|In a world where more devices are getting connected to the internet, Skyworks Solutions (NASDAQ:SWKS) is a key provider of the technology that enables that connectivity. I spoke with Skyworks' CEO Liam Griffin, who explained that what Skyworks does best is craft individual solutions for each of its customers. In other words, Skyworks builds customized hardware solutions for its customers -- something that can only be done if the company forms close and long-standing relationships. This gives the company a competitive advantage that can't be easily replicated by its peers and helps explain its strong (and improving) margins and cash flow production, despite operating in the competitive semiconductor industry.|
The bulk of Skyworks' revenue has long come from smartphones, but its "broad markets" segment now accounts for about 25% of total sales. This includes everything from connectivity solutions in autonomous vehicles, the Internet of Things, headsets, WiFi routers, and more.
As consumer demand for faster and more reliable data continues to increase, don't be surprised if you hear more about 5G in the years ahead. Griffin explained that 5G connectivity will vastly expand the data pipe (meaning higher data speeds and less lag time) and expects 5G solutions to account for 20% or more of the company's overall revenue within the next three to five years.