News: Microelectronics
6 August 2026
Skyworks’ Mobile revenue drop offset by automotive and data-center growth
For its fiscal third-quarter 2026 (ended 3 July), Skyworks Solutions Inc of Irvine, CA, USA (which manufactures analog and mixed-signal semiconductors) has reported revenue of $934.8m, down 1% on $943.7m last quarter and 3.1% on $965m a year ago, but above the mid-point of the $900–950m guidance range.
Skyworks’ largest customer (Apple) accounted for about 57% of total revenue (down from 63% a year ago, after a 20–25% loss in chip content allocation at Apple which, in February, decided to dual-source a premier RF socket for the iPhone 17).
Mobile product revenue has hence declined by low-single-digits sequentially to about $541m, comprising 57% of total revenue (down from 62% a year ago). However, the sequential decline is less than the expected Apple-induced 20–25%, due to the content loss being offset by strength in unit-volume at Apple. “In mobile, we executed well in what is seasonally a lighter quarter, with revenue slightly ahead of our expectations, supported by healthy sell-through at our largest mobile customer and strong execution of new product ramps at our largest Android customer,” says CEO & president Phil Brace.
Broad Markets product revenue (edge IoT, automotive, industrial, infrastructure, and cloud) was about $403m, up 8% year-on-year, comprising 43% of total revenue (up from 38% a year ago).
The three growth engines (Wi-Fi, data center and automotive) again represented nearly two-thirds of Broad Markets revenue and collectively grew 15% year-on-year. In particular, data-center business is growing more quickly than Skyworks’ previous guidance. This was despite being supply constrained. “Demand for these products continues to run well ahead of what we can currently supply,” notes Brace. “We are actively working to close that gap,” he adds. “Offsetting that, we’ve seen some softness in more of the consumer-exposed [IoT] areas of the Broad Markets business.”
On a non-GAAP basis, gross margin has fallen further, from 47.1% a year ago and 45% last quarter to 44.9%, as margins remain pressured by input costs rising more quickly than any cost cutting that Skyworks has been able to make in other areas.
Operating expenses were $238m, slightly below the midpoint of the $235–245m guidance as Skyworks continues to fund high-return R&D programs while maintaining tight control over discretionary spending.
Net income has fallen further, from $200.4m ($1.33 per diluted share) a year ago and $173m ($1.15 per diluted share) last quarter to $163.7m ($1.08 per diluted share, but this is above the $1.03 guidance).
Operating cash flow was $70.4m. Capital expenditure has risen further, from $61.4m a year ago and $82.3m last quarter to $87.1m, due partly to increasing internal manufacturing capacity but mostly related to planned inventory build ahead of the September mobile ramp for Skyworks’ largest customer.
Free cash flow has therefore been cut from –$32m (free cash flow margin of –3.4%) last quarter to -$16.7m (free cash flow margin of –1.8%).
During the quarter, cash, cash equivalents and marketable securities fell from $1436.4m to $813.8m, mainly as a result of retiring $500m of notes that became due. This reduced debt from $996.6m to $497m.
September-quarter revenue to return to growth
For the fiscal fourth-quarter 2026 (to end-September), Skyworks expects revenue to grow to $1010–1060m.
Broad Markets is expected to grow by about 5% year-on-year, comprising about 39% of total revenue.
Mobile should grow sequentially in the high-teens range (rising to 61% of total revenue), supported by the seasonal ramp of new product launches at Skyworks’ largest customer, partially offset by the firm’s Android customer (which was very strong in fiscal Q3).
“Demand in Mobile remains solid as we head into the Fall launch cycle,” says Brace. “Our book-to-bill is above 1. Inventory in the channel remains lean,” notes chief financial officer & senior VP Philip Carter.
Gross margin should be 44–45%. “This reflects the seasonal shift in mix towards mobile as new product ramps reach full volume,” says Carter.
Operating expenses should be $235–245m, as Skyworks continues to invest in its key technology roadmaps.
The rise in input costs is expected to persist. “We are working to offset this through cost reductions and selective pricing adjustments,” says Carter.
“Our guidance includes approximately $5m in incremental net interest expense, or approximately $0.03 per share, reflecting a partial quarter of financing costs associated with the pending Qorvo acquisition,” notes Carter. Skyworks expects diluted earnings per share to increase to $1.27.
Strong demand in data-center, automotive and Wi-Fi segments
The growth outlook is supported by strong demand in the data-center, automotive and Wi-Fi segments. Recent business highlights are cited as:
- expanded automotive design-win pipeline, securing telematics and in-vehicle infotainment engagements with leading global OEMs;
- expanded AI data-center design-win pipeline, including precision timing for a hyperscaler switch platform and isolation solutions for 800V HVDC power architectures;
- introduced the latest power and gate-driver technologies, targeting next-generation AI data centers, electric vehicle platforms and industrial high-power applications.
“Wi-Fi 7 adoption continues as AI workloads move toward the endpoint,” notes Brace. “Design engagement is strong, backlog is solid. Our early collaboration with customers on Wi-Fi 8 positions us well,” he adds.
“In Automotive, the connected car and infotainment are driving growth today, with power and connectivity expanding our footprint over time. We are engaged with global OEMs and tier-one suppliers on multi-year vehicle platforms,” Brace says.
“AI data center, our fastest-growing business, is tracking ahead of the 50% annual growth we outlined last quarter, even with supply constraints… We’ve seen definitely tightness across the board in some of those products that are growing faster,” says Brace. “We’re engaged with leading customers on two fronts: high-speed connectivity as the industry moves to 800Gb and 1.6Tb platforms, and power as it shifts to 400V and 800V HVDC architectures. Rising data rates and rack density are driving demand for our precision timing and advanced power delivery solutions. Together, these engines are reshaping the mix of our Broad Markets business and validating the diversification strategy we’ve been executing.”
Financing plan, combined leadership team, and new capital allocation framework prepared for Qorvo merger
“The balance sheet is well positioned to support the Qorvo transaction,” reckons Carter. “In connection with the transaction, we anticipate raising approximately $2bn of debt financing in the near term, subject to market and other conditions in preparation for an earlier close,” he adds.
“We continue to advance the regulatory process for our pending combination with Qorvo,” notes Brace. “We are now optimistic that we can close within the calendar year, and we will be preparing to close as early as within the fiscal year.”
In conjunction, Skyworks’ board of directors has approved a new capital allocation framework for the combined company. Reflecting the expected robust free cash flow and adjusted EBITDA generation, the framework provides the flexibility to repurchase shares, de-lever the balance sheet, and pursue opportunistic, accretive M&A, to help continue to diversify the businesses.
Accordingly, Skyworks’ board has replaced the stock repurchase program expiring in February 2027 with a new $2bn stock repurchase program expiring in January 2029, and the company has decided not to declare any quarterly dividends going forward, redirecting that capital toward these higher-return uses. “We expect stock repurchases to be a key vehicle for returning capital to shareholders,” says Brace. “This framework returns more value to shareholders over time with far greater flexibility,” he adds.
“The steps we’re announcing today — our financing plans, the combined company’s expected leadership team, and a new capital allocation framework — are about being ready to execute from day one,” Brace summarizes.
“The strategic logic of this combination is simple: scale and diversification. In Mobile, we’re creating a best-in-class RF portfolio with complementary capabilities that expands our reach across platforms and drives greater revenue stability. In Broad Markets, we’re building a larger, more diversified business across defense & aerospace, edge IoT, AI data center, and automotive, a key growth platform for the combined company,” says Brace.
“The same scale is what drives our cost opportunity, and we continue to make good progress in integration planning and remain confident in our ability to realize the anticipated synergies of $500m or more.”
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