Qorvo (QRVO) Remains Poised for Healthy Long-Term Growth

On Jun 10, Zacks Investment Research updated the research report on premier semiconductor manufacturer Qorvo, Inc. QRVO.

Headquartered in Greensboro, NC, Qorvo was formed by the merger of two semiconductor manufacturing firms, RF Micro Devices, Inc. and TriQuint Semiconductor, Inc. in an all-stock transaction that was billed as ‘a merger of equals'.

The merger brought all the critical RF (radio frequency) components essential for fabricating mobile devices under a common platform. It created an undisputed market leader with a diversified product portfolio of power amplifiers, power management integrated circuits, antenna control solutions, switch-based products and premium filters.

The company also serves the infrastructure and defense/aerospace industries with advanced gallium nitride solutions for additional applications, and foundry services to support radar, next generation base stations, optical communications and the Internet of Things.

Qorvo is expected to leverage the core strengths of both the merged companies to rapidly translate research and development advances into large scale production. In addition, synergistic benefits from the merger are likely to increase profitability through economies of scale and mutual sharing of manufacturing expertise, research and development costs and adjustment of staffing expenses.  

With a broad product portfolio, Qorvo is likely to create new growth opportunities in three large global markets, namely, mobile devices, network infrastructure and aerospace/defense. This is expected to be a boon for the overall industry as a huge talent pool and combined resources will spearhead technological innovation. The combination will also offer higher data throughput for the overall benefit of carriers and consumers and reap synergistic benefits for the company.

Qorvo has introduced highly integrated front-end solutions that simplify and accelerate the implementation of multimode, multi-band 4G smartphones and tablets. These new RF Fusion front-end solutions showcase Qorvo's ability to help leading OEMs to quickly launch their next-generation flagship devices. Qorvo's RF Flex solutions have been selected to support multiple upcoming leading 4G reference designs. RF Flex delivers the best-in-class current consumption to enable superior device performance and leading-edge design flexibility to simplify regional customization.

However, Qorvo operates in a competitive landscape that is becoming more complex with low barriers to entry. As each player strives to have a greater pie in the market, the battle gets murkier. The increased competition is exerting pricing pressure, which remains a matter of concern for the company.

Nevertheless, we remain impressed with the growth prospects of this Zacks Rank #2 (Buy) stock. Some other stocks in the industry worth considering include Himax Technologies, Inc. HIMX, On Track Innovations Ltd. OTIV and Alpha & Omega Semiconductor, Ltd. AOSL, each carrying the same Zacks Rank as Qorvo.

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QORVO INC (QRVO): Free Stock Analysis Report
 
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ON TRACK INNOV OTIV: Free Stock Analysis Report
 
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