Seeking Alpha

RF chipmakers, Apple suppliers rally in sympathy with Avago

  • RF component makers Skyworks (SWKS +2.7%), RF Micro (RFMD +2.9%), TriQuint (TQNT +2.5%), and Anadigics (ANAD +2.8%) are outperforming after peer Avago (AVGO +4%) blew past FQ3 estimates and issued strong FQ4 guidance, while predicting it would get a boost from "very strong product ramps in wireless." Other than Anadigics, all of the aforementioned companies are iPhone suppliers.
  • Non-RF Apple suppliers Cirrus Logic (CRUS +7%), OmniVision (OVTI +2.1%), SanDisk (SNDK +2%), and Nam Tai (NTE +3.2%) are also faring well.
  • On the FQ3 CC, Avago asserted once again the technical demands of 4G radios are helping it gain RF component share, and noted its "two largest smartphone customers" (Apple and Samsung) are ramping next-gen platforms (the iPhone 5S/5C and Galaxy Note 3). Avago says it expects its "content in both these platforms continue to improve substantially."
  • On the wireline/networking side, Avago is upbeat about improving core router demand, the adoption of 40G switches within data centers, CyOptics' sales, and strong 10G/40G optical transceiver demand. The last two are positives for JDSU, FNSR, and NPTN.
  • Goldman, RBC, and Canaccord have hiked their Avago PTs.
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