Liam Griffin, long one of the pillars of Irvine’s tech scene, will be leaving chipmaker Skyworks Solutions Inc., yielding the top spot to a lesser-known colleague who inherits a downbeat forecast.
The unexpected move announced on Feb. 5 came when the company disclosed a likely decline in future business from Apple Inc., its biggest customer. Rival Broadcom Inc., the biggest chipmaker with operations in Orange County, appears to have picked up market share for Apple’s upcoming iPhone 17, according to analysts.
Skyworks’ revenue from the iPhone 17 is “on track to decline 20-25%” because of the lost business, Raymond James analyst Srini Pajjuri wrote in a note to investors. “Management believes that the share loss is not related to product performance and remains optimistic about its longer term opportunity at Apple.”
The shares dropped 25% to $65.60 in the trading session after the announcement. The company’s market cap on one day, Feb. 6, declined about $3.3 billion to $10.7 billion.
Griffin joined Skyworks in 2001 as head of sales and marketing, becoming president in 2014 and CEO in 2016. Skyworks’ stock price rose above $190 a share in 2021 and has since been on a downward slope; overall during his nine-year tenure, the stock increased 6.4%.
He will be succeeded on Feb. 17 by Philip Brace, 54, formerly the executive chairman of wireless company Inseego Corp. in San Diego. Brace was also on the board of Irvine-based computer network products maker Lantronix Inc., which has a $161.6 million market cap (Nasdaq: LTRX). On Feb. 5, Lantronix announced Brace’s exit from the board.
“We have benefited greatly from his extensive experience in all areas of technology,” Saleel Awsare, president and CEO of Lantronix, said in a statement. “We wish him all the best in his new role as CEO of Skyworks Solutions Inc.”
Griffin, who originally hails from the East Coast (see story this page) will remain with Skyworks in an advisory role for three months to help ensure a smooth transition. The company said Brace’s appointment “follows a robust succession planning process by the Skyworks Board.”
“It has been a privilege to be part of such a talented team for the last 23 years, and I look forward to seeing Skyworks prosper under Phil’s leadership,” Griffin said in a statement.
Stock Price Plummeted
Brace is taking over a company with more than 10,000 employees as of last year, including 563 in Orange County, and falling sales.
Skyworks last week reported fiscal first quarter sales fell 11% to $1.07 billion; on a non-GAAP basis, operating income was $285 million. It forecasts fiscal second quarter revenue of $935 million to $965 million, implying a 9.2% drop at the midpoint from a year ago.
The first quarter results and second quarter forecasts were in line with analysts’ expectations, analyst Pajjuri said.
“The bigger story, however, was management’s comment regarding share loss at its largest customer, Apple,” Pajjuri wrote.
Apple has decided to dual source a key radio frequency (RF) component in iPhone 17, analysts said.
TD Cowen analyst Krish Sankar said the move could cost $600 million in lost sales for Skyworks, which had $4.2 billion in fiscal 2024. TD Cowen lowered Skyworks’ price target from $90 to $75.
“The customer is demanding and asking for better and higher RF products, in part because, as you all know, they’re bringing AI capabilities to the phone, which is increasing the technological burden inside the phone,” Chief Financial Officer Kris Sennesael said on a conference call last week with analysts.
“They are asking for smaller footprint, lower power consumption, lower latency and higher throughput and, overall, higher performance. And we’re stepping up. We demonstrated that our technology and products can do it. Unfortunately, we didn’t get a single source. We were dual sourced on one important part,” he said.
The winner of that lost business could be Broadcom, analysts told investors. Broadcom’s share price has exploded in the past two years to a market cap topping $1 trillion as it emphasizes chips capable of handling demands for artificial intelligence.
Griffin has tried to reduce the company’s reliance on Apple, which traditionally has generated around 60% or more of Skyworks’ revenue. In the most recent quarter, Apple supplied 72% of Skyworks’ revenue, up 9% sequentially due to Apple’s ramp of up
its current phone.
Skyworks last week also authorized the repurchase of up to $2 billion of common stock for the next two years. The company had cash and marketable securities of $1.75 billion as of Dec. 27.
Planned Succession Process
The incoming CEO has a long history in the wireless industry.
Brace was CEO at Sierra Wireless Inc., a manufacturer of high-performance cellular networking for mission critical applications, from 2021 to 2023. He also served as executive vice president of Veritas Technologies, a cloud data management company, from 2019 to 2021. He was in executive positions at well-known tech companies like Seagate Technology, Intel Corp. and LSI Corp. Brace is also a board director at BlackBerry Limited (NYSE: BB), which has a $3.1 billion market cap.
“While we believe that Mr. Brace comes to SWKS with well-rounded experience, including a position as executive chairman at Inseego, which is in process of what looks to be a successful turnaround, the timing of the change given near-term dynamics raises more questions,” Stifel Insitutional analyst Ruben Roy told investors in a note.
Griffin is also stepping down as a member of the board of directors. Christine King, the CEO of healthcare company Henry Schein One and Skyworks’ lead independent director since 2019, has been appointed chairman of the board of directors.
“We are at an inflection point in the wireless networking revolution,” King said last week.
Liam Griffin: From East to West
Skyworks Solutions Inc. Chief Executive Liam Griffin, 58, grew up in Brookline, Massachusetts, not far from the Boston Red Sox famed Fenway Park.
His Boston accent comes back when he’s cheering for the New England Patriots in nearby Foxborough.
Yet the East Coast native moved the chipmaker’s headquarters from the Boston suburb of Woburn to Irvine—a shift that’s reflected the company’s center of gravity along the Pacific Coast.
“Our customers are very much centered around Silicon Valley, in Asia, which makes Southern California and Orange County very convenient,” Griffin told the Business Journal five years ago.
— Kevin Costelloe
OC Sees 6 Major CEO Changes in Year
Liam Griffin is the sixth CEO of a major OC-based company to depart in the past year.
• Brian Niccol left Chipotle Mexican Grill Inc., the county’s most valuable publicly traded company with a $77.9 billion market cap, for the top job at Starbucks Corp.
• Joe Kiani departed Masimo Corp., which has a $9.6 billion market cap, after he was ousted from the board by shareholders.
• Jim Conroy left Boot Barn Holdings, which has a $4.3 billion market cap, for Ross Stores Inc.
• Amir Aghdaei went from CEO to senior adviser at Envista Holdings Corp., which has a $3.8 billion cap.
• Alteryx Inc., once a high-flying data centric software company with a market cap topping $10 billion, saw Mark Anderson depart last year as it was being acquired by two private equity firms in a $4.4 billion deal.
