NXP Semiconductors launches $100 million Arizona 5G GaN fab expansion

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NXP has released new guidance for its fiscal Q1 results.

NXP Semiconductors recently opened a $100 million gallium nitride (GaN) fab extension inside its Chandler, Arizona-based factory. The new facility will produce 150 mm (6-inch) GaN radiofrequency (RF) 5G base station power amplifiers.

The manufacturer touted its new center as the most advanced plant of its type in the United States.

Why NXP Opened a Dedicated 5G GaN Facility

NXP’s new fab will allow the company to grow its presence in the 5G space.

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In March, Research and Markets posted a report stating the global GaN RF segment would grow from $17.4 billion this year to $26.2 billion by 2025. The analysis firm explained the sector is expanding quickly because GaN components offer higher power density, efficiency, and thermal connectivity than parts made with other materials.

NXP intends to gain crucial market advantage by manufacturing products from superior raw material.

The company also expanded its Chandler facility to integrate its design and manufacturing operations better. With its GaN researchers working in the same building as its production line, the firm could theoretically expedite its development process.

That acceleration could be hugely beneficial right now because many countries are in the process of establishing their modernizing their telecom infrastructures. Since the firm is a Nokia supplier, it is likely experiencing strong demand for its fifth-generation networking base station components. As the Finnish company just secured a contract to build more of Britain’s 5G infrastructure, its order volume will increase.

NXP expects its GaN fab to hit full capacity by year’s end.

Recovery Through Product Diversity

The Dutch semiconductor manufacturer’s new 5G GaN facility is coming online at exactly the right moment.

NXP derives the bulk of its revenue from selling automotive electronic components. But its income has taken a major hit this year because of the coronavirus pandemic.

Early on, the car sector suffered from widespread production shutdowns as national government issued self-quarantine orders to halt the pandemic’s spread. The ailment’s devastating impact on the global economy also hurt demand for new motor vehicles.

Although the auto industry will inevitably recover, NXP needs a new revenue stream to sustain itself in the interim.

The firm’s 5G component fab should give it the resources to do just that. In the second quarter, the corporation reported the segment grew by 9 percent from the same time last year. Once its latest GaN offerings go into circulation, its telecom revenue will likely experience an even higher growth rate.

Consequently, NXP’s recovery will be driven by its efforts to maintain a diverse and cutting-edge product portfolio.

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