Insights from Skyworks Solutions second quarter
Skyworks Solutions is on a roll this year – it smashed analysts’ expectations in the second quarter of 2017, and its share price is up an astounding 35% so far this year. Writing at The Motley Fool, tech sector journalist Harsh Chauhan dug into the company’s latest quarterly earnings report to make two important points about the company that could see its incredible run continue into the later part of this year.
Skyworks Solutions is up an impressive 35%, year-to-date
SOURCE: Yahoo Finance
Skyworks is famous for being an Apple supplier – and while Apple may be the world’s biggest company, that dependency still leaves it open to criticism. But no more: the company’s latest quarter demonstrates quite clearly that it is reducing its dependency on Apple, and has made some big wins in China. In recent weeks, Apple’s supply chain has undergone a wobble – the Cupertino-based tech titan has decided that it doesn’t need the services of two of its suppliers.
Meanwhile, the Chinese smartphone market is exploding. In the second quarter, Apple contributed 40% of Skywork’s revenue – down 4% from 2015 – while Chinese smartphone maker Huawei contributed 10%. Huawei’s smartphone sales increased by 29% in 2016, and in the first quarter of 2017, it jumped a further 22%. This is clearly a relationship that has huge potential for Skyworks.
Skyworks is also seeing wins in the automotive industry. Until last year, the company only had one automotive account on its books (LG Electronics). But over the past two quarters, the company has landed four automotive design wins. Chauhan cites Markets and Markets as saying that the global Internet of Things (IoT) chip market could be worth $14.8 billion in 2022, growing annually by 13.2%. Since automotive connectivity chips are the biggest segment in the IoT semiconductor space, this industry could be a lucrative one of rSkyworks going forward.
Dominion holds Skyworks Solutions in its Global Trends Ecommerce Fund.
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