In a move to cut costs, RF-chip maker Anadigics Inc. is moving towards a new "hybrid"' manufacturing model. Anadigics will continue to make products within its own fabs, but the company will now use third-party foundries, such as TSMC and Win Semiconductors. At the same time, Anadigics has yet to move forward with a previously-announced fab project in China.

On Monday, Anadigics and Taiwan's Win Semiconductors Corp., a pure-play gallium arsenide (GaAs) foundry, have formed an agreement for the design and manufacture of GaAs microwave monolithic integrated circuits (MMIC). Under the plan, Anadigics will use Win's foundry services. GaAs ICs are used in wireless handsets and data devices.

The foundry agreement complements the continued production of products at Anadigics' 6-inch GaAs manufacturing facility in Warren, N.J.. It also forms the cornerstone of the company's hybrid manufacturing strategy, which provides for a mix of internal and external manufacturing capability "to ensure customer demand can be met at all times,"' according to Anadigics (Warren, N.J.).

Last year, Anadigics reported that it would delay the previously-announced acceleration of the investment in a wafer fab in Kunshan, China. Some time ago, it entered into an investment contract under which it would build a new 6-inch, gallium arsenide (GaAs) fab in China. The company and the Kunshan New and Hi-Tech Industrial Development Zone (KSND) plan to jointly construct the fab in the city of Kunshan in the Jiangsu Province in China.

"The plan with (the) China fab now is pending," said Mario Rivas, CEO of Anadigics, in a statement provided by the company.

"Our manufacturing strategy has changed based on our future evaluation," he said. "We have upgraded (our) equipment and facilities to improve process capability, increase manufacturing efficiency and reduced environmental waste starting from 2009 in our fab in Warren, N.J. as well as to add foundry to our mix."

He elaborated on the "hybrid" strategy. "In our new plan, we expect the GaAs foundry to add more flexibility. We will work with large foundries such as Win Semiconductor, a pure play GaAs foundry and TSMC," he said.

Over the years, rival RF Micro Devices Inc. has struck various foundry alliances. Another RF-chip maker, TriQuint Semiconductor Inc., provides its own chips and foundry services.

Like most RF chip makers, Anadigics is seeking to cut costs. It recently reported second quarter 2009 net sales of $31.5 million, an increase of 3 percent sequentially and a decrease of 61 percent from the second quarter of 2008. GAAP net loss for the second quarter of 2009 was $14.3 million, or minus $0.23 per share.