RF Micro Devices Delivers Record Quarterly Results

Comments From Management

Bob Bruggeworth, president and CEO of RF Micro Devices, said, "In the December 2006 quarter, RFMD continued to execute on a proven growth strategy. The markets for our products remain strong and RFMD continues to benefit by bringing compelling, differentiated products to our customers. As we look to March and the balance of 2007, we expect our growth to be led by our industry-leading power amplifiers as well as our POLARIS(TM) family of TOTAL RADIO(TM) transceiver solutions. We also anticipate that initial production ramps of our GaN-based products and our software-based GPS solutions will commence in 2007, which we expect will contribute positively to growth, diversification and profitability."

Dean Priddy, CFO and vice president, finance and administration of RF Micro Devices, said, "The December 2006 quarter highlights RFMD's ability to drive continued revenue growth and improving profitability. We are demonstrating consistent, sustainable financial returns, and we are advancing toward our long-term operating model of 15 percent operating income. Our performance and outlook demonstrate the importance of investing in our future. With our expanded manufacturing capacity, we believe that RFMD is capable of continued revenue growth and reduced manufacturing costs. Finally, our balance sheet is equally as strong as our income statement, and RFMD's financial outlook has never been stronger."

Non-GAAP Financial Measures

RFMD reports gross margin, operating income, net income and earnings per share (EPS) on a GAAP basis and non-GAAP basis. RFMD believes non-GAAP financial measures provide useful supplemental information to investors and facilitate a better understanding of results of operations as seen through the eyes of management. RFMD has chosen to provide this supplemental information to enable investors to perform additional comparisons of operating results and analyze financial performance without the impact of certain non-cash expenses or unusual items that may obscure trends in RFMD's underlying performance. Management uses these non-GAAP financial measures internally to make strategic decisions, forecast future results and evaluate RFMD's current performance. These non-GAAP financial measures are not in accordance with, or an alternative for, GAAP financial measures and may differ from non-GAAP financial measures used by other companies.

RF Micro Devices will conduct a conference call at 5:00 p.m. EST today to discuss today's press release. The conference call will be broadcast live over the Internet and can be accessed by any interested party at http://www.earnings.com or http://www.rfmd.com (under Investor Info). A telephone playback of the conference call will be available approximately one hour after the call's completion by dialing 303-590-3000 and entering pass code 11080516.

About RFMD

RF Micro Devices, Inc. (NASDAQ: RFMD) is a global leader in the design and manufacture of high-performance radio systems and solutions for applications that drive mobile communications. RFMD's power amplifiers, transmit modules, cellular transceivers and system-on-chip (SOC) solutions enable worldwide mobility, provide enhanced connectivity and support advanced functionality in current- and next-generation mobile handsets, cellular base stations, wireless local area networks (WLANs), wireless personal area networks (WPANs) and global positioning systems (GPS). Recognized for its diverse portfolio of state-of-the-art semiconductor technologies and vast RF systems expertise, RFMD is a preferred supplier enabling the world's leading mobile device manufacturers to deliver advanced wireless capabilities that satisfy current and future market demands.

Headquartered in Greensboro, N.C., RFMD is an ISO 9001- and ISO 14001- certified manufacturer with worldwide engineering, design, sales and service facilities. RFMD is traded on the NASDAQ Global Select Market under the symbol RFMD. For more information, please visit RFMD's web site at www.rfmd.com.

This press release includes "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, representations and contentions and are not historical facts and typically are identified by use of terms such as "may," "will," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue" and similar words, although some forward-looking statements are expressed differently. You should be aware that the forward-looking statements included herein represent management's current judgment and expectations, but our actual results, events and performance could differ materially from those expressed or implied by forward-looking statements. We do not intend to update any of these forward-looking statements or publicly announce the results of any revisions to these forward-looking statements, other than as is required under the federal securities laws. RF Micro Devices' business is subject to numerous risks and uncertainties, including variability in quarterly operating results, the rate of growth and development of wireless markets, risks associated with the operation of our wafer fabrication facilities, molecular beam epitaxy facility, assembly facility and test and tape and reel facilities, our ability to attract and retain skilled personnel and develop leaders, variability in production yields, our ability to reduce costs and improve gross margins by implementing innovative technologies, our ability to bring new products to market, our ability to adjust production capacity in a timely fashion in response to changes in demand for our products, dependence on a limited number of customers, and dependence on third parties. These and other risks and uncertainties, which are described in more detail in RF Micro Devices' most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, could cause actual results and developments to be materially different from those expressed or implied by any of these forward- looking statements.

RF MICRO DEVICES(R) and RFMD(R) are trademarks of RFMD, LLC. All other trade

    names, trademarks and registered trademarks are the property of their
                              respective owners.



                   RF MICRO DEVICES, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                    (In thousands, except per share data)
                                 (Unaudited)

                                               Three Months Ended December 31,
                                                      2006           2005

    Total revenue                                   $281,091       $207,974

    Costs and expenses:
     Cost of goods sold (1)                          180,594        132,993
     Research and development (1)                     47,526         38,650
     Marketing and selling (1)                        13,010         11,906
     General and administrative (1)                    8,450          6,919
     Other operating (income) expense (1)            (34,558)              380

          Total  costs  and  expenses  (1)                                        215,022                190,848

        Operating  income                                                                    66,069                  17,126
        Other  income,  net                                                                    1,303                        298

        Income  before  income  taxes                                              $67,372                $17,424
        Income  tax  expense                                                                (8,046)                (2,746)

        Net  income                                                                              $59,326                $14,678

        Net  income  per  share,  diluted                                            $0.26                    $0.07

        Weighted  average  outstanding  diluted  shares            227,852                222,565

        (1)

                                                        Three  Months  Ended                Three  Months  Ended
                                                        December  31,  2006                    December  31,  2005

                                                                  Share-                                            Share-
                                                                  based                                              based
                                                    As          Compen-                            As          Compen-
                                              Reported    sation          Net        Reported    sation          Net
        Total  costs
          and  expenses:
          Cost  of  goods
            sold                          $180,594      $828      $179,766    $132,993      $154      $132,839
          Research  and
            development                47,526    1,093          46,433        38,650        121          38,529
          Marketing  and
            selling                        13,010        598          12,412        11,906        340          11,566
          General  and
            administrative            8,450        699            7,751          6,919        247            6,672
          Other  operating
            (income)  expense    (34,558)      102        (34,660)            380            -                380
        Total  costs  and
          expenses                    $215,022  $3,320      $211,702    $190,848        $862    $189,986



                                      RF  MICRO  DEVICES,  INC.  AND  SUBSIDIARIES
                                CONDENSED  CONSOLIDATED  STATEMENT  OF  OPERATIONS
                                        (In  thousands,  except  per  share  data)
                                                                  (Unaudited)

                                                                                                Nine  Months  Ended  December  31,
                                                                                                            2006                      2005

        Total  revenue                                                                      $766,345              $544,362

        Costs  and  expenses:
          Cost  of  goods  sold  (1)                                                    500,051                351,322
          Research  and  development  (1)                                        137,884                116,824
          Marketing  and  selling  (1)                                                40,900                  36,041
          General  and  administrative  (1)                                      28,853                  20,084
          Other  operating  income  (1)                                            (34,460)                    (304)

          Total  costs  and  expenses  (1)                                        673,228                523,967

        Operating  income                                                                    93,117                  20,395

        Impairment  of  Jazz  Semiconductor,  Inc.
          investment                                                                            (33,865)                          -
        Other  income,  net                                                                    3,667                        851

        Income  before  income  taxes                                              $62,919                $21,246
        Income  tax  expense                                                                (9,635)                (3,348)

        Net  income                                                                              $53,284                $17,898

        Net  income  per  share,  diluted                                            $0.25                    $0.09

        Weighted  average  outstanding  diluted  shares            225,940                191,678


        (1)


                                                            Nine  Months  Ended          Nine  Months  Ended
                                                                December  31,  2006          December  31,  2005

                                                                  Share-                                            Share-
                                                                  based                                              based
                                                    As          Compen-                            As          Compen-
                                              Reported    sation          Net        Reported    sation          Net
        Total  costs
          and  expenses:
          Cost  of  goods
            sold                          $500,051    $3,813    $496,238    $351,322        $768    $350,554
          Research  and
            development              137,884      4,542      133,342      116,824      1,129      115,695
          Marketing  and
            selling                        40,900      3,165        37,735        36,041      1,336        34,705
          General  and
            administrative          28,853      6,453        22,400        20,084          849        19,235
          Other  operating
            income                        (34,460)        102      (34,562)          (304)            -            (304)
        Total  costs  and
          expenses                    $673,228  $18,075    $655,153    $523,967    $4,082    $519,885


                                      RF  MICRO  DEVICES,  INC.  AND  SUBSIDIARIES
                        RECONCILIATION  OF  GAAP  TO  NON-GAAP  FINANCIAL  MEASURES
                                        (In  thousands,  except  per  share  data)
                                                                  (Unaudited)

                                                                                                Three  Months  Ended
                                                                          December  31,    September  30,    December  31,
                                                                                  2006                    2006                      2005

        GAAP  operating  expenses                          $34,428              $73,126                $57,855
          Share-based  compensation  expense          2,492                  8,521                        708
          Amortization  of  intangible  assets            285                      285                        274
          Gain  on  sale  of  substantially  all
            Bluetooth(R)  assets                              (36,311)                        -                            -
          Restructuring  charges  related
            to  sale  of  substantially  all
            Bluetooth(R)  assets                                  1,752                          -                            -
          Discontinuation  of  WLAN  chipset
            development  efforts  (adjustment)          (100)                      32                        380
        Non-GAAP  operating  expenses                    66,310                64,288                  56,493

        GAAP  operating  income                                66,069                13,015                  17,126
          Share-based  compensation  expense          3,320                  9,289                        862
          Amortization  of  intangible  assets            484                      503                        442
          Gain  on  sale  of  substantially  all
            Bluetooth(R)  assets                              (36,311)                        -                            -
          Restructuring  charges  related  to
            sale  of  substantially  all
            Bluetooth(R)  assets                                  1,752                          -                            -
          Discontinuation  of  WLAN  chipset
            development  efforts(adjustment)            (100)                      32                        380
        Non-GAAP  operating  income                        35,214                22,839                  18,810

        GAAP  net  income  (loss)                              59,326              (19,977)                14,678
          Impairment  of  Jazz  investment                        -                33,865                            -
          Share-based  compensation  expense          3,320                  9,289                        862
          Amortization  of  intangible  assets            484                      503                        442
          Gain  on  sale  of  substantially
            all  Bluetooth(R)  assets                      (36,311)                        -                            -
          Restructuring  charges  related  to
            sale  of  substantially  all
            Bluetooth(R)  assets                                  1,752                          -                            -
          Tax  effect  on  certain  Non-GAAP
            adjustments                                                  5,872                          -                            -
          Discontinuation  of  WLAN  chipset
            development  efforts  (adjustment)          (100)                      32                        380

        Non-GAAP  net  income                                    34,343                23,712                  16,362
        Plus:  Income  impact  of  assumed
          conversions  for  interest  on
          1.50%  convertible  notes                                977                  1,050                    1,036
        Non-GAAP  net  income  plus  assumed
          conversion  of  notes-Numerator
          for  diluted  income  per  share              $35,320              $24,762                $17,398

        GAAP  weighted  average  outstanding
          diluted  shares                                          227,852              191,670                222,565
        Adjustments:
          Diluted  stock  options                                        -                  2,484                            -
          Assumed  conversion  of  1.50%
            convertible  notes                                              -                30,144                            -
        Non-GAAP  weighted  average
          outstanding  diluted  shares                  227,852              224,298                222,565

        Non-GAAP  net  income  per  share,
          diluted                                                            $0.16                  $0.11                    $0.08

        GAAP  gross  margin  percentage                      35.8%                  34.9%                    36.1%
          Adjustment  for  share-based
            compensation                                                    0.3%                    0.3%                      0.0%
          Adjustment  for  intangible
            amortization                                                    0.0%                    0.1%                      0.1%
        Non-GAAP  gross  margin  percentage              36.1%                  35.3%                    36.2%



                                      RF  MICRO  DEVICES,  INC.  AND  SUBSIDIARIES
                                          CONDENSED  CONSOLIDATED  BALANCE  SHEETS
                                                                (In  thousands)

                                                                                                    December  31,          March  31,
                                                                                                            2006                      2006
                                                                                                    (Unaudited)            (Audited)

        ASSETS
        Current  assets:
            Cash  and  cash  equivalents                                          $161,037                $81,588
            Short-term  investments                                                    84,955                  68,949
            Accounts  receivable,  net                                              119,092                115,715
            Inventories                                                                        121,699                116,782
            Other  current  assets                                                        20,731                  19,542
                Total  current  assets                                                  507,514                402,576

        Property  and  equipment,  net                                            377,390                341,293
        Goodwill                                                                                  115,443                117,218
        Investment  in  Jazz  Semiconductor,  Inc.                        25,400                  59,265
        Long-term  investments                                                                636                        584
        Intangible  assets,  net                                                          9,328                  10,849
        Other  assets                                                                              9,709                    3,658
                Total  assets                                                            $1,045,420              $935,443

        LIABILITIES  AND  SHAREHOLDERS'  EQUITY
        Current  liabilities:
            Accounts  payable  and  accrued  liabilities            $107,570              $102,772
            Other  short-term  liabilities,  net                                4,153                        260
            Total  current  liabilities                                            111,723                103,032

        Long-term  debt,  net                                                            246,358                226,876
        Other  long-term  liabilities                                                7,301                    6,178
            Total  liabilities                                                            365,382                336,086

        Shareholders'  equity:
            Total  shareholders'  equity                                          680,038                599,357

        Total  liabilities  and  shareholders'  equity        $1,045,420              $935,443
 

Web site: http://www.rfmd.com/



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