Agere Systems and RF Micro Devices announced Thursday that the two companies will work together to develop and manufacture chips for mobile phones. The deal guarantees RF Micro access to chip manufacturing capacity at Agere's Orlando, Fla., facility. RF Micro will invest $58 million over two years toward manufacturing equipment and upgrading clean-room space in the plant. RF Micro will own the equipment and have its own engineers working with Agere employees.
RF Micro expects the first product and revenue from the arrangement to come in the fourth quarter of this year, and estimates that the venture will generate more than $100 million in revenue after its completion. The company anticipates no significant impact on earnings for fiscal year ending on March 31, 2002. RF Micro also accounted for the investment in previous financial guidance for the fiscal year. The companies will develop chips for wireless LAN (local area network) equipment and Bluetooth-enabled equipment. Bluetooth is a technology that allows devices within 30 feet of one another to communicate without wires.