Anyone who follows Irvine-based Skyworks Solutions Inc. may want to keep a close eye on the company’s role in China as well as the chipmaker’s emphasis on the smart car industry.
Liam Griffin, the CEO and president of OC’s most valuable publicly traded tech company, with a valuation approaching $20 billion as of last week, says “the China opportunity is as good as any opportunity.”
“We have no reason why we wouldn’t want to do more business in China,” Griffin told financial analysts earlier this month after the chipmaker (Nasdaq: SWKS) released quarterly earnings.
He said the market situation in China needs to clear up first.
Griffin emphasized that “China has been a challenge, I think, for ourselves and the peers in the U.S. here.”
China is the second-largest market for Skyworks, but sales booked from that region fell from $234.3 million in the three months ended Dec. 31, 2021, to $106.3 million for the last quarter of 2022.
The decline was due to both existing customers burning off their backlogs of existing inventory, resulting in fewer sales, as well as COVID-19 issues in the country, officials said.
Auto Opportunity
Griffin boasted that “the automotive opportunity for Skyworks has been incredible,” citing both the decision to purchase infrastructure and automotive unit of Silicon Laboratories Inc. (Nasdaq: SLAB) in a transaction valued at $2.75 billion in 2021, as well as Skyworks “own internal developments.”
“We’ve got a business now that is in the hundreds of millions of dollars a year, really at a time where, you know, the EV and electrification of vehicles is really just starting,” Griffin said, according to a transcript of the earnings call from website Motley Fool. “So, I think this is going to be an incredible piece for us. One of the markets that will drive our broad markets portfolio.”
Chip Hub
Broadcom Inc. (Nasdaq: AVGO), Tower Semiconductor Ltd. (Nasdaq: TSEM) and Skyworks Solutions remain the largest names in Orange County’s vital semiconductor sector, while upstarts such as Syntiant Corp., Movandi and Mobix Labs are also making their mark.
Skyworks counted 524 local employees as of last month.
Plenty of attention is being given to Apple Inc., which is setting up a chip development unit in Orange County.
Skyworks Solutions CFO Kris Sennesael told the analysts on the first-quarter conference call that Skyworks got approximately 68% of its revenue from Apple, long its largest customer.
China Drag
Skyworks CEO Griffin emphasized that some of the markets in China are a “little bit more volatile’’ though the company currently has “very little exposure” in those areas.
While the company’s revenue from China dropped by more than half in the three months ended Dec. 31, U.S. sales tallied just over $1 billion in the same period for an increase of 3.5% year-over-year.
Faced with difficult economic times, both net income and net revenue declined for Skyworks last quarter, while its revenue projection for the current three-month period is also down.
