Will Apple's 5G Modem Development Sink Skyworks Solutions?
For Skyworks Solutions (NASDAQ: SWKS), it's a good time to be an Apple (NASDAQ: AAPL) parts supplier. The 5G mobility upgrade cycle is underway as consumers buy new iPhones and other devices that can connect to new 5G networks, and these next-gen connectivity semiconductors that it designs fetch a higher price than older 4G and 3G mobile chips. Apple represented just over half of Skyworks' sales in 2020, and as more 5G capable iPhones ship, Skyworks' revenue is soaring, too.
But there's always a risk that Apple might pull the rug out from its suppliers and start developing its own silicon in-house. In fact, rumors abound that Apple is working on its own 5G baseband modem. Thus, in a multi-year effort to diversify its business away from the tech giant, Skyworks recently announced it's plopping down $2.75 billion to acquire the automotive and network infrastructure segment of Silicon Labs (NASDAQ: SLAB) -- a great long-term investment in case Apple ever decides to part ways.
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Source Fool.com
