Sounds like they need more capacity to meet demand and increase their competitive advantage so they can turn around client projects more quickly.
Capitalizes on Growing Market Demand for Highly Integrated Solutions;
Uniquely Positions Skyworks to Deliver Customized Front-end Architectures;
Enhances Operational Efficiencies and Margins
WOBURN, Mass.–(BUSINESS WIRE)-- Skyworks Solutions, Inc. (NASDAQ: SWKS), an innovator of high performance analog semiconductors connecting people, places and things, today announced that it is expanding production capacity in Japan to meet the growing demand for its filter technology. Skyworks is facilitizing a two-story, 405,000 square foot facility in Osaka that will house the design, development and manufacture of filter devices to complement its industry leading front-end solutions and world-class assembly, test and packaging capabilities. With the additional capacity, Skyworks is well positioned to offer differentiated architectures for the most demanding customer applications where high performance filter technology is required - addressing the stringent technical challenges associated with tighter band spacing and coexistence across low, mid and high band LTE frequencies. The facility will be fully operational by September.
“Skyworks’ investment in filter capacity reflects our commitment to delivering the world’s most highly integrated, cost efficient and shortest cycle time front-end solutions,” said David J. Aldrich, chairman and chief executive officer for Skyworks Solutions. “Given the increasing importance of filters to our target markets and customers, we are expanding our internal capability to meet current and future demand in a world-class environment. At a higher level, our enhanced capability aligns with our unique business model of combining above market top-line growth with the best-in-class financial returns of a diversified analog semiconductor company.”
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Thank you, Chris. Take us the next step. How do you think this will affect the price of their stock?
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Thank you, Chris. Take us the next step. How do you think this will affect the price of their stock?
Edgeworm,
I’ve just written something about cause and effect and opinions.
Now, here are my thoughts about this SWKS news.
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expansion of manufacturing means they probably are getting a lot of new business
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speed of design and improved capabilities to design more and more complex systems seem to be important to customers and expanding that capability may further improve SWKS competitive position
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the location of the facility (Japan) may be an indication that business in Asia is very strong
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the choice of Japan (over China) may have something to do with guarding IP
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the market situation in China for cell phones might not be nearly as bad as people are currently fearing
So what do I think about the stock price? I think SWKS is undervalued (IMO). I’ve made a very large bet that the stock will be higher in the future. But don’t take my word for it; form your own opinion!
Chris
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Chris - Japan may have offered tempting subsidies. They might want to counter balance over dependency on China. But also the Japanese Yen is at an incredible low point. Now is a pretty good time to invest there - in property and other assets/spend.
A
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405,000 square foot facility in Osaka that will house the design, development and manufacture of filter devices
I don’t know if you picked up on this. They are putting design engineers (the “what” to build people), manufacturing engineers (development, the “how” to build it people) and manufacturing (the people who build it) in the same facility.
May seem trivial or unimportant, but getting all these people co-located so that they play nicely with one another is incredibly important. It is not uncommon to have these folks separated (sometimes by continents and several time zones). Whenever problems arise, which is inevitable, they are exacerbated by separation or the solutions expedited by co-location.
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