Skyworks Solutions, Inc. (SWKS) Experience Minor Fluctuation Following Acquisition Announcement

Skyworks Solutions, Inc. (SWKS) stock prices were down by a marginal 1.71% as of market close on April 22nd, 2021, bringing the price per share to USD$183.42 at the end of the trading day. SWKS stock gained 4.25% to $191.21 in the after-hours trading session.


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Acquisition of Silicon Labs

The company announced on April 22nd, 2021 that it would be acquiring Silicon Laboratories’ infrastructure and automotive unit. The deal is priced at USD$2.75 billion and will be paid in full with cash and debt financing that has been facilitated by J.P. Morgan.

Benefits of Acquiring Silicon Labs

The acquisition is expected to significant broaden the company’s capability to create substantial and promising opportunities in high-growth end markets such as the automotive and communications sectors. In light of the auto industry’s persistent drive towards autonomous operation, this move is particularly significant.

Finalizing of the Acquisition

SWKS hopes to consolidate its footprint in the automotive industry by expanding its clientele to include competitive up and coming next-gen manufacturers of vehicles, such as Fisker. To that end, both companies’ Boards of Directors have given the green light for the acquisition. The deal is expected to close in Q3 2021, pending approval by relevant regulatory authorities.

Collaboration with Industry Giants

With the world hurtling towards 5G connectivity, SWKS is at the forefront with its product portfolio continuing to facilitate various 5G launches by industry giants such as Samsun, Xiaomi, OPPO and Vivo. SWKS has also collaborated with MediaTek in the evolution of their 5G reference designs with a focus on automotive and various Internet of Things applications.

Collaboration Across Booming Sectors

SKWKS has also helped Volkswagen and Toyota’s safety systems with the leveraging of V2X solutions, as well as facilitating the designs of Google’s newest Fitbit health smartwatches. The company also saw Itron make use of its product and service offerings in the powering of multi-standard ISM connectivity solutions for planned smart-cities. Furthermore, Boston Scientific and General Electric Company both make use of SWKS’ essential medical applications.

SWKS Flush with Cash

With cash, cash equivalents, and marketable securities being reported at USD$1.019 billion as of January 1st, 2021, the company is flush with funds to effectively leverage further expansion. Company forecasts anticipate Q2 2021 revenues upwards of UDS$1.125 billion, with non-GAAP earnings growing by 75% year-over-year to USD$2.34 per share.

Hopeful Outlook for SWKS

With forays into such expansive and booming sectors as automotive and communications, and with the extensive capital at hand, SWKS is primed to continue its upward trajectory to hit and possibly even surpass its targets for 2021 and beyond. Needless to say, this is highly promising for both current and prospective investors who are looking for the company to continue growing its shareholder value.

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