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Qorvo (QRVO) Divests China Assets to Trim Capital Intensity
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Qorvo Inc. (QRVO - Free Report) recently entered into a definitive agreement with Luxshare Precision Industry Co., Ltd. to divest its assembly and test facilities located in Beijing and Dezhou, China. These facilities are primarily utilized for Qorvo’s highly integrated advanced cellular portfolio. The transaction of an undisclosed amount is expected to be completed by the first half of 2024 subject to regulatory approvals and mandatory closing conditions.
Luxshare is a global advanced contract manufacturer, offering seamless and flexible access to top-tier production capacity. Through this strategic divestment, Qorvo is aiming to leverage Luxshare's scalable and high-volume manufacturing expertise to enhance resilience within its supply chain network while maintaining premium quality standards.
The deal will support management’s efforts to reduce capital intensity in Qorvo’s business operations. Streamlining the manufacturing network will likely drive efficiency, free up investment commitment in this facility and provide greater flexibility in allocating resources. This initiative is aligned with Qorvo’s long-term gross margin objectives. Notably, Qorvo will continue to operate its manufacturing network in the United States, Costa Rica and Germany for assembly, packaging and testing.
Luxshare will take over the operations, assets and the existing workforce of the facilities. In accordance with a long-term supply agreement, it will assemble and test products for Qorvo and ensure smooth continuity of operations. Qorvo will retain its sales, engineering, and customer support teams in China to continue serving its customers.
Qorvo is expanding its opportunities across markets, customers and product categories while maintaining its commitment to technology leadership and productivity gains. The company offers the most complete product portfolio, targeting the highest growth segments of its market, including filters, switches and tuners. Qorvo is well-positioned to win some of the industry's highest growth opportunities by leveraging its diversified product portfolio, systems-level expertise, R&D and manufacturing scale and internal assembly and test capabilities.
The company has introduced highly integrated front-end solutions that simplify and accelerate the implementation of multimode, multi-band 4G smartphones and tablets. These new RF Fusion front-end solutions showcase the company's ability to help leading OEMs quickly launch their next-generation flagship devices.
The stock has gained 19.7% over the past year compared with the industry’s rise of 12.8%.
MODN provides revenue management solutions for life sciences and technology companies, including applications for configuration, price, quote, rebate management and regulatory compliance. In the last reported quarter, it delivered an earnings surprise of 3.33%.
Arista Networks, Inc. (ANET - Free Report) , carrying a Zacks Rank #2 at present, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build cloud architecture and enhance their cloud experience. Arista delivered a trailing four-quarter average earnings surprise of 12%.
ANET holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed data center segment. Arista is gaining market traction in 200 and 400-gigabit high-performance switching products and is well-positioned for healthy growth in the data-driven cloud networking business with proactive platforms and predictive operations.
NVIDIA Corporation (NVDA - Free Report) , currently carrying a Zacks Rank #2, delivered a trailing four-quarter average earnings surprise of 18.99%. In the last reported quarter, it delivered an earnings surprise of 19.64%.
NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit. Over the years, the company’s focus evolved from PC graphics to AI-based solutions that support high-performance computing, gaming and virtual reality platforms.
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Qorvo (QRVO) Divests China Assets to Trim Capital Intensity
Qorvo Inc. (QRVO - Free Report) recently entered into a definitive agreement with Luxshare Precision Industry Co., Ltd. to divest its assembly and test facilities located in Beijing and Dezhou, China. These facilities are primarily utilized for Qorvo’s highly integrated advanced cellular portfolio. The transaction of an undisclosed amount is expected to be completed by the first half of 2024 subject to regulatory approvals and mandatory closing conditions.
Luxshare is a global advanced contract manufacturer, offering seamless and flexible access to top-tier production capacity. Through this strategic divestment, Qorvo is aiming to leverage Luxshare's scalable and high-volume manufacturing expertise to enhance resilience within its supply chain network while maintaining premium quality standards.
The deal will support management’s efforts to reduce capital intensity in Qorvo’s business operations. Streamlining the manufacturing network will likely drive efficiency, free up investment commitment in this facility and provide greater flexibility in allocating resources. This initiative is aligned with Qorvo’s long-term gross margin objectives. Notably, Qorvo will continue to operate its manufacturing network in the United States, Costa Rica and Germany for assembly, packaging and testing.
Luxshare will take over the operations, assets and the existing workforce of the facilities. In accordance with a long-term supply agreement, it will assemble and test products for Qorvo and ensure smooth continuity of operations. Qorvo will retain its sales, engineering, and customer support teams in China to continue serving its customers.
Qorvo is expanding its opportunities across markets, customers and product categories while maintaining its commitment to technology leadership and productivity gains. The company offers the most complete product portfolio, targeting the highest growth segments of its market, including filters, switches and tuners. Qorvo is well-positioned to win some of the industry's highest growth opportunities by leveraging its diversified product portfolio, systems-level expertise, R&D and manufacturing scale and internal assembly and test capabilities.
The company has introduced highly integrated front-end solutions that simplify and accelerate the implementation of multimode, multi-band 4G smartphones and tablets. These new RF Fusion front-end solutions showcase the company's ability to help leading OEMs quickly launch their next-generation flagship devices.
The stock has gained 19.7% over the past year compared with the industry’s rise of 12.8%.
Image Source: Zacks Investment Research
Qorvo currently carries a Zacks Rank #2 (Buy).
Other Stocks to Consider
Model N Inc (MODN - Free Report) , carrying a Zacks Rank #2 at present, delivered a trailing four-quarter average earnings surprise of 20.78%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MODN provides revenue management solutions for life sciences and technology companies, including applications for configuration, price, quote, rebate management and regulatory compliance. In the last reported quarter, it delivered an earnings surprise of 3.33%.
Arista Networks, Inc. (ANET - Free Report) , carrying a Zacks Rank #2 at present, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build cloud architecture and enhance their cloud experience. Arista delivered a trailing four-quarter average earnings surprise of 12%.
ANET holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed data center segment. Arista is gaining market traction in 200 and 400-gigabit high-performance switching products and is well-positioned for healthy growth in the data-driven cloud networking business with proactive platforms and predictive operations.
NVIDIA Corporation (NVDA - Free Report) , currently carrying a Zacks Rank #2, delivered a trailing four-quarter average earnings surprise of 18.99%. In the last reported quarter, it delivered an earnings surprise of 19.64%.
NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit. Over the years, the company’s focus evolved from PC graphics to AI-based solutions that support high-performance computing, gaming and virtual reality platforms.