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Skyworks Deploys Mini Circulators, Boosts 5G Wireless Network

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Skyworks Solutions, Inc. (SWKS - Free Report) has been banking on product launches in a bid to gain higher market share. Recently, the company introduced its latest suite of mini circulators for 5G infrastructure.

The suite comprises SKYFR-001692 SKYFR-001657 circulators designed for wireless infrastructure and offers network attached device (NAD) reliability, and sturdy LTE connectivity with high bandwidth and low latency features.

Available in 7nm and 10 nm packages with frequency range of 3400 MHz to 3600 MHz, the new suite is capable of extending support to 5G new radio standard among other cellular bands. These circulators also help to protect RF elements and include components that support new 5G waveforms and spectrum, and cater to low, mid, high and ultra-high cellular frequency bands.

Currently, this small-sized, highly-integrated and efficient new mini circulator occupies up to 50% less board space than competitive products. The latest suite offers Low Noise Amplifiers (LNAs) and Discrete switches, addressing the requirements of Massive MIMO (multiple input, multiple output) technologies essential for achieving 5G standard data speed and lower latency levels.

Shares of Skyworks have returned 34.7% year to date, outperforming the industry’s 31.8% rally.

5G Market Opportunities

High-speed data requirements, emerging Internet of Things connections, gush in demand for mobile broadband services and accelerated 5G deployment are paving the way for robust 5G technologies. Allied Market Research projects the global 5G infrastructure market to reach $58 billion in 2025, witnessing a CAGR of 96% during the 2017-2025 time frame.

Notably, 5G has gained solid traction backed by tremendous advancement of technology over the past year. In the near future, operators will be required to support trillions of IoT devices that are anticipated to be wirelessly connected. This has huge technical implications and its implementation will entail huge time and costs.

Per GSMA, “5G will primarily support enhanced mobile broadband in early deployments.” Moreover, per GSMA report, the 5G network infrastructure market is expected to reach 1.1 billion and total operator revenues are anticipated to reach $1.3 trillion by 2025.

Furthermore, the 5G network infrastructure market is expected to witness a CAGR of 70% between 2019 and 2025, per May 2017 Research and Markets report. This will eventually account for $28 billion in annual spending by the end of 2025.

Based on the above-mentioned positives, we believe that Skyworks is well-positioned to capitalize on the 5G based infrastructures, with rising demand for high-performance analog solutions in new markets.

Wrapping Up

Skyworks is benefiting from its strong portfolio, particularly in the 5G applications and IoT market. Further, the company continues to win content at mobile and OEMs like Huawei, Samsung, Oppo, Vivo, LG and Nokia. Notably, the upcoming 5G upgrade cycle is an added positive.

In terms of competition, management believes that Qualcomm (QCOM - Free Report) , despite pursuing programs that Skyworks is already a part of, is not a major threat. Moreover, the trade war between the United States and China will not have much impact on the company’s top line.

Zacks Rank & Key Picks

Skyworks currently carries a Zacks Rank #3 (Hold). Few better-ranked stocks in the broader Technology sector are Cadence Design Systems, Inc. (CDNS - Free Report) and Castlight Health, Inc. (CSLT - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The projected earnings growth rate (3-5 years) for Cadence Design and Castlight Health is 12% and 22.5%, respectively.

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