Skyworks’ strategy with regards to bulk acoustic wave (BAW) filters has been changing over time. Their primary goal is to be able to manufacture BAW filters themselves. The joint venture with Panasonic was vastly increased Skyworks filter manufacturing capabilities and Skyworks has been investing in increasing that capacity further.
In the interim, Skyworks has been advancing TC-SAW (temperature-compensated surface acoustic wave) filters to the point where they are capable of filtering bands which previously required BAW filters. This is a positive for customers, as TC-SAW filters are less expensive (and sometimes more compact) than BAW. But it is not a complete solution - TC-SAW is encroaching on BAW, not threatening to replace it.
Here are management comments from “recent” conference call transcripts that will give you a sense of Skyworks response to their lack of BAW capability. Italicized text is straight from the Seeking Alpha links below. I’ve added some additional text (in brackets and not italicized) for clarity.
3Q14: “There are more and more narrow band spacing where we can provide a great differentiated product with a TC SAW, and Panasonic is a performance and IP leader there, hands down. And we see a limited number of bands where we need to partner for BAW acoustic processes, which we are doing. So we have a complete offering, and I think we’re the only company in the world that is offering modules that incorporate SAW, TC SAW and BAW. And so it not only gives us the ability to eliminate margin stacking as we buy filters, we now will produce them, but it also gives us a competitive advantage to move TC SAW into more and more bands.”
4Q15: “And with respect to bulk acoustic technology, we do see that there are bands that we’re going to need and so between partnerships and our own internal development, we expect to be in production with BAW devices by 2017.”
“… we’ve added about a tripling of capacity with the new factory … we acquired, we’ve been outfitting. That’s why you saw a little bit of increase in the capital [expenditures].”
“… and further to that, think of this as a high performance filter site, all topology. So bulk acoustic wave opportunities, temperature compensated surface acoustic wave, standard surface acoustic wave. It is a first-class facility and we’re funding it in the right way. We’ve got great people, qualified proven people. We’re upping our game in design engineering. We’ve got a war chest of IP [Intellectual Property acquired with the Panasonic joint venture]. So this is going to be a real driver, a competitive driver, for us.”
[The CFO pointed out that Skyworks is leasing the factory (OpEx), but buying equipment to place in the factory (CapEx).]
1Q16: “if you look across the world today, most world phones, most smartphones don’t use BAW technology, they have a different configuration or a different band lineup that doesn’t require it. But for those customers who are looking for sort of a low, mid, high, very-high performance, truly a world phone, what BAW will do will open up high band for us, in which we don’t participate, market we do not participate in today. So it will increase our TAM and we’ll get there by '17.”
I hope this helps.
Thanks and best wishes,
TMFDatabaseBob (long: SWKS)
Peace on Earth