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Skyworks and Qorvo to merge

O

osnium

Well-known member

Skyworks and Qorvo to Combine to Create $22 Billion U.S.-Based Leader in High-Performance RF, Analog and Mixed-Signal Solutions​


Key Highlights
  • - Enhances scale with revenue of $7.7 billion and Adjusted EBITDA of $2.1 billion1
  • - Combines complementary product and technology portfolios and world-class engineering capabilities, creating R&D scale to deliver innovative RF solutions
  • - Creates $5.1 billion mobile business positioned to address rising RF complexity
  • - Establishes $2.6 billion diversified Broad Markets platform with a growing and profitable TAM across defense & aerospace, edge IoT, AI data center and automotive markets
  • - Advances U.S. manufacturing position and improves factory utilization across manufacturing footprint
  • - Immediately and meaningfully accretive to non-GAAP EPS post-close, with $500 million or more of annual cost synergies within 24-36 months post-close when the companies are fully integrated
  • - Phil Brace will serve as chief executive officer of the combined company; Bob Bruggeworth will join the Board of Directors of the combined company

www.globenewswire.com

Skyworks and Qorvo to Combine to Create $22 Billion U.S.-Based Leader in High-Performance RF, Analog and Mixed-Signal Solutions

Skyworks and Qorvo to Combine to Create $22 Billion U.S.-Based Leader in High-Performance RF, Analog and Mixed-Signal Solutions...
www.globenewswire.com www.globenewswire.com

Skyworks will be acquiring Qorvo assuming that the regulators approve
 
swka said:
other than the economy of scale and the usual benefit coming from such merger, how would this move change the fact neither companies are seen as innovating?
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Probably only efficiency benefits because the smaller company's corporate staff can be reduced, like in finance, legal, HR, etc, only one BoD, better terms with banks and insurers... lots of little things that add up. I suspect R&D orgs can be combined too, and they can probably shed some senior management and even engineers.

In other words, higher gross and net margins even if the revenue is only S + Q.
 
blueone said:
Probably only efficiency benefits because the smaller company's corporate staff can be reduced, like in finance, legal, HR, etc, only one BoD, better terms with banks and insurers... lots of little things that add up. I suspect R&D orgs can be combined too, and they can probably shed some senior management and even engineers.

In other words, higher gross and net margins even if the revenue is only S + Q.
Click to expand...
understood. those typically happens for mergers like these. I am just hoping there are better focus on addressing their broad application area with more innovations, instead of essentially milking what they have. I have seen many startups attempting to attack specific market with great new tech .
 
swka said:
understood. those typically happens for mergers like these. I am just hoping there are better focus on addressing their broad application area with more innovations, instead of essentially milking what they have. I have seen many startups attempting to attack specific market with great new tech .
Click to expand...
I agree, but as the announcement said, they've already identified $500M of "cost synergies".
 
Paul2 said:
No, they are about to try to corner the market. The supplier list for RF frontend ICs grows smaller by the day, and it's clear as day what they will do.

Pump prices 10x
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There is stiff competition from Taiwanese and Chinese vendors for compound semiconductors.
 
Acquire the IP, cull the workforce, squeeze whoever remains, use buybacks and dividends to pump up the ticker, and then nobody will notice that nothing of value was created because of the internal chaos implicit to these mega mergers. It worked for ADI, so why not Skyworks. Analog companies are in the same position as memory companies 30-40 years ago, except swap Japan for China.
 
coldsolder215 said:
Acquire the IP, cull the workforce, squeeze whoever remains, use buybacks and dividends to pump up the ticker, and then nobody will notice that nothing of value was created because of the internal chaos implicit to these mega mergers. It worked for ADI, so why not Skyworks. Analog companies are in the same position as memory companies 30-40 years ago, except swap Japan for China.
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Is your sense that analog companies based outside of China due for a reckoning? I know in GaN power electronics, Innoscience is a formidable competitor and in conventional III-Vs, Sanan and other mainland companies are very formidable as well. The barrier to entry is lower and China has a lot of materials science expertise that they can leverage.
 
osnium said:
Is your sense that analog companies based outside of China due for a reckoning? I know in GaN power electronics, Innoscience is a formidable competitor and in conventional III-Vs, Sanan and other mainland companies are very formidable as well. The barrier to entry is lower and China has a lot of materials science expertise that they can leverage.
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I think so, although my company is probably more vulnerable than say a TI who has maintained more efficient, flexible vertical integration as well as domestic capacity for CHIPS money. We tell investors that we're moving up the stack to generate more value, but really it's a retreat because the margins for components are a fraction of what they used to be. Lower management is totally paralyzed by risk and unwilling to do anything that doesn't involve a line of customers waiting with money in hand, while upper management is a game of musical chairs and golden parachutes waxing lyrically about AI and agility and innovation, and it's just a total disconnect.

Besides that, the US trade war is a historic self-own which no individual company can overcome. We had a big design site in Beijing and were sending them all kinds of work and IP, and all of that evaporated in a few months because folks there could double their salary working for indigenous Chinese companies. Novosense is the one eating my group's lunch and they're all former employees whose names I still come across on schematics from time to time. So not only has CHIPS failed to materialize any meaningful gains for US semiconductors beyond potemkin fab shells in the midwest, it has directly benefitted our Chinese counterparts in materially meaningful ways.

Another fun example is golden boy Nvidia just bought out the entire supply chain of laminate materials for the next 5 years from the one company in Japan that makes it, so the rest of the industry is currently freaking out scrambling for another source. Assuming the AI stuff comes to fruition, how the hell is that going to work out for them if they're the only ones who can package chips for their server racks? This is the best that a economic system with zero centralized planning can achieve.
 
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