Wolfson Microelectronics (WLF) saw third-quarter revenues surge by 31 per cent to $53m (£33m), propelled by sales of its chips into mobile phones (up 71 per cent) and tablets (an 88 per cent jump). Revenue growth helped the Edinburgh-based semiconductor supplier post its first quarterly pre-tax profit in two years, at $1.6m, versus a $2.9m loss the previous quarter.
Audio hubs form the bulk of Wolfson's business, generating £40m of revenue during the third quarter. Sales of mobile audio hubs leapt 53 per cent, helped by Samsung's Galaxy III LTE smartphones and some Galaxy Note devices shipping with Wolfson's chips for the first time. The South Korean manufacturer accounted for about a third of Wolfson's sales during the three months to the end of September.
Chief executive Mike Hickey envisages strong growth too in micro-electro-mechanical-systems (MEMS) microphones. Currently accounting for around 3 per cent of revenue, Mr Hickey sees that figure jumping to 6-8 per cent in the next quarter, then to 10 per cent during 2013.
Wolfson's third-quarter was not all good news, though. Gross margin fell from 49.7 per cent to 47.5 per cent, although Mr Hickey maintains this is a temporary blip. A ramp up in shipments of a high-volume product triggered a price reduction clause earlier than expected in the cost reduction cycle. Extra costs associated with increased production of MEMS microphones were also a factor. "We should have gross margins back to around 50 per cent within a couple of quarters," says Mr Hickey.
The profit famine at Wolfson can be traced back to 2008 when Apple ditched it. A teardown of Apple's new Lightening adapter for the iPhone 5, however, revealed a Wolfson chip nestling inside. Re-connecting with Apple is another welcome development for the Scottish outfit.
