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Based in San Diego, Calif., Peregrine Semiconductor (NASDAQ:PSMI) scheduled an $83 million IPO with a market capitalization of $495 million at a price range mid-point of $15, for Wednesday, August 8, 2012.

Five other IPOs are scheduled for the week of July 30. Full IPO calendar available here.

PSMI filed an updated S-1 on July 25, 2012.

UNDERWRITERS
Manager Joint Managers: Deutsche Bank Securities/ J.P. Morgan.
Co Managers: RBC Capital Markets; Needham; Oppenheimer; Pacific Crest Securities.

SUMMARY
PMSI is a fabless provider of high performance RFICs (Radio Frequency Integrated Circuits).

For the six months ended June 2012 sales increased 74% to $80 million from $46 million for the June 2011 six months. Net loss increased to -$3 million from -$2.3 million.

For the same periods, gross margin dropped to 34% from 42%.

Valuation Ratios

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

annualizing June 6 mos

Cap (MM)

Sales

Earnings

BookValue

TangibleBV

in IPO

Peregrine Semiconductor (PSMI)

$495

3.1

-83

4.9

4.5

17%

ACCUMULATED DEFICIT
As of June 30, 2012, PMSI had an accumulated deficit of $231.3 million.

OBSERVATIONS
Sales are up but gross margins are down, resulting in an increased loss for the six months ended June 2012. Technology companies need higher gross margins to be of interest to investors.

CONCLUSION
Avoid the PMSI IPO at the price range mid-point.

BUSINESS
PMSI is a fabless provider of high performance RFICs. PMSI solutions leverage a proprietary UltraCMOS technology, which enables the design, manufacture, and integration of multiple RF, mixed signal, and digital functions on a single chip.

PMSI solutions target a broad range of applications in the aerospace and defense, broadband, industrial, mobile wireless device, test and measurement equipment, and wireless infrastructure markets.

PMSI has shipped over one billion RFICs based on its UltraCMOS technology since January 1, 2006.

PRODUCTS & CUSTOMERS
As of June 30, 2012, PMSI offered a broad portfolio of more than 160 high performance RFICs including switches, digital attenuators, mixers / upconverters, prescalers, DTCs, and DC-DC converters, and PMSI is currently developing power amplifiers (Pas).

During the year ended December 31, 2011, PMSI products were sold to more than 1,500 module manufacturers, OEMs, contract manufacturers, and other customers.

PMSI believes its RFICs are included in products sold by many of the leading mobile handset OEMs.

LAWSUIT RISKS, p23
The semiconductor industry is characterized by frequent claims and litigation, including claims regarding patent and other intellectual property rights. PMSI is presently involved in two related patent infringement matters that it began, and PMSI expects the number of patent and other intellectual property matters, including claims that may be asserted against PMSIU, to increase.

INTELLECTUAL PROPERTY
PMSI had more than 125 U.S. and international patents issued or pending as of June 30, 2012.

COMPETITION
PMSI competes primarily with other suppliers of high performance RFICs.

PMSI currently competes in the mobile wireless device and wireless infrastructure markets with Avago Technologies (NASDAQ:AVGO), Hittite Microwave (NASDAQ:HITT), M/A-COM Technology (NASDAQ:MTSI), NEC Corporation, Renesas Electronics Corporation, RF Micro Devices (RFMD), Skyworks (NASDAQ:SWKS), Sony (NYSE:SNE), Texas Instruments (NASDAQ:TXN), Toshiba (OTCPK:TOSBF), TriQuint Semiconductor (TWNT), and others.

In the broadband, test and measurement equipment, and industrial markets, PMSI principally competes with Hittite, M/A-COM, Renesas, Skyworks, and others.

Principal competitors in the aerospace and defense markets include Analog Devices (NASDAQ:ADI), Hittite, Intersil Corporation, M/A-COM, and others.

Pre-IPO SHAREHOLDERS
Morgenthaler Partners VI, L.P. 12%
Entities affiliated with Advanced Equities, Inc. 9%
U.S. Small Business Administration 9%
Ridgewood Peregrine LLC 9%
Entities affiliated with Palisades Ventures, L.P. 5%
Entities affiliated with TVP No. 3 Fund Nominees Pty Limited 6%

EMPLOYEES
As of June 30, 2012, PMSI had 340 employees, of which 315 were located in the U.S., 16 were located in Asia, and nine were located in Europe.

USE OF PROCEEDS
PMSI expects to net $73.5 million from the sale of 5.3 million shares. Shareholders intend to sell 158,220 shares.

IPO proceeds are allocated to working capital and general corporate purposes.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: This PSMI IPO report is based on a reading and analysis of PSMI's S-1 filing, which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.