Can TriQuint Turn Things Around in 2012?

Shareholders of TriQuint Semiconductor (NAS: TQNT) took a roller-coaster ride in 2011 -- the scary kind with lots of sharp drops. Competition in the radio signal amplification space is fiercer than ever -- but so is the market's overall growth.

Will TriQuint right this sinking ship in 2012, or will the company continue to slip, trip, and fall under the many challenges? Let's have a look.

At a recent industry conference, TriQuint CFO Steven Buhaly said that the smartphone industry continues to drive business. Phone builders are asking for more integrated all-in-one solutions, and chip prices always fall over time, but smartphones are only getting more common and more bandwidth-hungry. All in all, the dollar-value market for signal processors should grow by 15% next year.

I was kind of rough on CEO Ralph Quinsey in my look back at TriQuint's 2011. It seemed like Quinsey was planning a take-no-prisoners price war to get some use out of freshly built manufacturing facilities. Yeah, the company will use price as a weapon -- but mostly in the near-obsolete 2G market. 3G and 4G will be competitive as TriQuint vies with Skyworks Solutions (NAS: SWKS) , Avago (NAS: AVGO) , and RF Micro Devices (NAS: RFMD) for a nice slice of market pie, but the all-out price assault won't happen in the premium battlefield. That's a very good thing.

In case the other guys steal orders from TriQuint in the handset space, the company can turn to the infrastructure side of things. The company is a leading parts supplier to base station builders from Ericsson (NAS: ERIC) to Motorola Solutions (NYS: MSI) .

So rivals are gathering at the gates, but TriQuint is better armed than I thought and can lean a bit on alternative revenue sources if the main gig goes sour.

Mind you, it's not all roses and rainbows. Fellow Fool Rich Smith worries about TriQuint's restricted cash flows. I still need to see the company winning back some lost market share. In short, I still wouldn't buy this stock today. There are too many truly great investment opportunities in the mobile market to risk capital on a highly uncertain bounce. As an example, here's one brilliant mobile computing idea for your portfolio in 2012.

At the time thisarticle was published

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