The Trend In Manufacturing Spending Is Good News For Skyworks

Technical discussions during the Mobile World Congress underline the growth outlook in spending on radio frequency components in mobile phones, even in the high-end models at Apple Inc. AAPL and Samsung SSNLF, Charter Equity’s Edward Snyder said in a report.

While reiterating a Buy rating for Skyworks Solutions Inc SWKS, Snyder noted that more of the increased RF spending is “flowing to areas and markets” favoring the company.

Trends Benefit Skyworks

“Where we expected spending to slow as the high-end models pulled in most of the advanced features of LTE [Long-Term Evolution], we’re now seeing first signs of 5G (LTE-U), MIMO [multiple input, multiple output] for cellular, Power Class 2, and a host of enhancements to six-mode 4G models to improve performance,” Snyder wrote.

Although most of this continues to be focused on filters, an increasing percentage of the new spending would likely be in non-filter technologies, which is a beneficial trend for Skyworks, “given its strength in many of these areas and its industry-leading execution” the analyst noted.

Many of the OEM design engineers have indicated the high quality of Skyworks’ execution and the company’s performance on new designs.

“Strong customer relationships and greater clarity on 4G phone road maps for the next two years improve our visibility on revenue growth and increase our confidence in Skyworks’ ability to exceed the rate of RF TAM growth,” Snyder said.

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Analysts See Blue Sky For Skyworks In 2017

Analyst: The Top Tech Stock Isn't Apple, Alphabet Or Amazon - It's Skyworks Solutions _______ Image Credit: By © Raimond Spekking / CC BY-SA 4.0 (via Wikimedia Commons), CC BY-SA 4.0, via Wikimedia Commons