SWKS - Too good to be true?

I am taking a close look at SWKS both for education and for a potential investment. I see a lot about this company which looks good and lots of excitement about prospects for the future. The risks all seem acceptable and comparatively mild when considering their expertise, reputation and general market position.

All this leads me to wonder: As an investment, is SWKS too good to be true?

Pondering this question I have so far come to only one thought:

My interpretation is that the story for SWKS growth is primarily linked to future growth of (a) internet connectivity and (b) general internet use/content (which requires better connectivity). Assuming this trend continues, SWKS is well positioned to take advantage of that growing market.

However, what if the potential for growth of internet connectivity is more hype than reality? Is this a true trend for the future or an over-hyped bubble which will burst? If the internet connectivity excitement is building to such a bubble, SWKS could suffer in the same way they did after the dot-com failures of 2000.

My inclination is still to invest in SWKS and the current price is looking attractive with today’s fears that a drop in iPhone demand will lead to lower demand for SWKS chips. The lemming effect has almost certainly led to an overreaction, especially following the past few months of steady decline in the stock price.

Yet I still can’t help but wonder if SWKS is too good to be true.

Thoughts?

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After today’s 6% hair cut, I wanted to make sure I understood what SWKS does. So I read this company overview:

The Company’s portfolio includes amplifiers, attenuators, circulators, demodulators, detectors, diodes, directional couplers, front-end modules, hybrids, infrastructure radio frequency (RF) subsystems, isolators, lighting and display solutions, mixers, modulators, optocouplers, optoisolators, phase shifters, phase locked loops (PLLs), synthesizers, voltage controlled oscillator power dividers (VCOs), power dividers/combiners, power management devices, receivers, switches, and technical ceramics. The Company’s products include Front-end Modules and Amplifiers, Wireless Infrastructure, Power Management, Precision Analog Components, WiFi Connectivity, and Smart Energy.

Glad I cleared that up:-)

DT

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DoubtingThomas: Hah! Yes, it is a bit arcane to those not initiated into the dark mysteries of electronics. :wink: For my past indiscretions I understand it all but for everyone else the company’s strategy statement gives a far better understanding of what the company does than a technical overview. From the recent 10-K filing:

SKYWORKS’ STRATEGY

Skyworks’ overall strategy is to enable all forms of connectivity through semiconductor innovation. Key elements in our strategy include:

Industry-Leading Technology
As the industry migrates to more complex LTE architectures across a multitude of wireless broadband applications, we are uniquely positioned to help mobile device manufacturers handle growing levels of system complexity in the transmit and receive chain. The trend towards increasing front-end and analog design challenges in smartphones and other mobile devices plays directly into Skyworks’ core strengths and positions us to address these challenges. We believe that we offer the broadest portfolio of radio and analog solutions from the transceiver to the antenna as well as all required manufacturing process technologies. Our expertise includes BiFET, CMOS, HBT, pHEMT, SOI and silicon germanium processes. We also hold strong technology leadership positions in passive devices, advanced integration including proprietary shielding and 3-D die stacking, as well as SAW and TC SAW filters. Our product portfolio is reinforced by a library of over 2,200 worldwide patents and other intellectual property that we own and control. Together, our industry-leading technology enables us to deliver the highest levels of product performance and integration.

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Thanks for clearing that up othalan, though I am still a little unclear on how silicon germanium processes relate to voltage controlled oscillator power dividers :slight_smile:

DT
Who once soldered RS-232 connectors onto the ends of cables I strung in an attic space to create a wired LAN in our office (before there was such a thing) tying a UNIX mini computer, several MacPlus’s and 286-PCs together. I fear that I have been left behind, but still love my toys.