Skyworks Concludes Conexant Assembly and Test Business; Enables Skyworks to Expand Gross Margins
June 02 2005 - 4:30PM
Business Wire
Skyworks Solutions, Inc. (NASDAQ:SWKS), a global leader in analog,
mixed signal and digital semiconductors for mobile communications
applications, today announced that beginning next quarter the
company will conclude its obligation to support Conexant Systems'
second sourcing of assembly and test manufacturing services. As
part of a 3-year contract that was created at the time of the
spin-off in June 2002, Skyworks committed to fulfilling a portion
of Conexant's lead frame production. Skyworks' revenue from
Conexant's assembly and test business averaged $10 million per
quarter last year, was $5 million last quarter, and will cease in
the September quarter. This decline was anticipated at the time of
the original agreement, as it was expected that Conexant would
transition to merchant suppliers, and that, in parallel, Skyworks
would grow its core business base. Given Skyworks' aggressive plans
to improve gross margin, the company has opted not to pursue
merchant assembly and test opportunities. "After fulfilling our
manufacturing support obligation to Conexant on June 30, we can
focus exclusively on building leading-edge mobile platform
solutions and next-generation linear products at our Mexicali
assembly and test facility," said Allan M. Kline, vice president
and chief financial officer for Skyworks. "While the Conexant lead
frame business generated revenue, it was at cost per our contract.
With this agreement coming to a conclusion, and our decision not to
seek other merchant lead frame business, we can now accelerate our
gross margin expansion." More details will be provided during the
company's third fiscal quarter earnings conference call, which is
scheduled for July 21, 2005, after the market close. About Skyworks
Skyworks Solutions, Inc. is a global leader in analog, mixed signal
and digital semiconductors for mobile communications applications.
The company's power amplifiers, front-end modules, direct
conversion transceivers and complete system solutions are at the
heart of many of today's leading-edge multimedia handsets, cellular
base stations and wireless networking platforms. Skyworks also
offers a portfolio of highly innovative linear products, supporting
a diverse set of automotive, broadband, industrial and medical
customers. Headquartered in Woburn, Mass., Skyworks is worldwide
with engineering, manufacturing, sales and service facilities
throughout Asia, Europe and North America. For more information,
please visit the Skyworks Web site at: www.skyworksinc.com. Safe
Harbor Statement This news release includes "forward-looking
statements" intended to qualify for the safe harbor from liability
established by the Private Securities Litigation Reform Act of
1995. These forward-looking statements include information relating
to future results of Skyworks (including certain projections and
business trends). Forward-looking statements can often be
identified by words such as "anticipates," "expects," "intends,"
"believes," "plans," "may," "will," "continue," similar
expressions, and variations or negatives of these words. All such
statements are subject to certain risks and uncertainties that
could cause actual results to differ materially and adversely from
those projected, and may affect our future operating results,
financial position and cash flows. These risks and uncertainties
include, but are not limited to: global economic and market
conditions, such as the cyclical nature of the semiconductor
industry and the markets addressed by the company's and its
customers' products; demand for and market acceptance of new and
existing products; the ability to develop, manufacture and market
innovative products in a rapidly changing technological
environment; the ability to compete with products and prices in an
intensely competitive industry; product obsolescence; losses or
curtailments of purchases from key customers or the timing of
customer inventory adjustments; the timing of new product
introductions; the availability and extent of utilization of raw
materials, critical manufacturing equipment and manufacturing
capacity; pricing pressures and other competitive factors; changes
in product mix; fluctuations in manufacturing yields; the ability
to continue to grow and maintain an intellectual property portfolio
and obtain needed licenses from third parties; the ability to
attract and retain qualified personnel; labor relations of the
company, its customers and suppliers; economic, social and
political conditions in the countries in which Skyworks, its
customers or its suppliers operate, including security and health
risks, possible disruptions in transportation networks and
fluctuations in foreign currency exchange rates; and the
uncertainties of litigation, as well as other risks and
uncertainties, including but not limited to those detailed from
time to time in the company's filings with the Securities and
Exchange Commission. These forward-looking statements are made only
as of the date hereof, and the company undertakes no obligation to
update or revise the forward-looking statements, whether as a
result of new information, future events or otherwise. Note to
Editors: Skyworks and Skyworks Solutions are trademarks or
registered trademarks of Skyworks Solutions, Inc. or its
subsidiaries in the United States and in other countries. All other
brands and names listed are trademarks of their respective
companies.
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