RALPH QUINSEY – TRIQUINT SEMICONDUCTOR, INC. (TQNT)
CEO Interview - published 12/17/2007

RALPH QUINSEY joined TriQuint Semiconductor, Inc., in July 2002 as President and 
Chief Executive Officer. From September 1999 to January 2002, Mr. Quinsey was 
with ON Semiconductor, a manufacturer of semiconductors for a wide array of 
applications, as Vice President and General Manager of the Analog Division. 
Prior to that, Mr. Quinsey was with Motorola, a manufacturer of semiconductors 
and communications equipment, from 1979 to September 1999, holding various 
positions including Vice President and General Manager of the RF/IF Circuits 
Division, which developed both silicon and gallium arsenide technologies for 
wireless phone applications. Mr. Quinsey received a BS degree in Electrical 
Engineering from Marquette University and is a member of the Maseeh College of 
Engineering and Computer Science Advisory Committee at Portland State 
University.

SECTOR – SEMICONDUCTORS

TWST: What is TriQuint Semiconductor?

Mr. Quinsey: TriQuint is an RF solutions provider; our tag line is connecting 
the digital world to the global network. If it's wireless or if there's radiated 
power involved, TriQuint is typically involved. We are unique in that we provide 
not just components and RF modules or SIPs, (system-in-a-package), we also 
provide technology to the marketplace. We are the largest commercial foundry 
supplier for gallium arsenide technologies in the world. TriQuint really has the 
broadest technology portfolio of all of our competitive landscape.

TWST: Give us an idea of what the market is today from your perspective. What 
are its dynamics? What's changing about who you are seeing as your customers and 
your users? What's changing about what they need?

Mr. Quinsey: About half of what we do is in the handset space, and in the 
handset space it's a very focused customer base. That's the fastest-growing part 
of TriQuint's business right now. About 35% of what we sell is to the networks 
and broadband space, and about 11% of our revenue is military. There are two 
drivers right now that are accelerating demand for our industry. One is the 
conversion to multi-band/multi-mode phones or the conversion to 3G data phones, 
if you will, and the other is data connections to computers through wireless 
LAN. Standards are changing to what's known as multiple-input, multiple-output 
architectures, which is doubling or tripling the RF content. In handsets, 
content is going from maybe $1.50 to $2 for a company like TriQuint up to $5, 
$6, in some cases $7, and a similar trend is going on in wireless LAN 
applications.

TWST: If we were speaking a year or so ago, what was the agenda? What was the 
list of things to do? What did you achieve?

Mr. Quinsey: Starting several years ago, we focused on growth in handsets to 
reach the scale and size that we needed to be cost effective in that market. In 
2006, TriQuint's revenue in that market grew in excess of 50%, and in the most 
recent quarter, Q3, we grew about 35%, so we are achieving that size and scale. 
About two years ago to about one-and-a-half years ago, we turned our attention 
to the non-handset markets and started to make investments there: investment in 
wireless LAN, investment in standard products, and we have been investing in RF 
power for infrastructure or base stations for cellular handsets. We expect those 
to be growth drivers for us in the coming year to two years.

TWST: Would you tell us about the agenda for the next 12 months? What would make 
that time frame a success?

Mr. Quinsey: Continuing to grow in handsets — that will remain a good driver for 
us, as well as growth in wireless LAN, standard products, and base station 
power, followed by growth in WiMAX. Right now, we are also expanding our 
participation in the military market from technology and components to RF 
modules. Over the next couple of years, I expect to see that gain traction and 
see growth there.

TWST: What's the competitive landscape today? What's changing about who you are 
seeing? What are some of the barriers to entry today for newcomers? What 
ultimately is a differentiator with TriQuint?

Mr. Quinsey: The competitive landscape is consolidating as well. RFMD, Skyworks 
and TriQuint are the top-three suppliers of gallium arsenide technologies and RF 
solutions for the industry. We are seeing the top players separate from the rest 
of the pack. The second- and third-tier suppliers are either being acquired or 
they are going out of business. What makes TriQuint unique is, again, the fact 
that we have the broadest technology portfolio by far and we are the only 
supplier of both gallium arsenide and filter components, both SAW and BAW 
acoustic wave devices. Those two filter technologies allow us to cover the 
spectrum from very low frequency up to 10 gigahertz. These are critical 
technologies for things like 3G phones and the growing broadband market.

TWST: What's the financial snapshot of TriQuint, balance sheet, P&L? What are 
the strengths? What are the items you are focused on for improvement? Are there 
any financing needs to address?

Mr. Quinsey: We have a target P&L structure that says 40% gross margin and about 
25% operating expense. Right now, we have reached our target on operating 
expense, we split that about 13% or 14% R&D, the rest SG&A. Gross margin 
improvement is our opportunity going forward. We finished last quarter at about 
33% gross margin non-GAAP. Equity compensation is the major difference between 
GAAP and non-GAAP and represents approximately 50-70 basis points. To reach our 
target of 40% we think we can gain several percentage points from utilization 
improvement. It gets us up to about 36.5%. I think we can get a couple more 
points from just improved efficiencies; yield improvements, less E&O and scale 
improvements. That will get us to maybe 38.5%. The last percent or two, we 
think, is going to be mix related, as we improve our mix both within handsets as 
well as non-handset growth. This model says at about $160 million to $170 
million a quarter, we could reach 40% gross margin. From a balance sheet 
perspective, we are very solid. We have no debt. We have about $175 million in 
cash and fairly well behaved balance sheet metrics otherwise.

TWST: As investors track and assess your performance, what are the key metrics 
that they should focus on as they track and assess your performance? What should 
matter to the investor? What matters to you?

Mr. Quinsey: What I think is important to investors is, first, growth and then 
followed by improved margin performance. Again, right now I think our markets 
can grow and our revenue can grow in our markets, targeting a 20% compound 
annual growth rate. The margin model gets us to a 40% gross margin at about $160 
million to $170 million revenue per quarter, which is within reach in a 
reasonable timeframe based on our growth rate. We're also focused on return on 
invested capital. We are targeting improvement there. We have the ability to 
leverage our assets, so our overall capital investment should be fairly moderate 
compared to our competition and still deliver good growth.

TWST: What should the investor understand about the technology and innovation 
pace? What's required in terms of R&D? What's new? What could be disruptive?

Mr. Quinsey: Some of the emerging technologies are a drive for wideband 
solutions. Our market requires solutions at many different frequencies and the 
ability to be able to cover several frequencies with one device is attractive. 
For example, a 3G handset may have seven bands of frequency to cover, so 
creating a wideband solution is critical for continued cost improvement. We've 
recently acquired a company in Colorado, Peak Devices, that has some very 
innovative and interesting technology in this area. Additionally, we continue to 
drive for overall size and cost reductions. We've implemented a copper stud 
interconnect technology that is now running in high-volume production, that 
reduces size and cost. Copper studs allow for smaller size and are better at 
taking heat out of the amplifier. Both of these attributes help lower device and 
equipment costs. I think this technology will be very important. Lastly, 
integration remains a goal, to improve performance and lower cost. We are a 
leader in what's known as E/D pHEMT technology for wireless LAN that allows us 
to integrate a complete RF front end for wireless LAN on a single piece of 
gallium arsenide.

TWST: What historically has been the shareholder base with TriQuint? Has that 
base undergone any changes?

Mr. Quinsey: Right now, our shareholder base is value oriented, transitioning to 
growth based. I think those that are technology savvy see the fact that TriQuint 
is truly a good value. Investors are starting to see the growth opportunities 
that the market offers for us.

TWST: In your discussions with the investment community and current investors, 
are there any recurring questions or misperceptions? Is the TriQuint story 
understood?

Mr. Quinsey: I think the most misunderstood part of our story is that we are the 
most diversified play in our space. The fact that half our business is handsets 
and half our business is non-handsets, and the fact that handsets, being margin 
challenged until we scale up, gains a lot of attention. We have very healthy 
margin revenue in wireless LAN, in base station, in cable, in point-to-point 
radio, and in military, typically much better than corporate average. As we grow 
handsets and leverage our assets, it's starting to expose the value embedded in 
our non-handset revenue.

TWST: Introduce us to your top-level management team, two or three of your key 
individuals, including yourself.

Mr. Quinsey: I've spent most of my career with Motorola. I left Motorola in 2000 
and went to ON Semiconductor, where I helped them start up an analog business, 
and then came to TriQuint in 2002. Glen Riley is leading our foundry business. 
Glen came to us through our optical business. Tim Dunn is the Vice President of 
the handset business. Tim spent the majority of his career at Intel, has a great 
passion for operational excellence, and has been driving our handset business 
now for little over a year. We recently brought Steve Buhaly in as the CFO. He 
has been with us less than two months now and has a real passion for driving 
operational excellence as well. I think the combination of Tim and Steve focused 
on our handset business is going to be one of the catalysts that will allow us 
to reach the 40% gross margin target. Brian Balut runs our networking business. 
Tom Cordner runs our military business. Todd DeBonis has been with us since 
2004, and he is our sales and customer service VP.

TWST: What's been involved in getting the company and its strategies aligned? 

Mr. Quinsey: I think the fundamental strategy of the corporation when I joined 
in 2002 was solid. I believe the company was distracted by trying to do too much 
at that time, so we focused the company on organic growth in handsets, growth 
through innovation using our technology strength, and providing solutions that 
either improved the performance or reduced the cost of our customers' 
applications. Following the handset success, we started to expand the strategy 
for RF solutions in some of our other markets, markets that may not be as 
explosive for growth, but offered better margin. Those markets being the ones I 
discussed earlier, wireless LAN, base station power, standards products, and 
military. Focusing on those components of the business, I think, will carry us 
forward quite successfully. If you look at the overall strategy for the company, 
handsets drive volume, the networking and broadband space drives margin and the 
military space drives technology development. For example, gallium nitride, a 
new technology platform under development is due, in part, to a five year DARPA 
contract of approximately $30 million focused on learning how to build that 
technology effectively. Lastly, the foundry business is how we keep an eye on 
emerging markets. It allows us to stay abreast of emerging applications. If 
there's something going on in the RF world, we typically hear about it through 
access to TriQuint technology. It's also a good opportunity for us to keep our 
eye on M&A opportunities.

TWST: With respect to mergers and acquisitions, what are the criteria, the 
needs, the availability for that type of growth?

Mr. Quinsey: We have been acquisitive throughout our history, most recently the 
Peak acquisition. The Peak acquisition represents the ideal target for TriQuint. 
It's not so large that it's overwhelming; that business was about $5 to $6 
million a year in revenue. It's a good solid profitable business with good 
margin structure and it's set to grow. The additional driver for us to do the 
acquisition was the fact that they also had a fundamental technology 
breakthrough. This innovation is a wide bandwidth technology that is very 
exciting. We continue to look for those opportunities. It's more likely to be a 
non-handset acquisition than a handset acquisition. We typically target a 
smaller business that we can integrate appropriately and one that brings 
fundamental technology to the corporation.

TWST: What compels investors to include TriQuint as part of their current 
portfolios and part of their longer-term investment strategies?

Mr. Quinsey: First of all, our industry is seeing stronger demand. The tide is 
rising, primarily due to two causes: 3G growth, as the world transitions to data 
phones, and wireless LAN with the architectural change that I discussed. 
Secondly, TriQuint has the broadest technology portfolio in the industry and is 
the only supplier with in-house high-volume GaAs and filter supply. Technology 
capability is critical for capturing these markets. Currently, if you do a 
simple calculation of our valuation, I would argue that we are about 20% to 25% 
below our fair value, using about a 17 p/e. We have $1.20 per share in cash, 
plus we guided next quarter for about $0.09 earnings per share, so I think we 
are just a good value for investors. Q4 revenue is guided up and our earnings 
are guided up sequentially. Although we are not guiding for next year, I expect 
it to be both a top line and a bottom line growth year for us. Finally, we are 
focused on improving gross margin. I think we have the growth engine going and 
we understand what it takes to get our gross margins up to 40% with improved 
utilization, efficiencies, and through some improved mix.

TWST: Thank you. (DWA)

RALPH  QUINSEY 
President & CEO
2300 NE Brookwood Parkway 
Hillsboro, OR 97124
(503) 615-9000
(503) 615-8900
www.triquint.com
e-mail: info-finance@tqs.com

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