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Skyworks' Foray in Car Infotainment

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Skyworks Solutions Inc. (SWKS - Free Report) , a leading semiconductor manufacturer, recently disclosed that its Silicon-on-insulator (SOI) switching technology for infotainment systems is being increasingly deployed by car manufacturers across the world. The observation comes as a fresh lease of life for the company that is bearing the burnt of continuous price wars and intense competition from its rivals as the industry faces a booming demand for technologically advanced products.

The solid state technology utilized by Skyworks enables seamless transition to low noise and broadband switching among the various media sources in automobiles, such as, audio, Blu-ray/DVD, navigation, cell phone and vehicle security display inputs. The ultra-broadband RF (radio frequency) switches used by Skyworks offer greater reliability at a relatively low cost compared to other available products in the offing. Consequently, Skyworks’ products are increasingly gaining popularity across the globe.

Skyworks Solutions designs, manufactures, and markets a broad range of high performance analog and mixed signal semiconductors that enable wireless connectivity. The company’s products include power amplifiers (PAs), front-end modules (FEMs), RF sub-systems, and cellular systems. Leveraging its core analog technologies, the company also offers a diverse portfolio of linear integrated circuits (ICs) that support automotive, broadband, cellular infrastructure, industrial and medical applications.

Moving forward, Skyworks intends to capitalize on three business segments − mobile Internet, vertical markets and analog components. Demand for mobile Internet applications is on the rise with the broad proliferation of smartphones, net books, note books, caplets and other forms of embedded wireless devices. Skyworks expects to consolidate its position in the mobile Internet spectrum with a broad array of products that covers everything from net books and data cards to smartphones, and even entry-level handsets

The market for smartphones is also reportedly growing four fold compared to the traditional cellular handset. The rising RF dollar content and increasing complexity associated with the proliferation of smartphones and an array of other mobile Internet devices are fueling the total available market (TAM) growth, providing a unique opportunity for Skyworks to expand. Management further expects an upsurge in smartphone adoption in the developing countries such as India.

However, the company needs to be wary of a stiff competition from other players in the industry such as RF Micro Devices Inc. and DSP Group Inc. (DSPG - Free Report) – each carrying a Zacks Rank #1 (Strong Buy), and Anadigics, Inc. carrying a Zacks Rank #2 (Buy). Skyworks, however, presently carries a Zacks Rank #3 (Hold).

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