Skyworks Solutions, Inc. SWKS recently launched SkyOne Ultra 3.0 suite to facilitate emerging automotive applications, in particular.
The suite comprises SKYA230xx front-end modules leveraging SkyBlue enabling technology, SKYA220xxpower amplifiers, SKYA250xx Diversity Receive (DRx) and MIMO modules, SKYA21xxx suite of Low Noise Amplifiers (LNAs) and Discrete switches.
The latest wireless suite offers network attached device (“NAD”) reliability, and sturdy LTE connectivity with high bandwidth and low latency features.
Further, the new suite exceeds LTE Category 16 standard speed and frequency requirements, enabling it to extend support to 5G new radio standard among other cellular bands.
According to the press release, “the connectivity engines can be regionally optimized for North American, European, Chinese and other SKUs to achieve additional cost savings.”
The customers are expected to benefit from the reduced design complexity and accelerated time to market.
Portfolio Expansion Bodes Well
Skyworks is benefiting from strong demand of its wireless communications engines. The company’s expanding product portfolio, growing clout in the connectivity solutions and 5G markets are key catalysts.
Skyworks Solutions, Inc. Revenue (TTM)
Skyworks Solutions, Inc. Revenue (TTM) | Skyworks Solutions, Inc. Quote
The new SkyOne Ultra 3.0 suite enabling the emerging smart vehicles is anticipated to strengthen the company’s foothold in the automotive market. Further, the emergence of connected homes, 5G, artificial intelligence (AI), augmented reality (AR), ADAS, wearables and network infrastructure bode well.
Growth Prospects Hold Promise
High-speed data requirements, emerging connected systems and accelerated 5G deployment are paving the way for robust in-vehicle technologies, in turn driving consumer demand for smart vehicles.
Per IHS Markit data, sales of connected cars will exceed 72 million units by 2023 from 24 million in 2015. Further, Allied Market Research estimates the global autonomous vehicle market is likely to reach $556.7 billion in 2026, witnessing a CAGR of 39.5% during 2019-2026.
Notably, growth projections favor company’s prospects in the long term. Moreover, Skyworks intends to go beyond mobile devices by diversifying end markets on the back of its expanding product portfolio.
In fact, the company recently concluded the acquisition of Avnera Corporation. The buyout gives Skyworks access to robust analog/mixed signal voice, audio and speech processing engines. Avnera acquisition is expected to extend its reach across high-growth markets, comprising Internet of Things (IoT), AI, Automotive, Smart Home and Enterprise, which is a positive.
However, Skyworks faces stiff competition from industry peers including Broadcom AVGO, Qorvo QRVO, among others, which exposes it to significant pricing pressures. The company also seems to be plagued with customer concentration woes.
Reportedly, the company’s power-amplifier chips enable Apple’s AAPL iPhones to transmit data at elevated speeds. Notably, lesser-than-expected demand of latest iPhones is a headwind.
Moreover, slight changes in demand of iPhone related devices create a stir among Apple’s supplier base, which includes Skyworks. To add to the woes, Apple’s vertical integration policy is also a major concern.
Skyworks currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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