UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

þ    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended April 2, 2005

OR

o    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                             to                            

Commission file number 0-22511

RF MICRO DEVICES, INC.

(Exact name of registrant as specified in its charter)

NORTH CAROLINA

(State or other jurisdiction of incorporation or organization)

56-1733461

(I.R.S. Employer Identification No.)

7628 Thorndike Road Greensboro, North Carolina 27409-9421, (336) 664-1233

(Address of principal executive offices, zip code and registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, no par value

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ     No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     þ

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes þ     No o

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $1,229,989,220 as of October 1, 2004. For purposes of such calculation, shares of common stock held by persons who hold more than 10% of the outstanding shares of common stock and shares held by directors and officers of the registrant and their immediate family members have been excluded because such persons may be deemed to be affiliates. This determination is not necessarily conclusive.

There were 188,107,321 shares of the registrant’s common stock outstanding as of May 27, 2005.

DOCUMENTS INCORPORATED BY REFERENCE

The registrant has incorporated by reference into Part III of this report portions of its proxy statement for its 2005 annual meeting of shareholders to be held on August 2, 2005.

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RF Micro Devices, Inc.

Form 10-K

For The Fiscal Year Ended April 2, 2005

Index.

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RF Micro Devices, Inc. and Subsidiaries Annual Report on Form 10-K 2005

Forward-Looking Information

This report includes “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, representations and contentions and are not historical facts and typically are identified by use of terms such as “may,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” and similar words, although some forward-looking statements are expressed differently. You should be aware that the forward-looking statements included herein represent management’s current judgment and expectations, but our actual results, events and performance could differ materially from those expressed or implied by forward-looking statements. We do not intend to update any of these forward-looking statements or publicly announce the results of any revisions to these forward-looking statements, other than as is required under the federal securities laws.

The following discussion should be read in conjunction with, and is qualified in its entirety by reference to, our consolidated financial statements, including the notes thereto.

PART I

We use a 52- or 53-week fiscal year ending on the Saturday closest to March 31 of each year. Fiscal years 2005 and 2003 were 52-week years and fiscal year 2004 was a 53-week year. Our other fiscal quarters end on the Saturday closest to June 30, September 30 and December 31 of each year. For purposes of this Annual Report on Form 10-K, we describe each fiscal year as having ended on March 31 and the first three quarters of each fiscal year are described as having ended on June 30, September 30 and December 31.

Unless the context requires otherwise, references in this report to “RF Micro,” the “Company,” “we,” “us” and “our” refer to RF Micro Devices, Inc. and its subsidiaries on a consolidated basis.

Introduction

RF Micro Devices, Inc. was incorporated under the laws of the State of North Carolina in 1991. We design, develop, manufacture and market proprietary radio frequency (RF) components and system level solutions (“products”) primarily for wireless communications products and applications. We are the leading supplier of power amplifiers (PAs), one of the most critical radio frequency components in cellular phones. Our aluminum gallium arsenide (AlGaAs) heterojunction bipolar transistor (also referred to as GaAs HBT) process technology offers distinct advantages over other technologies for the manufacture of current and next-generation PAs. Our products are included primarily in cellular phones, base stations, wireless local area networks (WLANs), cable television modems and global positioning systems (GPS). The majority of our revenue is derived from sales of products designed for cellular phones. We offer a broad array of products including amplifiers, mixers, modulators/demodulators, Bluetooth® components and transmitters, receivers and transceivers that represent a substantial majority of the products required in wireless subscriber equipment. These products perform the transmit and receive functions that are critical to the performance of wireless devices.

We design and manufacture products that are fabricated using multiple semiconductor process technologies. These technologies include GaAs HBT, GaAs metal-semiconductor field-effect transistor (MESFET), indium gallium phosphide (InGaP) HBT, silicon bipolar transistor, silicon complementary metal-oxide-semiconductor (CMOS), silicon BiCMOS (integration of bipolar transistors and CMOS) and silicon germanium (SiGe) BiCMOS. We are continuing to invest in the development of integrated circuits utilizing gallium nitride (GaN) and currently expect to commence commercial production of GaN-based products during calendar year 2007. We will begin production shipments of switching devices in fiscal 2006 using our GaAs pseudomorphic high electron mobility transistor (pHEMT) process. Handset manufacturers try to maximize trade-offs between performance and cost. Our approach to using multiple semiconductor process technologies allows us to offer customers products that fulfill their performance, cost and time-to-market requirements. We call this approach to business Optimum Technology Matching®.

Our products are purchased by essentially all of the leading original equipment handset manufacturers (OEMs) such as Nokia Corporation, Motorola, Inc., Samsung Electronics Co., Ltd., LG Electronics, Inc., Siemens, A.G., Sony Ericsson Mobile Communications, Sanyo Electric Company, Ltd., NEC Corp. and DBTel Networks. In addition, our products are purchased by leading original design manufacturers (ODMs) such as Arima Communications Corporation, Curitel Communications, Inc. and its affiliate Pantech, Inc., BENQ Corporation and Lite-On Technology Corporation. ODMs offer lower-cost wireless devices for resale by OEMs.

A key element of our business strategy involves the potential acquisition of businesses, assets, products or technologies that allow us to reduce the time required to develop new technologies and products and bring them to market, complement our existing product offerings, expand our market coverage, increase our engineering workforce and enhance our technological capabilities.

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RF Micro Devices, Inc. and Subsidiaries Annual Report on Form 10-K 2005

During fiscal 2003, we entered into a strategic relationship with Jazz Semiconductor, Inc. (Jazz), a privately-held RF and mixed signal silicon wafer foundry, for silicon manufacturing and development. As a part of the strategic relationship, we invested $60.0 million in Jazz, which resulted in an approximate 11 percent ownership interest. Within the strategic relationship, we obtained a committed low cost source of supply for wafers fabricated utilizing Jazz’s silicon manufacturing processes and the ability to collaborate with Jazz on joint process development and the optimization of these processes for fabrication of next-generation silicon products.

In May 2004, we completed the acquisition of Silicon Wave, Inc. Silicon Wave’s Bluetooth® product portfolio included CMOS radio solutions as well as highly integrated single-chip CMOS solutions, which included radio, baseband processor, processor core and memory — or what is commonly referred to as system-on-chip (SoC). Our CMOS Bluetooth® solutions reduce the requirements for external flash memory and minimize the use of external RF components. This represents a cost and size advantage compared to competitors’ solutions. Our Bluetooth® products are currently in production and in use supporting multiple applications, including cellular handsets, headsets, PC peripherals and consumer electronics devices.

We report information as one operating segment. Statement of Financial Accounting Standards No. 131, “Disclosures about Segments of an Enterprise and Related Information” (SFAS 131), established standards for the way that public companies report information about operating segments in annual consolidated financial statements. Although we had three business units as of March 31, 2005 (Cellular, Wireless Connectivity and Infrastructure), we report information as one operating segment pursuant to the aggregation criteria set forth in SFAS 131.

As part of our cellular business we have expanded our product portfolio to include other radio functions. For example, we entered the transceiver market with our POLARIS^tm TOTAL RADIO^tm transceiver solutions, which provide handset manufacturers with a reduced-size, highly integrated radio solution that helps reduce component count and total cost while providing superior radio performance, thereby enabling handset manufacturers to add additional functionality and content such as GPS, WLAN, MP3, televisions, e-mail, FM radios and cameras. We believe our POLARIS^tm 2 TOTAL RADIO^tm transceiver solution for Enhanced Data for Global Evolution (EDGE) handsets provides EDGE functionality with fewer components than competing approaches through a unique and innovative architecture called open-loop large signal polar modulation. During the third quarter of fiscal 2005, we reached volume production shipments of our POLARIS^tm TOTAL RADIO^tm transceiver solution for global system for mobile communications (GSM)/general packet radio system (GPRS) handsets and our POLARIS^tm 2 TOTAL RADIO^tm transceiver solution for EDGE handsets.

We believe that a trend in the market for GSM/GPRS and EDGE cellular handsets is the transition from the PA module to the highly integrated transmit module. By combining the PA and antenna switch, the transmit module reduces the component count in cellular phones. During fiscal 2005, we focused our research and development efforts on this transition and expect shipments to begin in fiscal 2006.

Our wireless connectivity business focuses on developing and producing components for WLAN and developing and producing solutions for Bluetooth® and GPS. During the first quarter of fiscal 2005, the acquisition of Silicon Wave enhanced our Bluetooth® product portfolio. We are continuing to develop a highly integrated SoC Bluetooth® solution that features Enhanced Data Rate (EDR) and utilizes 0.13 micron CMOS. This product consumes less power than current Bluetooth® products and, as a result of its small size, low power consumption and low materials cost, is specifically designed for mobile phone applications. We have recently licensed Near Field Communications technology for cellular handset applications, which we believe will enable handsets to replace credit cards for point of sale financial transactions. This technology provides secure wireless transactions that prevent fraud and minimize identity theft. We also recently announced production shipments of the industry’s first sole-sourced “converged” Bluetooth®/GPS solution.

In the fourth quarter of fiscal 2005, we discontinued our internal WLAN chipset development efforts, which were focused on a two-chip solution comprised of an all CMOS integrated baseband and media access controller (MAC) chip and an all CMOS transceiver for 802.11 a/b/g. We took this action as a result of our difficulties in bringing competitive WLAN chipset solutions to the market in a timely manner. We are continuing to invest in our WLAN component business, which includes transceivers for gaming and other applications as well as 802.11 PAs, radios and front-end modules for all WLAN applications.

Our infrastructure business is comprised of components for wireless base stations, which historically have included a variety of small signal devices including adjustable gain control (AGC) amplifiers, gain blocks, multi-stage amplifiers, low noise amplifiers (LNA) and quadrature modulators. Recently, we introduced infrastructure pre-driver PAs that leverage thermal enhancements that we have made to our GaAs process, which we believe enables superior efficiency. We expect production shipments of these products during fiscal 2006. We are also working to commercialize our GaN RF power transistor process, which we plan to use to design high power amplifiers (HPAs) specifically for use in 2.5G and 3G wireless base stations. In addition,

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RF Micro Devices, Inc. and Subsidiaries Annual Report on Form 10-K 2005

during fiscal year 2005 we contracted with the U.S. Department of Defense to conduct research and development on GaN technology. We expect to transition our GaN semiconductor processes from our research and development facility in Charlotte, North Carolina, to one of our wafer fabrication facilities in Greensboro, North Carolina, during fiscal 2006.

Industry Overview

The wireless communications industry has grown rapidly over the past 20 years as a result of technological advances, changes in telecommunications regulations and the allocation and licensing of additional radio spectrum. These factors have led to the emergence of competing wireless communications businesses, the expansion of wireless services into new markets such as China and India and the continuing development of new wireless applications and services. Higher data access speeds, multimedia capabilities, simultaneous access to multiple services and global roaming are now common features on wireless devices.

The wireless communications industry growth is being fueled by several sources. The availability and mass deployment of additional telecommunications standards, such as GPRS, EDGE, Code Division Multiple Access Next Generation (CDMA-1X), Wideband Code Division Multiple Access (WCDMA), IEEE 802.11 for WLANs and Bluetooth®, have increased the overall size of the market. New wireless products with improved features, such as telephones with cameras, Bluetooth® peripherals, personal digital assistants (PDAs), smartphones, Personal Computer (PC) Cards and GPS, have contributed to the industry growth. In addition, the emergence of new communications services and technologies, such as Voice Over Internet Protocol (VOIP) and public area “hot spots” that facilitate wireless Internet connectivity through the use of WLANs, has increased the demand for wireless communication products. Moreover, technological advances throughout the entire supply chain have reduced barriers to entry and enabled broad access to entry level voice-only cellular phones. Although voice-only cellular phones initially were the primary end-use application for our products, we now supply products to rapidly growing segments in the wireless communications industry focused on data communication, including WLANs and next-generation cellular handsets. The total available market for wireless devices is anticipated to expand as the industry moves to data-intensive applications such as multimedia messaging service, gaming and video. Higher data rate standards require higher functionality phones and in some cases the convergence of multiple standards, thereby promoting the development and manufacturing of new feature-enhanced wireless devices. At the same time, the market for lower-tier voice-only phones requires low-cost, less complex optimized wireless devices that can be brought to market quickly. Such phones are especially appropriate for new users in developing nations who historically have not been able to afford a phone. If this market can be tapped, the potential for phone sales could increase significantly.

The industry trend is to develop new wireless communications devices for operation under air interface standards with higher data rates. Classic analog and digital communication standards used primarily for voice, such as Advanced Mobile Phone Service (AMPS), GSM, Time Division Multiple Access (TDMA) and CDMA are being replaced in the design cycle by the emergence and deployment of additional telecommunications standards, including GPRS, EDGE, CDMA-1X and WCDMA. The handsets designed for each air interface standard generally require unique radio frequency and baseband integrated circuit solutions and these solutions become more complex and technically challenging as data rates increase. Similarly, Bluetooth® has evolved to a higher data rate, and WLANs, which function under the IEEE 802.11 standards, are migrating to higher data transmission rates and higher frequencies. Additional communications standards make it more difficult for OEMs of subscriber equipment to develop and supply all of the required components in a timely and cost-effective manner. For this reason, some OEMs have begun to rely on third party value-added technology providers that have the component- and systems-level expertise to design and the captive production capacity to supply these solutions. This technology-outsourcing trend is particularly evident in the radio frequency segment of the equipment due to scarcity of engineers and the design complexity of the radio technologies. Technology outsourcing has materialized both in OEMs’ reliance on suppliers to provide more integrated RF solutions and OEMs’ use of ODMs and contract manufacturers for handset production.

In addition, due to the recent increases in handset functionality, OEMs are utilizing their in-house resources to focus on the addition of newly-available hardware and software functions, such as FM radios, MP3 players, cameras, televisions, GPS, e-mail and Java-based applications. As a result, OEMs have increased their reliance on third party value-added technology providers since they have redeployed or reduced in-house research and development resources. Therefore, we have continued to sharpen our focus on high performance, integrated solutions, and we expect to increase our market share by expanding our footprint with these integrated products, such as our single-chip complete Bluetooth® solution, the expansion of our PowerStar® family of PA modules and the continued development of our POLARIS^tm TOTAL RADIO^tm solutions.

The emergence of technological advances has led to the rapid growth of the wireless communications industry, and the industry continues to evolve at a fast pace. As this market changes, new communications standards emerge, new competitors enter the market,

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RF Micro Devices, Inc. and Subsidiaries Annual Report on Form 10-K 2005

new products, applications and services become the primary forces for growth and new risks are presented. We believe this dynamic market presents us with significant opportunities to accomplish our business objectives.

Strategy

Our goal is to be the premier supplier of low-cost, high-performance integrated components and system level solutions for applications that enable wireless communications. To meet this goal, we have developed a strategy centered on customer relationships, technology leadership and manufacturing excellence that we believe will help us achieve better than industry average revenue and earnings growth over the long-term. The key elements are:

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RF Micro Devices, Inc. and Subsidiaries Annual Report on Form 10-K 2005

Markets

We design, develop, manufacture and market our products to both domestic and international OEMs and ODMs for commercial applications primarily for wireless markets such as cellular handsets, base stations and WLAN equipment.

Cellular

In cellular applications, calls are placed through handheld subscriber devices by making a connection with a base station via radio frequency channels.

Base Stations

Base stations installed across an area create a wireless telecommunications network that enables cellular telephones to communicate with one another or with wired telephones. Each base station is equipped to receive and send radio frequency signals through an antenna, as well as amplify outgoing signals to ensure the transmission reaches its destination without fading. For both existing and future generation wireless technologies, these base stations provide the system backbone and must be in place before cellular telephones can be used.

Wireless Networks

Wireless networking involves the transmission and reception of data such as e-mail, faxes, computer files and Internet content by desktop and portable computers via wireless radio frequency links rather than wired lines. Network coverage ranges from WLANs, which might be found within a business or single building, to metropolitan area networks, which would be limited to a defined metropolitan or geographic area, to wide area networks, which connect individuals and work groups over larger geographic areas.

Other Markets

We also supply custom components for other applications. In the wireless market, we supply components for wireless local loop systems, cordless telephony, portable gaming systems, industrial radios, satellite radio, GPS, security systems, utility meter reading systems, two-way paging, monitoring devices, interactive toys, home networking, PC modem cards, keyless entry and handheld devices used for point-of-sale, bar coding and other applications. In other markets, we supply components for set-top converter boxes and cable modems and for optical transceivers and transponders. We also market various components for satellite, microwave communications, and certain wired applications.

Manufacturing, Packaging and Testing

As part of our total quality program, the Company’s quality management system is registered to ISO 9001 and the Company’s environmental management system is registered to ISO 14001. This means that a third party independent auditor has determined that these systems meet the requirements developed by the International Organization of Standardization, a non-governmental network of the national standards institutes of over 150 countries. The ISO 9001 standards provide models for quality assurance in design/development, production, installation and servicing and the ISO 14001 standards provide a structure within which a company can develop or strengthen its quality system for managing its environmental affairs.

For the majority of our products, the production process begins with GaAs, silicon or other semiconductor materials, called wafers. GaAs products incorporate a transistor layer that is grown on the wafer using a molecular beam epitaxy (MBE) process in our MBE facility. These wafers are sent to our wafer fabrication facility where we isolate the transistor layer and interconnect the transistors according to the circuit design. The wafers are then singulated into individual die. A die is a rectangular piece of semiconductor material upon which electronic circuitry has been created. The circuitry determines the specific function that the die is intended to perform and is connected to the outside world by means of a microelectronic package and small wires. Semiconductor die are manufactured while still part of the wafers, which range in diameter from 100-300mm. The circuitry is printed on the wafers using microscopic imaging technology and thin films of deposited materials. Upon completion of the manufacturing process, die are cut individually from the wafer and must be assembled, or packaged, and then the final product must be tested. Packaging can come in the form of either a simple lead frame package or a more complicated multi-chip module. Our products are 100 percent parametric tested based on the product specifications and, after testing, are prepared for shipment through a tape and reel process.

We have one MBE facility for the manufacture of our GaAs devices, which is located in Greensboro, North Carolina. We have two GaAs wafer fabrication facilities located in Greensboro, North Carolina. During fiscal 2005, we manufactured substantially all of our GaAs products at these fabrication facilities. Our first wafer fabrication facility is a four-inch wafer production facility and our second wafer fabrication facility is a six-inch wafer production facility. In fiscal 2005, we invested approximately $63.0 million to increase the capacity in our MBE and wafer fabrication facilities in order to meet our customers’ forecasts. Through the use of six-inch wafers, we have reduced our costs through improved operating and raw material usage efficiencies. During fiscal 2006, we expect to continue to add capacity to our six-inch fabrication facility which will allow us the opportunity to utilize our existing investment in our four-inch facility towards the development of alternative components, such as the design and manufacturing of pHEMT switches and GaN-based products.

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RF Micro Devices, Inc. and Subsidiaries Annual Report on Form 10-K 2005

Our original GaAs HBT process technology was licensed to us by Northrop Grumman Space Technology (formerly TRW Space & Electronics, Inc.) (Northrop) in 1996 to design and manufacture products for commercial wireless applications. The GaAs HBT and MBE patent rights expressly referenced in the license agreement expire at various times between March 2007 and July 2016. The license agreement provides that Northrop will offer to us, on the same terms as are offered to third parties, certain future non-HBT related technologies that it develops for a period of 10 years following June 15, 1998. We have agreed to share with Northrop any modifications or improvements that we make in the technology or the products developed therefrom, and to grant Northrop a non-exclusive, royalty-free license to use any of these modifications or improvements in applications outside our field of use. Upon any termination of the license agreement because of a default by either party, our rights to Northrop’s technologies would cease. We are continually improving our GaAs HBT processes and manufacture substantially all of our own GaAs HBT products at our wafer fabrication facilities. We also are continuing to explore additional process technologies.

We currently use several international and domestic assembly suppliers, as well as our internal assembly facility in Beijing, China (which was established and qualified during fiscal 2005), to package and assemble our products. All of our key vendors and suppliers are compliant with applicable ISO 9000 or QS 9000 series specifications, which means that their operations have in each case been determined by auditors to comply with certain internationally developed quality control standards. We qualify and monitor assembly contractors based on cost and quality. These contractors typically provide us with per-unit pricing. Our internal assembly facility provides internal module packaging capabilities and we plan to continue ramping production at this facility in fiscal 2006. We believe the use of our internal assembly operation will result in cost reductions and better inventory management and control of our work-in-process inventory.

We currently have our own test, tape and reel facilities located in Greensboro, North Carolina, and Beijing, China, and we also utilize contract suppliers and partners in Asia to test our products. During fiscal 2005, we continued to shift a portion of our test, tape and reel functions from our Greensboro location to our Beijing facility. We expect to increase our reliance on our Beijing facility as well as our utilization of contract suppliers and partners in Asia for test, tape and reel in order to minimize the movement of inventory, which improves cycle time and results in lower costs.

During fiscal 2005, our operations management team focused on improvements in supply chain cycle times and strategic supplier relationships that have enabled us to more tightly control the procurement and management of raw materials. During fiscal 2006, we plan to continue to streamline the configuration of our supply chain to minimize the geographical movement of material during the manufacturing process.

Products and Applications

We offer a broad range of standard and custom-designed RF components and system level solutions. Custom-designed products are usually developed for volume production orders from large OEMs. Custom products are normally manufactured on an exclusive basis for a negotiated period. We attempt to convert custom products into standard products in order to broaden our customer base and leverage our design and product expenditures. At March 31, 2005, we offered over 375 products in the following categories:

Power Amplifiers

PAs are our largest product class, representing approximately 44 percent of our products offered during fiscal 2005. PAs provide signal amplification in the transmitter section of a wireless system in order to boost a signal through the antenna. PAs operate at different frequencies, power levels and air interface standards and generally are classified either as linear amplifiers, which add a minimum amount of distortion to the shape of the input signal, or non-linear amplifiers, which are used in analog devices. PAs are often the most critical RF component because (1) they can have a significant effect on the reliability of the handset, (2) they are difficult to design and implement, (3) they consume a significant amount of battery power in a handset, which impacts talk time, and (4) they generally dissipate the greatest amount of heat.

Gain Blocks (General Purpose Amplifiers)

Gain blocks are simple general-purpose amplifiers that boost signals over a broad frequency range. They are used for amplifier applications whenever noise is not a concern and whenever a signal’s strength has been diminished by processing through a filter or other component. Gain blocks accounted for approximately 21 percent of our products offered in fiscal 2005.

Low-Noise Amplifiers/ Mixers (Front-Ends and Mixers)

Low-noise amplifiers/mixers accounted for approximately 9 percent of our products offered in fiscal 2005. A low-noise amplifier is a device in the receiver section of a wireless system that receives signals from an antenna at extremely low microvolt levels and amplifies the signals by a factor of approximately 10 to 1,000 with the addition of as little interference as possible. Low-noise amplifiers are commonly integrated into circuits with mixers (also referred to as “down-mixers” or “down converters”), and this combination generally is referred to as a “receiver front end.” Mixers accept the filtered output from the low-noise amplifiers, which is typically at a high frequency and

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RF Micro Devices, Inc. and Subsidiaries Annual Report on Form 10-K 2005

difficult to process, and mix it with a local oscillator signal to produce a lower intermediate frequency (IF) signal, which is easier to process.

Transmitters, Receivers and Transceivers

Single chip transmitters and receivers send and receive wireless signals. Transceivers are highly integrated circuits that combine transmitters with receivers into a single device. This category accounted for approximately 7 percent of our products offered during fiscal 2005.

Quadrature Modulators/ Demodulators

Quadrature modulators are devices in the transmitter section of a wireless system that combine digital information with a radio frequency signal by varying the phase and amplitude of the signal so that the resulting signal can be transmitted. Quadrature demodulators reverse this process in the receiver section by taking received RF signals and recovering the embedded digital information for further processing. Approximately 5 percent of our products offered in fiscal 2005 were quadrature modulators/demodulators.

Bluetooth® Radio Processors, Radio Modems and Software

Bluetooth® is an open specification for short-range wireless communication of voice and data between devices such as mobile phones, wireless headsets, personal computers, PDAs and other portable devices. Bluetooth® technology enables devices to synchronize and exchange information with other Bluetooth® enabled devices at speeds of up to 3 Mbps, while operating in 2.4 GHz band. Our family of single-chip Bluetooth® devices and software provides a complete solution for manufacturers who wish to integrate Bluetooth® into their products. This category accounted for approximately 5 percent of our products offered during fiscal 2005.

Global Positioning System Receiver/ Chipset

A GPS receiver processes signals from visible GPS satellites broadcasting RF navigation information. The GPS receiver works with a wide variety of end products including handheld, marine and in-vehicle automotive devices. A GPS chipset enables systems to receive signals from GPS satellites using signal-processing techniques that produce highly accurate, smoothed navigation data. The chipset is suited to a broad range of applications including in-vehicle systems, recreational navigation and asset location services. This category accounted for approximately 2 percent of our products offered during fiscal 2005.

Intermediate Frequency Components

In the receive function of a typical handset, high frequency RF signals are converted into lower frequency IF signals by the low noise amplifier/mixer and then to baseband outputs, such as voice. In the transmit function, baseband inputs are converted from analog to digital form and processed through the IF range to the higher radio frequency before transmission through the antenna. Our IF devices include digitally controlled IF amplifiers, which amplify baseband signals after they have been converted from analog to digital form, and IF amplifiers with automatic gain control and received signal strength indicators, which are used for IF-to-baseband conversion in the receive mode. IF components accounted for approximately 2 percent of our products offered during fiscal 2005.

Other

The remaining 5 percent of products offered in fiscal 2005 include products such as attenuators and switches, voltage controlled oscillators and linear cable television amplifiers.

Raw Materials

We purchase numerous production component parts, such as surface mount devices, and substrates from external suppliers. We currently use independent foundries to supply all of our silicon-based requirements and a portion of pHEMT product requirements. The use of external suppliers involves a number of risks, including the possibility of material disruptions in the supply of key components and the lack of control over delivery schedules, manufacturing yields, quality and fabrication costs. In order to alleviate our dependence on external suppliers, we are integrating into our semiconductor die the functionality formerly fulfilled by many of the surface mount devices. However, we continue to aggregate increased functionality and new technologies into our products, which increases our dependence on external suppliers for products that we do not currently manufacture.

Customers

Sales to our largest customers, Nokia and Motorola, were approximately $224.1 million and $60.6 million, respectively, in fiscal 2005, which represented approximately 35 percent and 10 percent, respectively, of our revenue.

We have agreed to provide Nokia with access to certain RF technologies and to our GaAs HBT wafer fabrication facilities, and Nokia has agreed to provide us with rights to bid for and supply Nokia’s requirements for certain products. This arrangement does not obligate Nokia to purchase any additional products from us, and there can be no assurance that Nokia will remain a significant customer of ours or that this relationship will continue.

During fiscal 2005, we have continued to diversify our customer base and, with the predicted growth of our non-handset business during fiscal 2006, we expect that customer diversification will continue.

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RF Micro Devices, Inc. and Subsidiaries Annual Report on Form 10-K 2005

Sales and Marketing

We sell our products worldwide directly to customers as well as through a network of domestic and foreign sales representative firms and distributors. We select our domestic and foreign sales channels based on technical skills and sales experience, as well as the presence of complementary product lines and the customer base served. We provide ongoing training to our representatives and distributors to keep them informed of and educated about our products. We maintain an internal marketing organization that is responsible for key account management, application engineering support to customers, developing sales and advertising literature, such as product announcements, catalogs, brochures and magazine articles in trade and other publications, and preparing technical presentations for industry conferences. We have sales and customer support centers located throughout the world. During fiscal 2005, we added resources to help us to sell systems solutions, such as Bluetooth® and POLARIS^tm TOTAL RADIO^tm, which are more complex and require certain levels of technical expertise from our sales employees in order to integrate with our customers’ handsets.

We believe that maintaining a close relationship with customers and providing customers with ongoing technical support is essential to customer satisfaction in the wireless communications industry. Our applications engineers interact with customers during all stages of design and production, provide customers with current product application notes and engineering data, maintain regular contact with customer engineers and assist in the resolution of technical problems. We assign to our largest customers a contract account manager who maintains regular contact with the customer to determine its product needs and concerns. Members of senior management also are involved in managing relationships with significant customers. We believe that maintaining close contact with customers improves their level of satisfaction and enables us to anticipate their future product needs.

Research and Development

Our research and development efforts are focused primarily on developing new products, developing new manufacturing technologies and improving final product test yields. We currently operate design centers that are located throughout the world, in addition to our design engineering staff in Greensboro, North Carolina.

Our design staff is continually developing solutions for new and emerging wireless applications. Our research and development activities include not only new circuit designs, but also the development and refinement of proprietary design tools and models to facilitate new product development. Moreover, we are continually evaluating new circuits and emerging semiconductor process technologies to meet our customers’ future wireless equipment needs and to augment our Optimum Technology Matching® strategy. As part of this strategy, we utilize multiple semiconductor process technologies in order to offer our customers products that best meet their performance, cost and time-to-market requirements. Our Advanced Development Group focuses on next-generation technology in the areas of design, packaging, semiconductor processes and radio systems architecture. The purpose of this group is to develop innovative technologies prior to our customers’ needs and to allow our product development cycles to be more repeatable, which often results in the commercialization of new technologies.

In fiscal 2005, 2004 and 2003, we incurred approximately $156.5 million, $128.2 million and $101.7 million, respectively, in research and development expenses. We do not separately account for customer-sponsored research and development expenses from those research and development expenses paid directly by us.

The market for our products is characterized by rapid changes in product designs and the emergence of new semiconductor technologies used to fabricate higher performance devices. Because the demand by OEMs for continual improvements in product performance is expected to continue, we believe that our future success depends in part on our ability to design products using emerging technologies that meet the cost and performance parameters of our customers. Moreover, we believe that we must be able to continue to attract and retain qualified research and development personnel.

Competition

Competition in the markets for our products is intense. We face competition from several companies engaged in the business of designing, manufacturing and selling RF components, as well as suppliers of module products and total systems solutions. We also experience competition for products manufactured using GaAs HBT process technology from companies that have or may develop GaAs HBT or other fabrication processes. In addition, our current and potential competitors include OEMs that have or may develop the ability to produce RF components or discrete products internally for their own requirements.

The industry is characterized by rapid advances in technology and new product introductions. Our competitiveness depends on our ability to improve our products and processes faster than our competitors, anticipate changing customer requirements, and successfully develop and launch new products, while reducing our cost. Our competitiveness is also affected by the quality of customer service, technical support and our ability to design customized products that address each customer’s particular requirements within the customer’s cost limitations. Many of our

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RF Micro Devices, Inc. and Subsidiaries Annual Report on Form 10-K 2005

current and potential competitors have entrenched market positions, established patents, copyrights, trade names, trademarks and intellectual property rights and substantial technological capabilities. In some cases, our competitors are also our customers and/or suppliers. Further, many of our competitors may have significantly greater financial, technical, manufacturing and marketing resources than we do. Increased competition could adversely affect our revenue and profitability by causing us to reduce prices or by reducing demand for our products.

Intellectual Property

It is our practice to seek U.S. patent and copyright protection on our products and developments, where appropriate, and to protect our proprietary technology under U.S. and foreign laws affording protection for trade secrets and for integrated circuit designs. We own numerous U.S. patents bearing on RF communications and related circuits and semiconductor processes, the earliest of which will likely expire in 2015. Numerous additional patent applications are pending, although it is possible that the inventions referenced in patent applications will not mature to issued patents or will infringe upon intellectual property rights of others. It is also possible that a court will find the issued patents invalid or unenforceable under numerous legal principles relating to prior art disclosures or inequitable conduct before the United States Patent and Trademark Office.

We have numerous trademark registrations and applications pending in the United States and throughout the world. We seek registrations for our primary trademarks, servicemarks and trade names; however, others may have trademark rights superior to ours in certain jurisdictions, and in some instances our designations may not be viewed as sufficiently distinctive to warrant exclusive trademark protection. We believe that we have the right to use our selected designations, and that these designations are distinctive and capable of trademark protection. Nevertheless, if our marks are successfully challenged on this basis, it is possible that we will not be permitted to operate in a jurisdiction under our trademark, servicemark or trade name or that we will not have the exclusive right to use these designations.

We also rely upon trade secrets, technical know-how and other unpatented proprietary information relating to our product development and manufacturing activities. To protect our trade secrets, technical know-how and other proprietary information, our employees are required to enter into agreements providing for maintenance of confidentiality and the assignment of rights to inventions made by them while in our employ. We also have entered into non-disclosure agreements to protect our confidential information delivered to third parties in conjunction with possible corporate collaborations and for other purposes. However, we cannot be sure that these types of agreements will effectively prevent unauthorized disclosure of our confidential information, that these agreements will not be breached, that we would have adequate remedies for any breach or that our trade secrets and proprietary know-how will not otherwise become known or independently discovered by others.

We have been named a defendant in a patent infringement lawsuit filed on August 3, 2001, in the U.S. District Court for the District of Arizona by Lemelson Medical, Education and Research Foundation, LP. The suit alleges that we have infringed claims of a total of at least 17 and possibly 18 patents, including “machine vision” claims of 12 patents, “bar code” claims of seven patents (some of which are the same as the 12 “machine vision” patents) and “integrated circuit” claims of three or four patents, and seeks injunctive relief, damages for the alleged infringements and payment of the plaintiff’s attorneys’ fees. The suit has been stayed pending resolution of one of two related actions to which we are not a party. This case was stayed before any discovery and is in its very preliminary stages. In one of the related actions, a U.S. District Judge has held that claims of 14 patents (each patent being among those patents at issue in our litigation) were unenforceable and claims were invalid. Such ruling is currently under appeal. We cannot predict the ultimate outcome of this litigation.

We have on occasion been made aware that aspects of our technology may overlap technology discussed or claimed in issued U.S. patents. On these occasions, we have attempted to investigate thoroughly the underlying issues and determine whether design changes or patent licenses were appropriate.

Backlog

We do not believe that backlog as of any particular date is indicative of future results. Our sales are the result of consumption of custom products from consigned inventory held by our customers and from purchase orders for delivery of standard and custom products. The quantities projected for consumption of consigned inventory, quantities on purchase orders, as well as the shipment schedules, are frequently revised within agreed-upon lead times to reflect changes in the customer’s needs. Due to industry practice and our experience, we do not believe that such agreements are meaningful or reliable for determining future results.

Employees

At May 27, 2005, we had 2,570 employees. We believe that our future prospects will depend, in part, on our ability to continue to attract and retain skilled technical, marketing and management personnel. Competition for such personnel is intense, and the number of persons with relevant experience, particularly in engineering, product design and technical

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RF Micro Devices, Inc. and Subsidiaries Annual Report on Form 10-K 2005

marketing, is limited. None of our employees is represented by a labor union, and we have never experienced any work stoppage. We believe that our current employee relations are good.

Geographic Financial Summary

A summary of our operations by geographic area is as follows (in thousands):

Of our total revenue for fiscal 2005, 16 percent was for customers in the United States, 20 percent for customers in China, 18 percent for customers in Europe, 15 percent for customers in Korea and 14 percent for customers in Taiwan. Customers in Central and South America, Japan and Singapore accounted for the majority of the remaining fiscal 2005 revenue.

Sales, for geographic disclosure purposes, are based on the “bill to” address of the customer. The “bill to” address is not always an accurate representation of the location of final consumption of our products. Long-lived assets include property and equipment and at March 31, 2005, approximately $32.0 million (or 9.4%) of our total property and equipment was located in China.

Environmental Matters

By virtue of operating our MBE and wafer fabrication facilities, we are subject to a variety of extensive and changing federal, state and local governmental laws, regulations and ordinances related to the use, storage, discharge and disposal of toxic, volatile or otherwise hazardous chemicals used in the manufacturing process. Any failure to comply with such requirements currently in effect or subsequently adopted could result in the imposition of fines on us, the suspension of production or a cessation of operations, the occurrence of which could have an adverse impact upon our capital expenditures, earnings and competitive position. In addition, such requirements could restrict our ability to expand our facilities or require us to acquire costly equipment or incur other significant expenses to comply with environmental regulations. We believe that costs arising from existing environmental laws will not have a material adverse effect on our financial position or results of operations. We are an ISO 14001 certified manufacturer with a comprehensive Environmental System (EMS) in place in order to assure control of the environmental aspects of the manufacturing process. EMS mandates compliance and establishes appropriate checks and balances to minimize the potential for non-compliance. However, there can be no assurance that the environmental laws will not become more stringent in the future or that we will not incur significant costs in the future in order to comply with these laws. We do not currently anticipate any material capital expenditures for environmental control facilities for fiscal year 2006 or fiscal year 2007.

Access to Public Information

We make available, free of charge through our website (http://www.rfmd.com), our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file these reports with, or furnish them to, the Securities and Exchange Commission (SEC). The public may also request a copy of our forms filed with the SEC, without charge upon written request, directed to:

Investor Relations Department

RF Micro Devices, Inc.

7628 Thorndike Road

Greensboro, NC 27409-9421

In addition, the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. You may also read and copy any documents that the Company files with the SEC at the SEC’s Public Reference Room located at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for information on the operation of the Public Reference Room.

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RF Micro Devices, Inc. and Subsidiaries Annual Report on Form 10-K 2005

RISK FACTORS

In addition to the other information in this Annual Report on Form 10-K, readers should carefully consider the following important factors. These factors, among others, in some cases have affected, and in the future could affect, our financial condition and results of operations and could cause our future results to differ materially from those expressed or implied in any forward-looking statements that appear in this Annual Report on Form 10-K or that we have made or will make elsewhere.

Our industry’s technology changes rapidly and we depend on the development and growth of the wireless markets.

We depend on the development and growth of markets for wireless communications products and services. We cannot be sure about the rate at which markets for these products will develop or our ability to produce competitive products for these markets as they develop. In particular, in fiscal year 2006, the market adoption of EDGE, the execution on our product development efforts, and the success of our customers with EDGE-based products will be significant factors for our revenue growth.

We supply RF components and system level solutions primarily for wireless applications. The wireless markets are characterized by frequent introduction of new products and services in response to evolving product and process technologies and consumer demand for greater functionality, lower costs, smaller products and better performance. As a result, we have experienced and will continue to experience some product design obsolescence. We expect our customers’ demands for improvements in product performance to continue, which means that we must continue to improve our product designs and develop new products that may use new technologies. It is possible that competing technologies will emerge that permit the manufacture of integrated circuits that are superior to the products we make under existing processes. If that happens and we cannot design products using that technology or develop competitive products, our operating results will be adversely affected.

To remain competitive in our silicon-based products, we expect to continue to transition our silicon semiconductor products to increasingly smaller line width geometries, and as smaller geometry processes become more prevalent, we expect to continue to integrate greater levels of functionality, as well as customer and third party intellectual property and software, into our products. However, we may not be able to achieve higher levels of design integration or deliver new integrated products on a timely basis, or at all. Moreover, even if we are able to achieve higher levels of design integration, such integration may have a short-term adverse impact on our operating results, as we may reduce our revenue by integrating the functionality of multiple chips into a single chip.

We face risks associated with the operation of our MBE, wafer fabrication, assembly and test, tape and reel facilities.

We operate one MBE facility and two wafer fabrication facilities. We currently use several international and domestic assembly suppliers, as well as our internal assembly facility in Beijing, China, to package and assemble our products. We currently have our own test, tape and reel facilities located in Greensboro, North Carolina, and Beijing, China, and we also utilize contract suppliers and partners in Asia to test our products.

A number of factors will affect the future success of our facilities, including the following:

We face challenges managing the growth of our Company.

To manage our growth effectively, we must:

Competition for these resources is intense. We must also manage multiple relationships with various customers, business partners and other third parties, such as our foundry, assembly and test, tape and reel partners. Our systems, networks, software tools, procedures or controls may not be adequate to support our operations, and we may not be able to expand quickly enough to exploit potential market opportunities. Our future operating results and success may also depend

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RF Micro Devices, Inc. and Subsidiaries Annual Report on Form 10-K 2005

on keeping key technical personnel and management and expanding our sales and marketing, research and development and administrative support. We do not have employment agreements with the substantial majority of our employees. We must also continue to attract qualified personnel. The competition for qualified personnel is intense, and the number of people with experience, particularly in RF engineering, integrated circuit design, and technical marketing and support, is limited. We cannot be sure that we will be able to attract and retain other skilled personnel in the future.

We depend heavily on third parties.

We purchase numerous production component parts, such as surface mount devices, substrates and silicon-based products, from external suppliers. The use of external suppliers involves a number of risks, including the possibility of material disruptions in the supply of key RF components and the lack of control over delivery schedules, manufacturing yields, quality and fabrication costs.

We currently use several international and domestic assembly suppliers, as well as our internal assembly facility in Beijing, China, to package and assemble our products. All of our key vendors and suppliers are compliant with applicable ISO 9000 or QS 9000 standards. However, if these vendors’ processes vary in reliability or quality, they could negatively affect our products and, therefore, our results of operations.

We currently have our own test, tape and reel facilities located in Greensboro, North Carolina, and Beijing, China, and we also utilize contract suppliers and partners in Asia to test our products. We expect to increase our reliance on our Beijing facility as well as our utilization of contract suppliers and partners in Asia for test, tape and reel in order to minimize the movement of inventory, which improves cycle time and results in lower costs.

Our operating results fluctuate.

Our revenue, earnings and other operating results have fluctuated significantly in the past and may fluctuate significantly in the future. Our future operating results will depend on many factors, including the following:

It is likely that our future operating results will be adversely affected by the factors set forth above or other factors. If our future operating results are below the expectations of stock market analysts or our investors, our stock price may decline.

If we experience poor manufacturing yields, our operating results may suffer.

Our products are very complex. Each product has a unique design and is fabricated using semiconductor process technologies that are highly complex. In many cases, the products are assembled in customized packages. Our products, which primarily consist of multiple components in a single package, feature enhanced levels of integration and complexity. Our customers insist that our products be designed to meet their exact specifications for quality, performance and reliability.

Our manufacturing yield is a combination of:

Due to the complexity of our products, we periodically experience difficulties in achieving acceptable yields on certain new and existing products.

Our customers also test our components once they have been assembled into their products. The number of usable products that result from our production process can fluctuate as a result of many factors, including the following:

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RF Micro Devices, Inc. and Subsidiaries Annual Report on Form 10-K 2005

We are constantly trying to improve our manufacturing yields. Typically, for a given level of sales, when our yields improve, our gross margins improve, and when our yields decrease, our unit costs are higher, our margins are lower, and our operating results are adversely affected.

We depend on a few large customers for a substantial portion of our revenue.

Historically, a substantial portion of our revenue has come from large purchases by a small number of customers and we expect that trend to continue. In fiscal 2005, our top five customers accounted for approximately 62 percent of our total revenue and our top 10 customers accounted for approximately 71 percent of our total revenue. Our future operating results depend on both the success of our largest customers and on our success in diversifying our products and customer base.

We typically manufacture custom products on an exclusive basis for one customer for a negotiated period of time. The concentration of our revenue with a few large customers makes us particularly dependent on factors affecting those customers. For example, if demand for their products decreases, they may stop purchasing our products and our operating results would suffer. Most of our customers can cease incorporating our products into their products with little notice to us and with little or no penalty. The loss of a large customer and failure to add new customers to replace lost revenue would have a material adverse effect on our business, financial condition and results of operations.

Our operating results are dependent on our GaAs HBT process technology and demand for our GaAs HBT products.

Although we design products using multiple distinct process technologies, a substantial portion of our revenue comes from the sale of products manufactured using GaAs HBT process technology. Our dependence on GaAs HBT products could have an adverse effect on our operating results in the future. Competitors can enter the market and offer their own GaAs products, and direct competition with competitors who utilize GaAs HBT process technology could adversely affect our selling prices. Also, new process technologies are being developed, and one or more of these processes could have characteristics that are superior to GaAs HBT. If we are unable to access these technologies through licenses or foundry service arrangements, we will be competitively disadvantaged. These and other factors could reduce the demand for GaAs HBT components or otherwise adversely affect our operating results.

We depend on our exclusive license from Northrop Grumman Space Technology for our GaAs HBT technology. If the license is terminated for breach of contract or if it were determined that this technology infringed on a third party’s intellectual property rights, our operating results would be adversely affected. Northrop made no representation to us about whether the licensed technology infringed on the intellectual property rights of anyone else.

We operate in a very competitive industry and must continue to implement innovative technologies and increase capacity utilization in order to reduce costs and improve margins.

Competition in the markets for our products is intense. We compete with several companies primarily engaged in the business of designing, manufacturing and selling of RF components and system level solutions, as well as suppliers of discrete products such as transistors, capacitors and resistors. Several of our competitors either have GaAs HBT process technology or are developing GaAs HBT or new fabrication processes. In addition, many of our existing and potential customers manufacture or assemble wireless communications devices and have substantial in-house technological capabilities. Any of these customers could develop products that compete with or replace our products. A decision by any of our large customers to design and manufacture integrated circuits internally could have an adverse effect on our operating results. Increased competition could mean lower prices for our products, reduced demand for our products and a corresponding reduction in our ability to recover development, engineering and manufacturing costs. In order to improve our margins, we need to reduce our costs by making continual operational improvements to reduce cycle time, increase capacity utilization and improve test yields. Our inability to meet these objectives could have an adverse effect on our operating results.

Many of our existing and potential competitors have entrenched market positions, considerable internal manufacturing capacity, established intellectual property rights and substantial technological capabilities. Many of our existing and potential competitors may have greater financial, technical, manufacturing or marketing resources than we do. We cannot be sure that we will be able to compete successfully with our competitors.

Our operating results are substantially dependent on development of new products.

Our future success will depend on our ability to develop new product solutions for existing and new markets. We must introduce new products in a timely and cost-effective manner and secure production orders from our customers. The development of new products is a highly complex process, and we have experienced delays in completing the development and

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RF Micro Devices, Inc. and Subsidiaries Annual Report on Form 10-K 2005

introduction of new products at times in the past, including during fiscal 2005. Our successful product development depends on a number of factors, including the following: