Skyworks Solutions, Inc.
Analysis
Skyworks is turning into a different company. Broad markets has grown for nine straight quarters at better margins than the rest of the business, mobile content has stopped shrinking, and the Qorvo merger is nearly closed. Costs are the whole story now.How has the largest customer's share of revenue changed?
- Mobile content stopped shrinking, and management now calls it a new cycle.
Skyworks went from guiding a 20-25% content loss at its largest customer to calling blended content flat, and it just won a multigenerational Android deal worth over $1 billion. The decline that capped its growth for years has stopped.Which Android models carry the billion-dollar design win?
- Broad markets is now nearly half the company.
Nine straight quarters of growth, with WiFi, data center and automotive growing double digits at better margins than the company as a whole. Less reliance on one customer is what makes a weak phone cycle survivable.
- Costs are rising faster than Skyworks can cut them.
Gross margin slipped toward 44-45% as input costs outran the company's own savings, and the last two quarters' free cash flow went negative as it stockpiled inventory. Until Qorvo's savings land, it earns less, not more.How much of the cost increase has been passed to customers?
- Broad markets diversificationThe bull case holds that Wi-Fi, data center and automotive have made Skyworks a broader supplier whose non-phone business grows faster than the company overall.
- Qorvo combinationCombining with Qorvo is expected to cut reliance on one phone customer, widen the RF portfolio and produce large cost savings that lift earnings.
- Content growth from AIManagement argues that rising RF complexity from AI workloads and satellite bands will put content per device back on a growth path after years of decline.
- Single customer dependenceThe bear case is that one phone customer supplies most of revenue and decides each design cycle how much RF content Skyworks keeps.
- Rising input costsInput costs are climbing faster than internal cost cuts, and mobile prices are fixed at design selection, so margin pressure cannot be passed on within the year.
- Consumer IoT weaknessBroad markets growth is being held back by weak consumer IoT demand and by supply limits on the data center and automotive products that are growing fastest.
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No product-segment revenue breakdown reported for this stock.