GaAs microelectronics technology
product needed to employ GaAs in the manufacture of low-noise block converters that take a set of frequencies in the Ku-band (11-12 GHz), amplify them, down-convert them to an intermediate frequency of 1 GHz, and then send the resultant signal to the set-top box.
Anadigics priced the parts at about $5 and won the order for them. To meet the subsequent demand, everyone within the company dropped what they were doing and started working on this project. “Suddenly there was the first high-volume GaAs IC market of any substance,” recollects Rosenzweig.
Within three years Anadigics was churning out 5 million ICs. This required further capital equipment, but to put the volumes in perspective, this throughput is a tiny fraction compared to the 200-300 million ICs produced by the company today. Back then the process required a lot of manual labor, and yields varied substantially. “You had good yields and bad yields - it was not a very controllable process,” reminisces Rosenzweig.
The $15 million annual sales generated by shipping 5 million GaAs ICs put the company on a far better financial footing. It helped spur annual revenues to $20-25 million, and made the company a viable entity that was close to turning in a profit. Winning additional financing was also far easier, and the company had a couple of additional rounds of investment.
The mobile revolution
Not long after this a product came along that changed the GaAs IC industry forever: the handset. Initially this wasn’t the portable, lightweight device of today that fits easily into a pocket or handbag, but a car phone running off the automobile’s battery. In this context efficiency hardly mattered, and silicon LDMOS and bipolar technologies were capable of meeting the output power requirements. However, handset manufacturers were well aware of the potential of GaAs power amplifiers, which promised to offer far higher efficiencies that would draw less power from the battery, leading to increased talk time.
Anadigics decided to try and team up with the cell phone manufacturers. The market leader of the time was Motorola, but they already had their own internal GaAs capability. So Anadigics scoured the globe trying to find a firm that would invest in the Warren outfit and pay its development costs for GaAs power amplifiers. “We wound up with Ericsson being a strategic development partner. That was very important. They didn’t fund us, but they gave us the specs,” recollects Rosenzweig.
When Anadigics started shipping the PAs in 1995 it entered a new era. Annual sales grew to $25-30 million, and the company was now profitable. The latter achievement had major implications – it allowed Anadigics to go public and raise a further $24 million.
“Part of the reason for raising that money was to use the proceeds to expand the fab, so that we could handle much more production,” explains Rosenzweig. “Around 1997 we realized that production was not economically viable on 3-inch wafers, and we expanded to 4-inch. We were the first company to do that.”
By then Anadigics’ sales were dominated by GaAs PAs and revenue had rocketed to $75 million. “We were supplying Nokia with PAs, we had virtually all of Ericsson’s business, and we helped Qualcomm launch the PCS industry in the US,” recounts Rosenzweig. Introduction of PCS technology was a major breakthrough, because it started the era of digital cellular communication.
Anadigics was now in the incredibly enviable position of being the global leader in a rapidly expanding market, and to increase its chip production and cut manufacturing costs it built a 6-inch GaAs fab that came on-line in July 1999. This helped the company to continue to ramp up its GaAs IC shipments and realize record sales of $51 million in the third fiscal quarter of 2000.
But the glory days didn’t last long. During the late 1990s handset manufacturers started migrating from batteries operating at 6 V to 4.5 V and finally 3V versions. The HBT was better suited to these lower voltages, and it also had another major plus point, higher efficiency. “Once HBTs were proven to meet the price points that the handsets required – a $1-2 power amplifier – the game was over for the MESFET in the handset market,” admits Rosenzweig.
Anadigics’ demise was quick. In 2000 its sales were unscathed by the HBT and were worth $172.3 million, but by 2001 - the year the
dot.com bubble burst - MESFET shipments for PAs had collapsed, dragging down total annual revenue to just $84.7 million. Everyone could see this coming, and shortly after it happened Bami Bastani - who took over as CEO from Rosenzweig in October 1998 - faced a tough decision: should Anadigics exit the handset business, or become a HBT company?
He chose the latter, but he was determined that Anadigics would remain a trendsetter, rather than becoming a crowd
Anadigics’ current headquarters under
construction June 2010
www.compoundsemiconductor.net 27
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