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MICROWAVE POWER DEVICES EXPECTS ROBUST MARKET

NEW YORK-The continuing growth of wireless telecommunications worldwide has expanded both the amount and the types of business opportunities for Microwave Power Devices Inc., which designs and manufactures highly linear power amplifiers and related subsystems.

“In 1997, service providers sourced to (original equipment) manufacturers $20 billion worth of base stations, and that is expected to be $50 billion by 2001. Amplifiers make up about 5 percent of base stations,” said Paul E. Donofrio, vice president and chief financial officer of Microwave Power Devices.

Motorola Inc. manufacturers its own amplifiers. However, more than a third of this sector, notably emerging suppliers in Asian nations like South Korea, are not captive markets, he said June 16 at the Donaldson, Lufkin & Jenrette Securities Corp. “Wireless & Satellite Conference.”

Microwave Power Devices already supplies other major manufacturers, including Lucent Technologies Inc., Northern Telecom Ltd. and Qualcomm Inc. By 2001, outsourcing of the kinds of components Microwave Power Devices custom makes for OEMs is expected to grow to 40 percent of the $50 billion pie, Donofrio said.

“We’re not vertically integrated. We get transistors from (L.M.) Ericsson and Motorola. We focus on advanced compensation techniques to eliminate distortion, feedback and other call quality problems,” he said.

Today, most original equipment manufacturers that contract out supply of these advanced components do so on a single-source basis. However, Donofrio said there also is “a growing move to multi-sourcing by OEMs.”

Another opportunity is opening up because wireless carriers “are starting to come directly to (components) manufacturers [for help with] niche problems, especially in multichannel [radio-frequency] amplifiers,” he said.

Like many of the 1,000 or so companies near it in the Hauppauge, N.Y., industrial base, Advanced Micro Devices spent decades focused exclusively on supplying the defense industry.

“We started the solid-state amplifier industry 30 years ago,” Donofrio said, adding the company diversified during the last decade into the non-military private sector, including wireless telecommunications.

“As a low-volume defense contractor for 31 years that was moving into the high-volume commercial market for RF amplifiers, we looked at (Mexico’s) maquilladoras and mainland China for manufacturing,” Donofrio said.

“But we decided to automate the process and leave it here where we can monitor it.”

Initial deployments of personal communications services networks in the United States “are pretty much finished,” Donofrio said, so the company is developing a 36 watt alternative amplifier to double call capacity.

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