Skyworks Solutions, Inc. SWKS recently unveiled solutions from its Sky5 platform that has been authorized to support wireless 5G networks.
Sky5 solution is a platform that deals with revolutionary 5G applications. Skyworks’ new white paper is specially designed to meet growing demand of sub-6 GHz 5G new radio (NR) usage cases. The products include components that support new 5G waveforms and spectrum, and cater to low, mid, high, and ultra-high cellular frequency bands.
According to the press release, “Our innovative Sky5™ platform is enabling up to a 100x increase in data transfer speeds versus 4G/LTE, near zero latency and expanded carrier capacity.”
Scope of 5G
Notably, 5G has achieved rapid traction on the back of tremendous advancement of technology over the past year. In the near future, operators will be required to support trillions of IoT devices which are anticipated to be wirelessly connected. This has huge technical implications, and its implementation will entail huge time and costs.
5G, which marks a revolution in the field of communications and technology, is anticipated to accumulate connections starting 2020. By 2021, there is likely to be 25 million 5G connections worldwide. Moreover, 5G mobile handsets will be available for sale in the market by 2020, following a broader rollout of the technology.
Per GSMA, “5G will primarily support enhanced mobile broadband in early deployments.” Moreover, per GSMA report, the 5G network infrastructure market is expected to reach 1.1 billion and predicts total operator revenues to reach $1.3 trillion by 2025.
Further, per May 2017 Research and Markets report, the 5G network infrastructure market is expected to grow at a CAGR of 70% between 2019 and 2025. This will eventually account for $28 billion in annual spending by the end of 2025.
Consequently, Skyworks is well-positioned to capitalize on the 5G based infrastructures with a rising demand for high-performance analog solutions in new markets.
Bottom Line
Skyworks is benefiting from its portfolio strength, particularly in the 5G applications and IoT market. Further, the company continues to win content at mobile and OEMs like Huawei, Samsung, Oppo, Vivo, LG and Nokia. Notably, the upcoming 5G upgrade cycle is also a major positive.
In terms of competition, management believes that Qualcomm QCOM, despite pursuing programs that Skyworks is already a part of, is not a major threat. Moreover, the trade war between the United States and China will not have much impact on the company’s top-line.
Zacks Rank & Key Picks
Skyworks currently carries a Zacks Rank #3 (Hold).
Few better-ranked stocks in the broader technology sector are Salesforce.com Inc CRM and Aspen Technology, Inc. AZPN, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The projected earnings growth rate (3-5 years) for Salesforce and Aspen are 25% and 16.5%, respectively.
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