Skyworks Solutions Stock Plunges as Apple Switches to Dual-Sourcing Chips
Key Points:
* Skyworks Solutions (SWKS) stock dropped nearly 25% after announcing a loss of share in the iPhone chip market to a competitor, believed to be Broadcom (AVGO).
* Apple's decision to dual-source radio frequency components for the iPhone 17 will reduce demand for Skyworks' chips by 20-25%.
* Skyworks previously lost business to Qualcomm (QCOM) and the latest move could impact its revenue by $600 million in 2025.
* The company announced a CEO shake-up, replacing Liam Griffin with Philip Brace.
Apple Diversifies Chip Suppliers
Skyworks, a major supplier of chips used in Apple devices, disclosed that Apple is now sourcing chips from multiple vendors. This decision reduces Apple's reliance on Skyworks and presents a revenue challenge for the company.
Impact on Skyworks
Skyworks' CFO Kris Sennesael stated that the loss of Apple's exclusive business will impact the company's revenue. Analysts estimate that this could result in a $600 million revenue loss in 2025.
Industry Analysts Weigh In
Analysts from Stifel, Raymond James, and TD Cowen believe Apple's second supplier is Broadcom. Some analysts remain cautious about Skyworks' prospects, while others see the potential for a recovery once Apple transitions to producing its own 5G modems.
CEO Shake-Up Adds Uncertainty
Amidst the market uncertainty, Skyworks announced the departure of CEO Liam Griffin and his replacement with Philip Brace. The timing of the leadership change has raised questions among analysts.