Skyworks stock plummets as Apple turns to competitor

Skyworks Solutions, a supplier of wireless communications chips for Apple, experienced a nearly 25% decline in its stock price on Thursday after revealing it is losing iPhone-related business to a competitor, believed by analysts to be Broadcom.
Laura Bratton for Yahoo Finance:
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Skyworks makes chips used in Apple devices that are crucial for wireless communication. According to the company, Apple accounted for 72% of its roughly $1 billion in revenue for the December quarter. And 85% of that revenue from Apple was from sales of Skyworks components for Apple’s iPhone.
While Skyworks’ quarterly results Wednesday after the bell topped Wall Street analysts’ expectations, CFO Kris Sennesael said in a post-earnings call that Apple is now dual-sourcing chips that it had solely sourced from Skyworks. Apple’s move to dual-source radio frequency components for the iPhone 17 would reduce its demand for Skyworks’ products by 20% to 25%, Sennesael said. Stifel, Raymond James, and TD Cowen analysts believe Apple’s second supplier is Broadcom…
Skyworks had already lost a chunk of its business with Apple to Qualcomm last year, Stifel analyst Ruben Roy noted Thursday, downgrading the stock to a Hold rating… Roy said the company gaining back share of Apple orders “is not a likely event” until Apple fully shifts to making its own 5G modems for its iPhones, rather than using Qualcomm’s, which would present a further revenue opportunity for Skyworks.

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MacDailyNews Take: In December, Bloomberg News reported that Apple is set to introduce its own custom-designed cellular modem chips in 2025, marking a significant step towards reducing reliance on third-party suppliers like Qualcomm. This long-awaited development – more than half a decade in the works – will initially be featured in the fourth generation iPhone SE, scheduled to be unveiled as early as next week.

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