A few days after Apple (AAPL) reported lower-than-expected iPhone sales for the months preceding its iPhone 12 launches, Skyworks (SWKS) , Cirrus Logic (CRUS) and Silicon Motion (SIMO) provided reminders that business is still pretty good for most mobile chip suppliers.
All three companies comfortably beat their September quarter estimates and issued strong December quarter guidance, with Skyworks and Cirrus issuing sales guidance ranges that were more than $100 million above consensus estimates. Each company also indicated that (after falling sharply this spring) smartphone demand continues rebounding well ahead of the holiday season.
Moreover, in their own ways, Skyworks, Cirrus and Silicon Motion each provided examples of how technology transitions and rising silicon content within smartphones are helping various mobile chip suppliers grow their top lines at a faster rate than smartphone unit sales.
Skyworks, not surprisingly, reiterated that the demanding RF front-end needs of 5G phones are boosting its top line as 5G phone shipments ramp. The company also noted that it's seeing strong 5G design win traction not only with Apple and Samsung, but also with Chinese OEMs such as Oppo, Vivo and Xiaomi.
Cirrus, which has long received much of its revenue from shipments of audio codec and amplifier chips to Apple, noted that it's also now seeing strong amplifier and haptic drive IC design win activity for Android phones, as OEMs look to improve audio quality and add more advanced haptic functions within devices.
Silicon Motion said that it expects the smartphone industry's transition from eMMC to more advanced UFS flash memory controllers to be a growth driver in Q4 and 2021. The company estimates about half of all smartphones now ship with UFS controllers, up from about a third in 2019.
Notably, Skyworks, Cirrus and Silicon Motion also highlighted the strong growth they're seeing from various non-smartphone end-markets, aided by trends such as strong consumer hardware spending, SSD adoption and/or 5G network rollouts.
Skyworks' "broad markets" revenue -- it covers sales of chips going into cars, IoT devices, Wi-Fi access points, 5G base stations and various other non-smartphone products -- rose 30% sequentially and a double-digit percentage annually, and was forecast to rise again sequentially in the December quarter.
Cirrus is getting a lift from growing sales of amplifiers and haptic driver ICs used within tablets, wearables and other non-smartphone products, and it expects to get a boost next year from shipments of an audio codec chip meant for wireless headsets. Silicon Motion's SSD controller business is benefiting from strong notebook-related demand, though the company did note cloud-related demand was soft in China.
A lot of these trends are also quite relevant for Qualcomm (QCOM) and Qorvo (QRVO) , which are set to report on Wednesday afternoon, as well as other mobile chip suppliers such as Broadcom (AVGO) and STMicroelectronics (STM) .
Like Skyworks, Qualcomm, Qorvo and Broadcom are benefiting from 5G's impact on smartphone chip content. In addition, Skyworks, Cirrus and Silicon Motion, Qualcomm and Qorvo have decent exposure to consumer end-markets other than smartphones, with Qorvo also meaningfully exposed to the 5G base station market.
The shares of many mobile chip suppliers have already priced in a decent amount of good news -- that, along with some gross margin concerns, was why Skyworks moved lower post-earnings. But as the seasonally strongest time of the year for the smartphone market draws closer, these companies still generally don't have much to complain about demand-wise.