Buzzing Skyworks eyes future RF applications
After posting an 11 percent sequential increase in revenue and rapidly improving profitability, GaAs chip manufacturer Skyworks Solutions is now aiming its RFICs at a raft of emerging applications.
In a conference call with investors to discuss Skyworks latest quarterly results (see newsfeed entry for details), CEO Dave Aldrich said that so-called femto cells, wireless energy meters, and in-car electronics all offered the company scope to increase sales.
Skyworks has already hooked up with Korean electronics firm Samsung on femto cells, the miniature base stations that can be installed to improve wireless connectivity by offering WiMAX for homes and small business.
According to some estimates, 100 million subscribers could be using femto cells for their wireless access in a few years time, potentially offering up a substantial new market for GaAs chip makers.
But that could be dwarfed by another application area that Aldrich describes as energy management. According to the CEO, the 2.5 billion or so households and businesses around the world that draw on key services like gas, electricity and water could provide a huge market for Skyworks future.
Aldrich says that service providers want to deploy an economic RF technology that allows them to read meters remotely and in real time. He added that Skyworks has developed just such a technology, and has won a deal to supply a custom solution to "one of the largest energy providers in the US".
The automotive sector is another market that is ripe for penetration, Aldrich claimed. GaAs chip makers have long held out hope that intelligent radar for crash-avoidance systems would become a key market for their RFICs, although in reality that is yet to happen.
But, with the increased use of advanced technologies like Bluetooth, GPS, toll tags and digital receivers, Aldrich sees other opportunities for in-car applications, adding that Skyworks has already captured several wins with major-league customers like Siemens and Delphi.
Management and analysts are attributing Skyworks recent success to market share gains in China, where the company has made inroads at MediaTek. Key US customer Motorola is also shifting the RF technology in its low-end phones from power amplifier (PA) modules to more highly integrated front-end modules, which earn Skyworks more for the extra functions that they perform.
There ought to be further gains in the coming quarters too, as Skyworks begins to benefit from its late-2007 acquisition of Freescale s GaAs PA business (see related stories).
Although the deal has already gone through, Skyworks did not acquire any of the existing Freescale component inventory, meaning that sales to the likes of Research in Motion, whose popular Blackberry handsets use Freescale parts, have not yet transferred to Skyworks.
Morgan Stanley analyst Aaron Husock reckons that Skyworks will benefit more than most from the growing market for handset PAs.
"Increased front-end integration and wideband-CDMA adoption should drive 11 percent annual power amplifier market growth through 2009, with share gains supporting faster growth at Skyworks," wrote Husock in a research note.