Volume production of Cirrus Logic’s CS42L73 audio codec chips...
Volume production of Cirrus Logic’s CS42L73 audio codec chips will start late this year with a goal of producing smartphone-related revenue in second half 2011, company executives said Tuesday on a quarterly earnings call. The new chip will be critical…
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for Cirrus Logic as it seeks to expand its audio business beyond Apple, which accounted for 34 percent of the company’s Q1 revenue of $81.9 million, up from 27 percent of $37.5 million a year ago. Cirrus Logic, which first gained design wins for Apple’s iPod four years ago, custom designed the 338SO589 audio codec that’s featured in Apple’s iPad and iPhone 4. Cirrus Logic doesn’t sell the chip directly to Apple, but rather one of its contract manufacturers, Futaihua Industrial, which accounted for 21 percent of Cirrus’ Q1 sales, according to a 10Q filed with the SEC. The supply agreement with Cirrus’ “largest customer” was the “result of several years of cultivation,” said CEO Jason Rhode, who didn’t refer to Apple by name. Sales to distributor Avnet represented 29 percent of Cirrus’ revenue, the 10Q stated. Cirrus Logic is sampling an audio codec with a “tier one” Japanese supplier and a custom audio amplifier for car audio applications, CEO Jason Rhode said. In addition to the audio codec, Cirrus Logic is sampling the CS35111 3-watt audio amplifier for smartphones, he said. Cirrus’ Q1 net income soared to $17.6 million from $221,000 with a sharp rise in sales. Audio products sales jumped to $53.9 million from $24.7 million a year earlier, while energy chips, including those for power meters, rose to $27.9 million from $12.7 million. Gross profit soared to $46.7 million from $19.5 million. Cirrus’ operating expenses rose to $29.2 million from $26.9 million as capital spending increased to $4 million from $1 million as production capacity expanded, company officials said. Cirrus also made a $500,000 payment during the quarter to Fortis Communities-Austin from which it’s buying a 1.84-acre lot to build a new 140,000-square-foot headquarters. The headquarters, which will replace a 100,000-square-foot facility in Austin, Texas, is expected to open late summer 2012, a company spokesman said. Cirrus will complete the $9.62 million purchase of the land in fiscal 2011, the company said. As of June 26, Cirrus had $6.4 million in restricted cash for obligations related to lease for its current headquarters that expires in September 2011, the company said. Silvaco Data Systems also has until Aug. 6 to file a petition with the California Supreme Court. Silvaco sued Circuit Semantics, which supplied Cirrus with software design tools, for misappropriation of trade secrets and unfair business practices.