So don’t be surprised to see Synaptics’ results and guidance outperform Wall Street’s expectations when the company releases its first-quarter results for fiscal 2021 in the first week of November.
2. Skyworks Solutions is likely to step on the gas
Skyworks Solutions has scheduled the release of its fiscal 2020 fourth-quarter results for Nov. 2. The chipmaker expects its top line to return to growth and earnings to remain flat, but there is the possibility of the chipmaker outperforming its own expectations.
That’s because Skyworks gets just over half of its revenue from selling radio-frequency (RF) chips to Apple, which is a market that’s expected to record terrific growth thanks to the advent of 5G smartphones. A third-party report points out that the 5G RF transceiver market could clock a compound annual growth rate of 30.4% over the next decade.
Skyworks’ peer Qorvo has also pointed out that each 5G smartphone could create an additional content opportunity of $5 to $7 for RF chipmakers. As a result, Skyworks stands to gain from a combination of both volume and content growth from the latest generation of iPhones, which are expected to become Apple’s greatest hit since the iPhone 6 sold close to 136 million units in two quarters after its launch.
DigiTimes predicts that Apple could ship more than 80 million units by the end of the year, which varies significantly from what Wedbush estimates. As a result, Apple suppliers are reportedly bumping up incentives for assembly line workers to increase output.
However, Skyworks is simply scratching the surface right now. Apple’s strong share in key 5G markets such as the U.S. and Skyworks’ relationships with other major smartphone OEMs such as Samsung are likely to unlock a multi-year growth opportunity for the chipmaker. A teardown of the Galaxy S20 Ultra 5G smartphone — Samsung’s 2020 flagship — revealed a lot of Skyworks content inside the device.
The share of 5G smartphones as a percentage of the global market is expected to grow from less than 12% this year to more than 51% by 2023 as per third-party estimates. Considering the tailwinds it is sitting on, Skyworks Solutions could be a top 5G stock to take advantage of the market’s long-term growth.
article was originally posted by The Motley Fool.