MRF: In December 1994, Microwaves & RF ran that well-known Alexander Graham Bell photograph on the front cover, modified to include engineers from QUALCOMM and RF Micro Devices to represent your budding relationship with that company. How did that relationship start?

Jerry D. Neal: We started RF Micro Devices in 1991. One of our first design wins was with Nippon Denso in Southern California. They had asked us to design an HBT power amplifier. We did, but it had a thermal runaway problem and they ended up not using the original design. But we went back and fixed it. Last year, as you know, we shipped our billionth power amplifier.

Along the way, we worked with our sales representative in Southern California, Cain Technology, to get us into QUALCOMM. I went to QUALCOMM and got better acquainted with them and met the people developing the first CDMA phones. They had formed that joint venture with Sony to manufacture the phones. We told them that we wanted to be on the RFQs for the RF components in those phones. And at that time, QUALCOMM was not making any of the RF components, such as the LNAs or the power amplifiers. They sent out RFQs for five separate components. We felt that if we could get just one of those, it would be a big-volume job for the company. We did all these proposals, and we got all five. And it almost sunk our company because it took all the resources that we had to develop these parts, and these CDMA components were very challenging.

At one point, we took a picture of everyone in RFMD wearing QUALCOMM tee shirts. That relationship was difficult at the beginning but that's what enabled us to be the company that we are.

MRF: At that time, there was a lot of doubt whether CDMA would take off. Did that doubt ever concern RFMD?

Neal: One of my partners, Bill Pratt, and I went to QUALCOMM and received a very in-depth technical explanation of how the CDMA system was going to work and how they theorized it would perform. After Bill, who has a marvelous technical mind, heard this explanation, he felt CDMA would probably go, so we figured the probability was good that it would take off. As a young company at that time, we were taking a risk on it. But with any small company, there are risks. And the reward for this particular risk was huge.

The relationship with QUALCOMM also got us notoriety, which we wouldn't have gotten in any other way. Your magazine's coverage also helped us as a young company. It showed us that even as a young company we had some expertise and technology that allowed us to go up against much larger companies and still succeed.

MRF: The company has undergone impressive growth since those early days. Were there any challenges in managing that growth?

Neal: When we did the first QUALCOMM chips, we had about 40 people in one facility. Now we have about 2800 people, in 16 countries. We always wanted to follow a charter of making low-cost, high-volume parts and we've stuck to that. What has made it good for us is that our employees are talented and have been a huge help. We also had a culture that helped us grow.

Starting with the three founders, we tried to give our jobs away as quickly as we could. Sometimes the founders can't turn the company loose. It's called the founder's syndrome. And they want to have their fingers in every decision. We didn't do that—we hired great people and turned them loose, and we acted as consultants in many cases. The growth for us hasn't been as difficult for us if we didn't have that culture in place.

MRF: Some of the company's growth has involved acquisitions or investments, such as RFMD's investment in Jazz Semiconductor. How has that worked out?

Neal: Several years ago, we realized that even though we had started in GaAs—we are ramping up, by the way, do process the equivalent of 8000 4-in. GaAs wafers per week—that the kind of components we would be designing would require silicon. We had a relationship with IBM, but we did not have much of a relationship with the other foundries, such as TSMC—we had only a fledgling relationship with them. We decided that to really get involved in silicon, we needed a partner with a fab where we could really develop technology. Part of what we are talking about at present is having a platform where we can integrate the PA, the filters, and the switches onto a chip so that we have a true system on a chip (SoC). To do that in straight CMOS, it will be difficult to achieve the required performance. With Jazz, our strategy was to have a group that we could develop new technology with. And we have developed several unique technologies with Jazz. We have LDMOS, an MOS technology in silicon, that we think is a platform that will allow us to integrate the transceiver components and passive devices on a single chip. But we also think that CMOS is going to be very important in the future and there will be many applications that will have a CMOS PA.

We did a second thing with Jazz. We wanted to guarantee capacity, and we thought that capacity could get tight with our current suppliers. So having a benchmark capacity guarantee that we could count on. The 10-percent ownership enables us to learn and to develop processes that were custom to us.

MRF: In one of your other relationships, with Silicon Wave, RFMD actually acquired the company. How has that worked out?

Neal: Actually, we have put Dave Lyon, the CEO of Silicon Wave, in charge of our wireless connectivity business. Last quarter, that group grew by 50 percent. We are seeing some of the highest growth in the company in the Bluetooth area. I've talked to some editors who feel there is no money to be made in Bluetooth. Well, our competitor, the number one supplier in Bluetooth, CSR, for the first six months of 2005, they shipped 162 million devices at a gross margin of 47 percent. They are making a ton of money. And we think there is a lot of opportunity there. We have developed a single chip that has the whole transceiver, the processor, and memory. We have prototypes now, and will be in production in 2006. We are actually doing a couple of combinations of Bluetooth chips. We are already shipping chips to Motorola without the processor. And one of the new variations includes near-field communications with the Bluetooth capability.