Is the Chinese Phone Market Still Hot -- or Not?
Radio chip designer TriQuint Semiconductor (NAS: TQNT) blames weak sales in China for some of its troubles. On the other hand, rival RF Micro Devices (NAS: RFMD) says that orders are particularly strong in the Chinese market.
Sales of entry-level 3G radio chips for emerging markets like China just doubled from one quarter to the next, and are expected to double again in the next three months. That's one ingredient in the growth recipe that should bake up $250 million in next-period sales -- up from $244 million in the just-reported second quarter and ahead of industry growth rates.
A close partnership with CDMA-signaling leader Qualcomm (NAS: QCOM) keeps this company on the bleeding edge; Qualcomm recently introduced a low-cost 3G solution with RF Micro power amps included in the reference design -- a whole new win as Qualcomm typically gets those components from elsewhere. Partnerships like this can help you overcome macroeconomic speed bumps of any size.
Moreover, RF Micro doesn't just sell handset chips but also provides supporting radio and power functions to the tower-mounted wireless base stations. In that capacity, RF Micro hopes to keep snagging baseband market share with market-leading partners such as Intel (NAS: INTC) , Qualcomm again, and Spreadtrum Communications (NAS: SPRD) . Getting a foot in the door there may lead to new handset-centric sales down the line as the signal chip builders get comfortable with RF Micro on both sides of the connection.
So RF Micro is proving that the Chinese cellphone market isn't busted -- it's just looking for new low-cost solutions. At the moment, RF Micro appears to fit that bill better than TriQuint, but this could change at any moment. I'd suggest keeping a close eye on these wireless radio specialists along with joint rivals Avago Technologies (NAS: AVGO) and Skyworks Solutions (NAS: SWKS) . Today's winner could be tomorrow's loser and vice versa. Our Foolish watchlist feature will help you stay on top of the wild swings -- just click here to get started with a basket of wireless tech stocks.
At the time this article was published Fool contributor Anders Bylund holds no position in any of the companies mentioned. The Motley Fool owns shares of Qualcomm, Intel, and TriQuint Semiconductor. Motley Fool newsletter services have recommended buying shares of Intel. Motley Fool newsletter services have recommended creating a bull call spread position in Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.