Through the merger, another global industry giant may emerge.
Recently, Skyworks, one of the two major US radio frequency chip giants ... Skyworks and Qorvo announced their merger, creating a large company valued at $22 billion. Skyworks and Qorvo are best known as supply chain companies, both being key suppliers of radio frequency (RF) chips for iPhones.
It is understood that the global RF front-end market is highly concentrated and has long been dominated by Qualcomm. Broadcom The global RF front-end chip market is dominated by a few major international giants such as Broadcom, Skyworks, Qorvo, and Murata. According to data from industry research firm Yole, in 2024, the top four manufacturers in the global RF front-end market were Broadcom , Skyworks, Qualcomm , and Qorvo. If all goes according to plan, based on the estimated market share of these manufacturers in 2024, the combined market share of Skyworks and Qorvo would reach 27%, or exceed Broadcom 's 16%, becoming the new "king" of global RF front-end chips.
"I myself didn't know about the merger," an industry insider familiar with the radio frequency industry told the China Business Journal. He said he was unaware of it beforehand and, like many others, only found out on the day itself. "Both sides' mobile phone businesses are declining, and only by merging can they have a say."
Skyworks and Qorvo expect the transaction to close in early 2027, subject to regulatory and shareholder approval. Given Skyworks and Qorvo's leading position and market share in the RF front-end chip field, this merger may trigger strict antitrust scrutiny from regulators, and whether it will ultimately receive regulatory approval remains to be seen.
"Both companies are now facing survival pressures as Chinese manufacturers begin to rise," said Su Lianjie, an analyst at Omdia, an industry research firm. He added that regulators may not ultimately approve the merger of Skyworks and Qorvo.
Only through mergers can we gain a voice.
Under the terms of the agreement, Qorvo shareholders will receive $32.50 in cash and 0.96 shares of Skyworks stock per share. Skyworks plans to finance the cash portion of the transaction through a combination of existing cash and additional financing (already secured from Goldman Sachs) . bank (Debt financing commitments). The combined enterprise value is estimated at approximately $22 billion, with projected total revenue of approximately $7.7 billion and adjusted EBITDA of $2.1 billion.
Following the transaction, Skyworks shareholders will own approximately 63% of the combined company, while Qorvo shareholders will own approximately 37% on a fully diluted basis. Skyworks CEO Phil Brace will become the CEO of the combined company, and Qorvo CEO Bob Bruggeworth will join the combined company's board of directors; the combined company's board will consist of 11 directors, with 8 from Skyworks and 3 from Qorvo.
“This merger is a significant milestone for the industry and for Skyworks. Combining Skyworks and Qorvo’s complementary product portfolios and world-class engineering teams will enhance our ability to meet the needs of customers in mobile and diverse markets. With greater scale, a more diversified customer base, and operational synergies, we can deliver more innovation for our customers while creating sustainable value for our shareholders,” said Phil Brace.
Bob Bruggeworth stated, “Qorvo and Skyworks share a common culture of innovation, consistently dedicated to solving our customers’ most complex technical challenges. Partnering with Skyworks will enable us to accelerate innovation and deliver broader, more comprehensive solutions across numerous growth areas. We look forward to leveraging the combined strengths of our teams, products, and technology portfolios to solidify our capabilities in the mobile space and significantly expand our reach in defense and aerospace, edge IoT, and other areas.” AI Data Center Influence in the automotive and other industries driven by long-term growth trends.
Both parties outlined their strategic rationale and highlights for the transaction. One point noted by the reporter was: "This merger will combine complementary radio frequency technologies and best-in-class products to expand opportunities in the mobile business, while improving revenue stability and creating $5.1 billion in mobile business."
Due to price competition in the RF technology market and saturation in the smartphone market, Skyworks and Qorvo have had a tough time in recent years. Furthermore, both are highly dependent on a single customer.
Data shows that Apple The company has long accounted for over 60% of Skyworks' revenue and around 40% of Qorvo's. However, Apple 's self-developed radio frequency chip has already been tested in the iPhone 16e, which directly threatens the long-term order security of both companies.
Industry analysts believe that this acquisition will significantly enhance the combined company's scale and bargaining power in the RF front-end field, helping it to cope with the competitive pressure brought by Apple's self-developed chips.
According to the aforementioned industry insider, US radio frequency chip companies compete with each other, comparing specifications and prices. "We target major customers Apple and Google, and the two companies are 'fighting' each other. We want high-quality products, high integration, and low prices; while Apple has two suppliers, which can compare prices and restrain each other, resulting in increasingly lower gross margins and increasingly higher requirements." He believes that this merger will help increase the new company's bargaining power and gross margin.
Chinese manufacturers excel at making breakthroughs in specific areas.
It is understood that the radio frequency front end is a wireless communication device . The core component mainly processes radio frequency signals. Its function determines important performance indicators such as the communication modes that the mobile terminal can support, the strength of the received signal, the stability of the call, and the transmission power, which directly affects the user experience of the terminal.
It should be noted that radio frequency front-end chips belong to analog chips in integrated circuits, and are a sub-field with high barriers to entry and high design difficulty in analog chips.
Due to the iteration of 5G/6G technologies, R&D costs are increasing exponentially. The number of frequency bands required for 5G RF front-end modules is double that of 4G, and 6G will be an order of magnitude higher, resulting in a sharp increase in the iteration costs of filters, PAs (power amplifiers), switches, and LNAs (low-noise amplifiers).
Previously, Qualcomm and Broadcom had formed a duopoly: Broadcom held an 87% market share in the high-end BAW filter market, almost monopolizing key components for the high-end frequency bands of iPhones; while Qualcomm, with its integrated "modem → RF front-end → antenna" solution, eroded the market share of Apple and Samsung flagship phones.
This merger may reshape the competitive landscape of the global radio frequency chip market. The new Skyworks will create a third super radio frequency platform with full-band, full-scenario, and full-customer coverage, in addition to the Qualcomm + Broadcom duopoly.
According to Yole data, the global radio frequency front-end market was worth approximately US$25.5 billion by the end of 2024 and is projected to exceed US$30 billion by 2030. The global market's compound annual growth rate (CAGR) is expected to exceed 3% over the next six years, with overall growth stabilizing. Growth potential is relatively limited, primarily influenced by the growth of the smartphone market.
As the world's largest producer and consumer of smartphones, China is highly dependent on foreign sources for radio frequency (RF) chips, leaving significant room for domestic substitution. In recent years, companies like Zowin Microelectronics have... Major domestic RF manufacturers, represented by [names of manufacturers], are accelerating their breakthroughs.
"Chinese manufacturers are selective in their work, excelling at single-point breakthroughs. For example, they might only make power amplifiers (PAs) for a specific frequency band, doing them very well but unable to integrate them into other frequency bands; or they might only make filters, without integrating PAs, and so on." The aforementioned industry insider stated that domestic manufacturers can sell as long as they perfect one product, while American companies require a high degree of integration. Besides Maxscend , considering factors such as technology and market, Vanchip Technology stands out . Chinese manufacturers such as Huizhi Micro have performed very well in recent years.
However, domestic manufacturers' products are mainly concentrated in the low-to-mid-end market, resulting in fierce competition due to product homogeneity. Coupled with the intensification of price wars in recent years, the industry is currently facing a significant predicament.
While some analysts point out that the merger poses little immediate antitrust risk to US regulators, it may not pass antitrust investigations by regulatory bodies in major markets such as China and Europe. For example, domestic scrutiny will focus on the radio frequency front-end of smartphones as a key 5G component. Domestic mobile phone manufacturers are highly dependent on these two suppliers, and if the merger results in a "monopoly," it could weaken the price negotiation power of Chinese companies.
Meanwhile, domestic manufacturers such as Zowin Microelectronics , Feixiang Technology, and Onsemi Microelectronics are still in the catch-up stage, and this merger may further compress their living space, which conflicts with the industrial policy goal of "self-reliance and controllability".
(Source: China Business Journal)
