Skyworks Solutions, Inc. (SWKS) recently announced a joint venture with global electronics products leader Panasonic Corporation (PCRFY) for developing high-performance filter solutions. As part of the deal, Skyworks will pay $148.5 million in cash for a 66% stake in the venture with Panasonic holding the remaining 34%. The transaction is expected to close by the third quarter of 2014.
The joint venture aims to design, develop and deliver filters such as surface acoustic wave (SAW) and temperature compensated (TC) SAW devices.
The transaction is complementary to Skyworks’ strategic investments in high-performance bulk acoustic filters and brings innovative products to the rapidly growing mobile connectivity and Internet markets. It aims to develop customized solutions for all band configurations with filter technology applicability, spanning high, mid and low band frequencies. The transaction is a win-win situation for both the companies.
There is growing demand for high-performance TC SAW filters which enable the dense packing of bands. Panasonic has an edge in SAW filter products and is the largest producer of TC SAW filters with approximately 250 million units shipped to date.
Panasonic's high-performance filter portfolio is competitive in comparison to other similar products in the market. With the reduced size and weight, lower distortion and low insertion loss, the new venture leverages the core strength of both companies and serves the fast growing filter market in an effective manner. Also, Skyworks’ product breadth and integration capabilities coupled with Panasonic’s leadership in filtering are expected to be beneficial for both the companies. The transaction is expected to be immediately accretive to Skyworks’ margins and earnings per share.
Skyworks designs, manufactures, and markets a broad range of high performance analog and mixed signal semiconductors that enable wireless connectivity.
Skyworks currently has a Zacks Rank #1 (Strong Buy). Other stocks that look promising and are worth a look now include Broadcom Corp. (BRCM) and TriQuint Semiconductor, Inc. (TQNT), both carrying a Zacks Rank #2 (Buy).
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