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RF Micro Ditches WLAN Chipsets

RF Micro Devices said it will stop making internal wireless local area network (WLAN) chipsets and instead focus on other parts of its business.

The company best known for making cell phone chips said it will now focus more on its linear power amplifier modules and Bluetooth products. As part of the restructuring, RF Micro said it will layoff its WLAN chipset employees at its San Jose, Calif., location, close its offices in Moscow, Russia, and Leuven, Belgium, and shuffle certain people and servers into other divisions.

Executives said RF Micro will continue to support its existing WLAN component business, which includes its transceivers for gaming and other applications, as well as its WLAN power amplifiers and front-end modules.

"Our actions announced today will enable RF Micro Devices to sharpen its strategic focus on our greatest opportunities for long-term, profitable growth, including our industry-leading cellular power amplifiers, our Polaris Total Radio cellular transceivers and our Bluetooth products," Bob Bruggeworth, RF Micro president and CEO, said in a statement.

RF Micro started its foray into the WLAN chipset business back in 2002, when the Greensboro, NC-based company said it would purchase privately held wireless LAN chipmaker Resonext Communications.

RF Micro used the acquisition to expand into other areas, including chips for global positioning systems with the purchase last year of IBM's GPS development operation. The company began shipping some 802.11b transceiver chips in March 2002 and by September had shipped more than two million.

But the sector has been extremely aggressive with competition coming from Intel, which makes its own Centrino WLAN chipsets, and third-party vendors Broadcom and Atheros.

The WLAN chipset business is robust. China's WLAN market expected to generate sales of $23.45 million in 2005 -- up 20 percent from 2004 -- due to the spread of broadband access, falling equipment prices and continued popularity of notebook PCs, according to a new Global Sources' Communications report released today.

Still, RF Micro says it can cut itself out a vibrant business alongside the WLAN chipset area with its other core products.

"We remain very enthusiastic about our opportunities for sustainable growth," Bruggeworth said.