to be in the R&D area. That's an area that we actually haven't grown as much as we intended to for a couple of quarters and we see some pickup there. And then beyond that you have the litigation expense and SG&A.
Looking out for the full year, we have a couple of goals. We expect to have operating expenses as a percent of revenue less than 25%. And it needs to sync up with gross margin so that we're able to target 20% of operating income.
Patrick Newton - Stifel Nicolaus
Okay. Thank you. And then I guess if I take the mid point of your wireless, I'm sorry, your Q1 revenue guide and then I flat line military and networking that's pointing to wireless down roughly 19% sequentially. And so you spoke to normal seasonality plus a little bit of a hangover, but I was wondering are there any major platforms that perhaps you're shifting off of in Q1. You had one big competitor that’s talking about a converged device that’s ramping at one of your larger customers, I was wondering if that has had any impact on your 1Q outlook?
Steve Buhaly
As you said, it's about 19% down, I agree with that. Seasonality, a little bit of allocation hangover. Some mix adjustments within the market, as you know, we had a very, very high share at one of our customers and we knew and we guided that we would not hold on to that forever. I feel very, very comfortable with the entire mobile devices customer base. By and large we have good relationships and I'm guiding for at least 20% growth in mobile devices. So there will be some shift on platforms but I think the strength of the business is very, very solid.
Patrick Newton - Stifel Nicolaus
And just, Ralph, lastly, on that greater 20% growth in mobile devices, if that comes in within expectations, do you think that if we stand here a year from now that you gain share, loss share, maintain share, how does that play out?
Ralph Quinsey
I think we're clearly gaining share. We measure the share of the market with total RF solutions not just PAs or GaAs because that's the way our customers think about it. And just to put some data around it. I think the top four players have about 50%, 60% share and growing as the top four players. I think we are now number three and we have a chance of being number 2011. So clearly I think we're gaining share.
And just to give you the data point, I estimate our share right now, the way we measure the market and we call it about a 6.6 billion market, over that 13% share in 2010.
Patrick Newton - Stifel Nicolaus
Thank you for taking my questions.
Operator

Then you have a question from Nathan Johnson of Pacific Crest Securities.
Nathan Johnson - Pacific Crest Securities

Hi, thanks for take my question. I wonder if we could come back to the questions around one of your key customers in Samsung. Clearly, just based off of commentary from you guys and from a key competitor they are transitioning to being self-sourced with TriQuint for their leading smartphone platform, but I was wondering if we look at 2011 as a whole, clearly they're expecting to see a solid amount of growth with their smartphone platforms. Do you anticipate that even with the share shift changes at that account that you could still see growth at that account in 2011?
And then secondly, the tax rate that you had guided for 2011, quite a bit lower than what you had talked about in the past. I was just wondering what should we expect for that tax rate going into 2012 as kind of the overall outlook for cash taxes come down versus previous expectations?
Ralph Quinsey
Well, I'll take the first part and let Steve take the second part. Sure, I think we can grow with Samsung, a great customer. Great relationship. I think there is a lot of moving parts there. But absolutely, we can grow with them.
Steve Buhaly

On the tax side, we have run the math in terms of the impact of the tax bill that was passed by Congress late in the year allowing accelerated depreciation on domestic capital put into place this year and the consequence of that was really drove a tax rate that looks like it's going to be around 5% on a cash basis.
It will be higher than that in 2012. We will likely have some credits roll over but we haven't done the math that far out. And obviously a lot it depends on tax law and the level of income we're able to achieve this year.
Nathan Johnson - Pacific Crest Securities
I guess understanding that, but you can potentially give a sense for the magnitude of how we should be looking at that for 2012? I think in the past for 2011, you had been talking about 15% to 20%. Is that a level you would expect for 2012 or is it something lower than that?
Steve Buhaly

I'm not prepared to guide 2012 at this point.
Nathan Johnson - Pacific Crest Securities

Okay, thank you.
Operator

You have a question from the line of Aalok Shah of D.A. Davidson.
Aalok Shah - D.A. Davidson & Co.

Hi, guys. Thanks for taking my question. A couple of questions around Q4. In terms of linearity, Steve, what did you see in the quarter? Was it pretty linear?
Steve Buhaly

Yeah, I think it was quite linear. Remember, in certainly some parts of the quarter and in some areas we were reasonably tight on capacity and that alone creates a fair amount of linearity.
Aalok Shah - D.A. Davidson & Co.
And speaking of that, what was your capacity utilization both in Hillsboro and Texas?
Steve Buhaly
No, it was in the upper 80s. We were at 87% in Oregon and 86% overall for GaAs.
Ralph Quinsey
And just to put that in perspective, keep in mind we're adding capacity. So quarter-to-quarter compares do not make as much sense as they used to.
Aalok Shah - D.A. Davidson & Co.

Okay. And I'm sure you mentioned this, but in terms of Texas itself, when do you think you'll be fully ramped with all capacity?
Ralph Quinsey
We plan to bring that on line in the second half of this year.
Steve Buhaly
But I would note that's the first implementation aligned. There is a lot more we could add to capacity if and when demand warrants it. We have plenty of space and once a complete line is in place, the incremental cost of that capacity is pretty attractive.
Aalok Shah - D.A. Davidson & Co.
And then, Ralph, if you can, maybe just talk about what you are seeing from a geographical standpoint and where you are seeing some strength and weaknesses. Was there inventory issues that you think maybe some of your mobile customers have maybe over built in Q4 and maybe that's what we're doing, we're entering Q1 with a little bit too much inventory in the channel and if you can maybe just quantitatively discuss a little bit on the geography where that might be the space?
Ralph Quinsey
Do you want me to do that backwards-looking or forward-looking?
Aalok Shah - D.A. Davidson & Co.
Forward-looking, please.
Ralph Quinsey
Yes, so forward-looking I think that the market looks pretty robust. Certainly with mobile devices we're seeing, as we described, some normal seasonality. A little bit of a self-inflicted hangover, but a strong growth market next year. It's hard to pin that down geographically. As you know, if it fell into us, a relatively small amount of customers.
From a networks perspective, we're seeing good strength in China driven by – and all of Asia, driven by our optical products. We nearly tripled that revenue last year. That's great product for us, very high ASPs a lot of value-add and we think it will be another good growth market this year. Additionally, we see Pay-TV, fiber-to-the-home growth market in North America and China. The radio market, point-to-point, we're seeing some recovery from a fairly benign year, particularly with our largest customer in point-to-point radio.
Aalok Shah - D.A. Davidson & Co.

Okay. And then just following up on Tim's question real quick, it seems like you're kind of implying that the growth is going to come from networks and your handset business in 2011. Do you think the mix of business that currently you see right now will continue in the same kind of range? And then I'm curious how you think gross margins then, if the mix stays relatively the same, how the gross margins could imply throughout the year?
Ralph Quinsey
Sure. Good question. Let me be very specific. I think the mobile devices business has the opportunity to grow the fastest and I expect it to grow at least 20%, probably greater than 20%. Networks is going to, I believe, grow in that 15% to 20% range. It's largely going to be driven by our transport submarket with optical and cable being the real drivers there, also some point-to-point.
Our defense business is going to be flat at about $20 million a quarter, Q1 and Q2. And then we'll see growth in the second half. It's a relatively smaller part of our business now, less than 10%. But year-over-year it should be flat, plus or minus. Flat and there is probably a little bit of upside opportunity in that. Was there another part of the question?
Aalok Shah - D.A. Davidson & Co.
No, I think that answers it. Thank you. I appreciate that.
Ralph Quinsey
You bet.
Operator
You have a question from the line of David Duley of Steelhead Securities.
David Duley - Steelhead Securities
Good afternoon. So it sounds like when you give your growth guidance for the year of 20% and that defense and networks is characterized as being below that growth rate and your handset business has to be above that growth rate as you mentioned. Do you think it's possible to achieve greater than 20% growth in your handset business without having your two largest customers grow at about that same rate?
Ralph Quinsey
I haven't done that math. Let me back into it. First of all, I think we can achieve greater than 20% growth in the mobile devices business. And to be honest with you, David, it's going to come from the whole market. I haven't really done the math as far as our two largest customers. Our two largest customers are solid customers, I expect to grow with both of them.
David Duley - Steelhead Securities
Okay. And Steve, a question for you on the CapEx, could you just kind of – it was a pretty big CapEx number in the current quarter that just ended. Could you talk about what it will be for Q1 and then what’s the target for all of 2011?
Steve Buhaly
2011 is going to depend little bit on the level of demand we see, but roughly if you took Q4 and multiply it by four, you would get yourself in the right zip code. It's going to be in that range, maybe a little bit above that.
David Duley - Steelhead Securities
And Q4 was what again?
Steve Buhaly
$24 million and change.
David Duley - Steelhead Securities
And whatever CapEx dollars we do spend, could you give us a little bit of an outline as to where we end up at capacity at major points along the road as far as the capacity?
Steve Buhaly
Yes, so we ended Q4, we did about $250 million and we were tight, so let's call that our capacity for Q4. Q2 of 2011, we expect to be able to produce $300 million of revenue. And Q4, $350 million. So otherwise, given some basic mix assumptions, we are growing our ability or capacity to produce revenue by about 40% in 2011.
David Duley - Steelhead Securities
Okay. Just kind of a product question, when you look at your handset business, I don't know how exactly you look at it, but do you see your filter business growing faster than the other segments or I'm not exactly sure how you look at it, but it just seems like there is a lot of momentum around the BAW, SAW and filters and I'm wondering how you view that product line and its growth potential for 2011?
Ralph Quinsey

Yeah, great question. We don’t view it exactly like that, David. All of the BAW and SAW we build right now is fed into a module line and we sell complete RF solutions. And we really think that that’s what the customer and the market is asking for right now. I do agree with you, with the implication that filtering is a critical component to an RF solution.
It's not just building a great amplifier or a great filter or a great switch any more, because of integration around RF solutions, we've been a leader in that path and really have staked our strategy around innovation for integration. And filters play a big role. I mean as you move to 3G and 4G, and I know you know this, and you move to a more frequency domain duplexing, high performance BAW and SAW filtering is an important component.
David Duley - Steelhead Securities
Now, when you look at the RF providers at this point and you stack up filter technology, do you put yourselves in (inaudible) in the lead there or how do you stack up the main players?
Ralph Quinsey
Again, I don't parse it out by PAs or by switches or by filters, I parse it out by RF solutions. That's the way our customers look at it and the way we set our strategy. And I think there is four big players in there. TriQuint, RFD, Skyworks and Avago, and I think the four players as I said have about 50% to 60% share of market. Some are stronger in gas, some are stronger in filters, some are stronger in particular parts of the spectrum. Our approach is that the complete RF solution be strong in all parts of the market. And I believe we're at about 13% share of the market as we see it, a number 3 position. We have a chance of becoming number two this year.
David Duley - Steelhead Securities
Thank you.
Operator

You have a question from the line of Quinn Bolton of Needham & Company.
Quinn Bolton - Needham & Company
Great. Just a few housekeeping items for Steve. Steve, when you say that tax rate of 5% is a cash tax rate, is that the same as your non-GAAP tax rate?
Steve Buhaly

Yes, it is.
Quinn Bolton - Needham & Company
Okay, great. Second question just on the share count, it looks like it did jump up in the fourth quarter, I'm assuming that's probably just somewhat of a reflection of the higher share price and the treasury stock method, but you can give us a sense where you think shares settle out for the first quarter?
Ralph Quinsey
Yes, let me give you some data and you can join me in the forecasting business. We ended at 170 million for Q4 with an average share price for the quarter of about $11. And looking forward, it's a bit of speculation, but if the average share price for the quarter is $13, we would end up at 174 million shares outstanding. So that's kind of the data we're working with and clearly the share price is trading below that now. But we're pretty close to halfway through the quarter. So long answer, the net is we'll probably be in the low 170s.
Quinn Bolton - Needham & Company
Perfect. Okay. Great. And then lastly for Steve, you talked about the operating margin target of 20% for 2011. I know the legal expenses seem to be fairly high in the first half of the year. Does that 20% target include the legal expenses and particularly if you do go to trial with Avago later in the year or could legal expenses cause you to come in below that?
Steve Buhaly
Yeah, a great question. It excludes the legal expenses. I would like to be able to cover that and still hit the 20%, but we're trying to run the core business, if you will, at that 20% profit level and we have to give ourselves a little slack for the litigation. It's somewhat anomalous for the rest of the business and frankly it’s pretty hard to predict.
Quinn Bolton - Needham & Company
Okay. Then just a couple for Ralph, just wondering to see you have any updates on sort of baseband partnerships, I know it’s not the end all, be all, in the industry and you’ve had relationships with the big Tier 1 tear OEMs, but just wondering if you've continued to broaden your baseband partnerships over the last one or two quarters?
Ralph Quinsey
We have. As you know, that market is narrowing, but I think we have fairly strong robust relationships with virtually the whole ecostructure.
Quinn Bolton - Needham & Company
Do you feel you're equally positioned on 2G as well – I'm sorry 3G as well as 2G. I know you had a number of key slots with some of the GSM transmit modules, but do you feel you're covering the 3G either (inaudible) as well?
Ralph Quinsey
A high degree of our revenue comes from 3G. I would say north of 80% now of our revenue for mobile devices comes from 3G. We've backed away last year, backed away from the 2G business. And I'll refer you to our supplemental revenue and you can get a little bit more detail on that. But if you add the 3G, 2.5G connectivity, the big part of that is all 3G related smartphones.
Quinn Bolton - Needham & Company
Okay. Great. And then lastly, just a question about China. I think you mentioned in the prepared comments China is about $150 million of total revenue, I know that's split between networks and mobile devices, but any sense what you see going on in the handset side of the China market?
Ralph Quinsey

Yes, I think Huawei and GTE will be big players in the handset market. I do want to point out that the $150 million is the indigenous revenue, the revenue we developed in the region, Greater China. We actually get more revenue when you include the transfer revenue of application that is designed outside of the region but manufactured in the region. But I think you'll see good growth from Huawei and GTE continuing in the handset space not just on the low end but also in the 3G space.
Quinn Bolton - Needham & Company

Great. Thank you.
Operator

Gentlemen, you have a question from the line of Bill Dezellman of Titan Capital Management.
Bill Dezellman - Titan Capital Management

Referenced several times on this call that you're moving towards the integrated mobile solutions. And two issues we'd like to you address relative to that is who, in addition to TriQuint, is following that integrated solution model? And secondarily, when your customers or protective customers choose one of your competitors not using an integrated module solution, what’s their reason for doing so?
Ralph Quinsey

I would say that the market is transitioning from component solutions to integrated solutions and that's a long-term trend and not unusual for the semiconductor market. The benefits of integration are typically smaller size, better performance through reduction of parasitics and lower cost, as you reduce size.
We have been a leader in integration. Our particular form of integration integrates along the transmit lineup, PA duplexers have been a very successful product line for us. And there are other manufacturers that also do those same components. And then there is other passive integration, whether it's a vertical integration with putting a bunch of filters in a filter bank or trying to integrate a bunch of amplifiers into a multiple amplifier. We also participate in that side of the business. The message I was trying to communicate is that I believe the RF solution over time, that type of integration is going to be the winner.
Bill Dezellman - Titan Capital Management

When your customers choose a non-integrated solution, what is their reasoning for doing so in most cases?
Ralph Quinsey

So for low-end phones, you may choose a component because it doesn't need to be multi banded and multi-loaded, doesn't need complexity. Legacy phones, there is a variety of reasons. It's different for every customer, Bill. Sometimes it's just out of habit.
Bill Dezellman - Titan Capital Management

Thank you. An entirely different question. The customers that you have asked to design TriQuint out, just given your current tight capacity situation, would you please describe characteristic of what those customers were looking for that you felt it was best for them to design you out, whether it was low margins for you, less integration, those sort of dynamics, please?
Ralph Quinsey

Well, they were very happy with the product we were supplying them. Unfortunately, we reached a point where we were limited on supply. So they were just looking for assurance of supply. If I understood your question, correctly.
Bill Dezellman - Titan Capital Management

You choose a certain choice customers you chose to ask to design you out whereas other customers presumably you chose not to design you out. And we're curious, what would have led you to choose the ones that you did to design you out, at least temporally design you out?
Ralph Quinsey

Yes, sure. So we were trying to optimize inclusions, right. We were trying to find a way to protect our customers and opportunities to make the transition easily. And at the same time, we walked away from some business at a low-end 2G business over the year. We walked away from that as well.
Steve Buhaly

I think a lot of it had to do with timing, volume, design, specific processes of the company that particular product required. So it was often very specific to the unique circumstances of the opportunity.
Bill Dezellman - Titan Capital Management

Given that you went down in the forth right way that did you and given that your capacity is increasing by 40% between now and the end of next year, are you already in the product road map for those, I should say back on the product road map for those customers?
Ralph Quinsey

Well, I'm not forecasting what we're in and what we're not in. I am trying to communicate some confidence that we're going to have a good strong growth year in mobile devices across our customer base.
Bill Dezellman - Titan Capital Management
Thank you both.
Ralph Quinsey
Thanks, Bill.
Operator
You have a follow-up question from Edward Snyder of Charter Equity.
Edward Snyder - Charter Equity Research
Yeah, I just disconnected myself in last call. So a few more on the capacity issue, I think last we spoke would look like mid-year, end of year, third quarter before Texas would be up, but it sounds like you've gotten your capacity under control now. How much of your I don't say excess capacity, but your breathing room now is due to products were designed out versus added capacity? So I'm just trying to get an idea of how your backlog may have dipped a bit to give you some relief versus enough capacity to have handled it without backing out of any designs.
Ralph Quinsey

It would be really hard to give you an answer on that. And I mean we have added capacity and we have tried to manage demand to some extent. In some areas where we ask customers though either coming back, so their already coming back. So it is really hard to give you clear guidance.
Edward Snyder - Charter Equity Research
Well, you don’t think you've suffered anything permanent in terms of being designed out because of your irritated customers on any of these capacity issues?
Ralph Quinsey

Well, I don't mean to be naive. I think there are consequences and I think I can characterize overall. We did our best through a challenging situation to protect our customers. Our customers were having very exciting times and so their demand was going up faster than we could keep up with them. I think we have work to do with some of our customers. Again I'll be transparent, we have work to do. But as I step back and look at it, I think I'm trying to communicate confidence that we'll have a strong year in mobile devices.
Edward Snyder - Charter Equity Research
And then back to your BAW, I mean even at this time last year, you were a little bit limited on your capacity for BAW. I guess most of it was consumed in your pad devices. That sounds like it's been alleviated, yields and performance have improved dramatically since then. Any chance that you would be entering into the catalog BAW market on the QUAD filter module banks, head-to-head lets say Avago or you still looking to just use your capacity for internal consumption and pads?
Ralph Quinsey
No guidance on future product plans on this call. All of our filter capacity is currently used for module consumption, internal module consumption. I agree with you that we have made great progress on that line, adding capacity, improving yields and by and large have the constraints behind us.
Edward Snyder - Charter Equity Research
And so have you added all you're going to add in the BAW line or you going to continue to expand it? Naturally that would assume, purvey of your product designs would also start expanding to include maybe other products both internally and externally?
Ralph Quinsey

I do plan to add more capacity for BAW.
Edward Snyder - Charter Equity Research
Okay, thanks.
Operator
You have a question from a private investor, Drew Burk.
Unidentified Analyst
Hi Ralph and Steve, congratulations, good job last year.
Ralph Quinsey

Hi, Drew.
Unidentified Analyst

I just wanted to follow up on, well, first you talk about a 20% operating margin goal and you say that maybe bullish here, can you get there on only 20% revenue growth or will you need to exceed that?
Steve Buhaly

I think we can get there. If you take out the Avago litigation costs, we've been very close in a couple of quarters. Q3 we were very close to that goal I think within rounding to 20%. So we think with a little bit more growth in networks, which we see starting in Q2, we see that coming off the plateau it's been on, a little leverage from scale, continued execution, I think we can get there excluding the litigation cost.
Unidentified Analyst

Okay. And then the second thing, you talk about how your added capacity, this new line is going bring 40% more revenue potential by the end of the year or bring your quarterly potential to $350 million by the end of the year and then earlier you had said that smaller incremental adds to that new line once you put it in from a capital spending standpoint could give you better bump. Could you kind of quantify that a little bit? How much money we have to spend in 2012 to bump up from $350?
Steve Buhaly
I can't quantify it, but I'll describe it. First of all, the capital additions are not just in our Texas 6-inch line. They are all over the company. We are expanding capacity in our Oregon 6-inch line, really squeezing more space out than I thought existed. We're adding capacity or filters both in Texas and Florida. But in Texas, the most expensive piece of work is to put that initial line in because you have to put every piece of equipment you require.
The truth is the capacity of those pieces of equipment are not evenly matched. Right, some can do a lot more than others. So when you want to grow capacity incrementally, you don’t have to buy the full set of equipment again and that's the benefit we'll get once we get that initial line put in place in Texas.
Unidentified Analyst

Okay. All right. I guess that helps. So then the last thing, I think you kind of said and it slipped in, did you get back a major handset OEM in the fourth quarter and what kinds of products are you selling them now that you weren't selling them at the beginning of the year?
Ralph Quinsey
Yeah, I would say that prior – no real changes in the mobile devices customers in Q4 because we sell to virtually all. We saw a good growth. We saw growth in wireless LAN, stronger growth in wireless LAN than we had anticipated, stronger demand in wireless LAN. That's probably the standout for the quarter.
Unidentified Analyst

Great. Thank you very much.
Steve Buhaly
Thank you, Drew.
Operator
You have a follow-up question from Tim Luke of Barclays Capital.
Tim Luke - Barclays Capital

Thanks. Steve, just briefly with respect to the litigation, can you just remind us what the milestones in for its completion or what are the next steps in terms of that process? And then Ralph just on LTE, when does that start to become a relevant contributor to your revenue mix? Thanks.
Steve Buhaly
The litigation, I think that the discovery work will probably wrap up substantially this quarter, next couple of quarters will be spent more on expert analysis, probably some focus on individual testimony and then all of that is in preparation for a trial which looks like it may be late in the year.
Ralph Quinsey

And then on 4G, you're absolutely right to be focused on that. You've seen what 3G has done for our industry and for TriQuint. 4G is an extension of that and a terrific opportunity. We're actively working with customers and partners right now, but I don't anticipate that being really an industry material part of the revenue this year. Next year, next year for sure.
Tim Luke - Barclays Capital

Thank you both very much.
Ralph Quinsey
You bet.
Operator

(Operator Instructions) And gentlemen, you do have a question from Richard Shannon of Northland Capital.
Richard Shannon - Northland Securities

Hi, guys. Just one question on gross margins. I wonder if you could characterize the trends throughout the year, qualitatively and quantitatively if you can kind of adding in the impact from (inaudible) first quarter, talking about some network ramp in the second quarter, which would be a good mix shift and potential for some depreciation increase in the third quarter and then kind of where do you think it's possible to end the year in terms of gross margin?
Ralph Quinsey

You know, that's pretty speculative, but on a broad brush I think it improves fairly steadily through the year. We're obviously guiding to 41% in the first quarter. I think we will have pretty steady improvement as you go partly the rebound in networks and partly scale should drive some improvements and then just basic blocking and tackling.
I'm not sure when the Texas 6-inch line will come on. That's a little bit of a wild card in terms of the efficiency with which that starts. I'm reasonably hopeful because other than the scale it's being done on a copy-exact basis with Oregon, so there won't be a tremendous learning curve there.
Richard Shannon - Northland Securities

Okay, great. Thanks a lot guys.
Ralph Quinsey

You bet.
Operator
And that concludes our Q&A session. Mr. Quinsey, do you have any closing remarks?
Ralph Quinsey

I would just like to thank all of the participants and listeners for their participation today and I look forward to seeing some of you in New York in a couple of weeks at our Investors Day. Thanks a lot.
Operator
Ladies and gentlemen, that concludes our conference. You may now disconnect.

[riverbabe]

thank you

Thank you for posting that CC. What I read made me a little nervous, requesting being designed out (especially the i-phone???). But I like this company and their business and am willing to stay put for now. A little long term for my short term account, but not unusual. You are HUGE Ernie.

[mrmarket]

Thank you for posting that CC. What I read made me a little nervous, requesting being designed out (especially the i-phone???). But I like this company and their business and am willing to stay put for now. A little long term for my short term account, but not unusual. You are HUGE Ernie.

The revenues tell the story. If I had seen weakness there I would have been a little concerned. That wasn't the case at all.

[riverbabe]

The revenues tell the story. If I had seen weakness there I would have been a little concerned. That wasn't the case at all.

I'm staying with you. I think your analysis is superb, as always.

[smaskell]

Whew!

The revenues tell the story. If I had seen weakness there I would have been a little concerned. That wasn't the case at all.

Yeah, thanks for the CC $$MrM$$. I agree this is a solid company. I just hate what earnings releases can do to the short term price. The stock can take a beating even when expectations are met. The old "sell the news" mentality. Fortunately, TQNT hasn't fared too badly today. When I saw the after hours price I was afraid there might be a short term panic this morning but it bottomed out around 12 (so far). That seems to be a good indication that the stock owners are reasonably confident and are standing pat.

[steelman]

"Ralph Quinsey, President and Chief Executive Officer, stated, "TriQuint turned in record 2010 financial results growing revenue 34%. GAAP net income for the year grew almost 12 fold and non-GAAP earnings almost tripled. I am very pleased with the performance of the Company. With the world transitioning to a mobile Internet, I expect a strong market and see another solid growth year for TriQuint in 2011."

Datamonitor

TriQuint Semiconductor, Inc has reported that its net income for the fourth quarter ended December 31, 2010 was $42.49 million, or $0.25 per diluted share, compared to $17.48 million, or $0.11 per diluted share, for the same period of 2009.

Revenues for the fourth quarter of 2010 were $253.39 million, compared to $193.34 million for the same period of 2009.

Net income for the year ended December 31, 2010 was $190.84 million, or $1.17 per diluted share, compared to $16.24 million, or $0.11 per diluted share, for the year ended December 31, 2009.

Revenues for the full year 2010 were $878.7 million, compared to $654.3 million for the full year 2009."

Wow, TQNT turned in a record financial year for 2010, miss estimates by .03 and there stock tumbles like that???? That is so stupid, makes no sense. Just makes you want to buy more on the dip. I am looking at some May calls now.

[thescott]

Reason to OPT out of Verizon iPhone

My thoughts on the whole " asking to be designed out of the iphone " is that it was done to focus their limited capacity on next generation products from Apple instead of tying up precious capacity on a product that will see declining production demand in the future as new products are rolled out. Talks of iphone5 ( Summer 11), iPad 2, (april) and even an iPad mini ( Fall 11 ) and I see why they choose to opt out on the Verizon phone.

[mrmarket]

Looks like TQNT is now trading around 11.70 in after hours.

Looks like a long wait for $15's...

TriQuint Semi misses by $0.03, beats on revs; guides Q1 below consensusReports Q4 (Dec) earnings of $0.25 per share, $0.03 worse than the Thomson Reuters consensus of $0.28; revenues rose 31.1% year/year to $253.4 mln vs the $250.7 mln consensus. Co issues downside guidance for Q1, sees EPS of $0.14-0.16 vs. $0.19 Thomson Reuters consensus; sees Q1 revs of $215-225 mln vs. $227.24 mln Thomson Reuters consensus.

Looks a lot closer to the 15's than the 11's right now!!

[Karel]

Well, I have some cash free again and saw this thread bubbling up. In at 13-twentyish. Limit sell order in for 16.45, or what was it.

Regards,

Karel

[steelman]

Nice move today, up 4 plus%, to $13.61 It might be a little late for my Feb $14 calls, but hopefully my $14 March Calls will make up for it. It closed above it's 30 day MA today which is always a good thing.