What changed in this filing

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Item 1. Business

2023-11-17 compared with 2022-11-23 · 41 added, 34 removed, 167 unchanged (31% of the section changed)

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Over the past two decades, Skyworks has made critical investments to power this connectivity transformation, addressing key network technologies from cellular to advanced Wi-Fi ® , enhanced GPS, and Bluetooth ® , among others.

Capitalizing on both organic growth and strategic acquisitions, we are gaining momentum in high-growth verticals, while at the same time, diversifying our revenue and customer set.

In July 2021, we acquired the Infrastructure and Automotive business of Silicon Laboratories Inc.

(the “Acquisition”).

The Acquisition has accelerated our expansion into high-growth market segments, including electric and hybrid vehicles, industrial and motor control, power supply, 5G wireless infrastructure, optical data communication, data center, automotive, smart home, and several other applications.

Capitalizing on both organic growth and strategic acquisitions, we are targeting high-growth verticals, while at the same time, seeking to diversify our revenue and customer set.

Targeted investments in next-generation technology and solutions, exceptional technical talent, and world-class fabrication capabilities have accelerated our expansion into high-growth market segments, including electric and hybrid vehicles, industrial and motor control, power supply, 5G wireless infrastructure, optical data communication, data center, automotive, smart home, and several other applications.

Our key customers include Amazon, Apple Inc.

(“Apple”), Arcadyan, Arris, Bose, Cisco, DJI, Ericsson, Garmin, Gemalto (a Thales company), General Electric, Fibocom, Google, Honeywell, Itron, Lenovo, LG Electronics, Microsoft, Motorola, NETGEAR, Nokia, Northrop Grumman, OPPO, Rockwell Collins, Sagemcom, Samsung, Sierra Wireless, Sonos, Sony, Technicolor, Telit, VIVO, Xiaomi, and ZTE.

(“Apple”), Arcadyan, Arris, Bose, Ciena, Cisco, DJI, Ericsson, Fibocom, Garmin, Gemalto (a Thales company), General Electric, Google, Honeywell, Itron, Lenovo, LG Electronics, Microsoft, Motorola, NETGEAR, Nokia, Northrop Grumman, OPPO, Rockwell Collins, Sagemcom, Samsung, Schneider Electric, Sierra Wireless, Sonos, Sony, Technicolor, Telit, Tesla, TP-Link, VIVO, Xiaomi, and ZTE.

Our competitors include Analog Devices, Broadcom, Cirrus Logic, Murata Manufacturing, NXP Semiconductors, Qorvo, Qualcomm, and Texas Instruments.

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Our Internet address is www.skyworksinc.com.

We make available free of charge on our website our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports as soon as practicable after we electronically submit such material to the SEC.

The information contained on our website is not incorporated by reference in this Annual Report.

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Wireless connectivity is expanding on a global basis, underscoring the critical nature of our mission of connecting everyone and everything, all the time.

A widening range of use cases is driving an insatiable demand for ubiquitous wireless data across a broad array of applications, including remote work, entertainment, fitness, virtual education and meetings, telemedicine, factory automation, connected cars, mobile internet, cloud gaming, and AR/VR technology.

This results in an extraordinary need for faster speeds, increased bandwidth and capacity, significantly lower latency, and more reliable and secure wireless connectivity.

A widening range of use cases is driving an insatiable demand for ubiquitous wireless data across a broad array of applications.

The advancement of 5G adoption, IoT, connectivity for everyone, automotive electrification and safety, as well as augmented reality and virtual reality technology, all demand faster speeds, increased bandwidth and capacity, significantly lower latency, and more reliable and secure wireless connectivity.

The speed and ultra-low latency characteristics inherent in 5G technology are dramatically altering wireless connectivity, creating a market for diverse and transformative applications, and changing how individuals live, work, play, and learn.

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A few statistics illustrate this point.

According to the 2021 Ericsson Mobility Report, global wireless data traffic is expected to grow at a 27% annual rate over the next five years.

According to the 2023 Ericsson Mobility Report, global mobile data is expected to double every three years, driven by new users, innovative services, and the convergence of AI and 5G technology.

Machine-to-machine connections, the fastest-growing IoT category, is expected to soon surpass 15 billion devices.

By 2030, we expect there will be 650 million connected cars worldwide, each consuming 25 times the data that we see in today’s smartphones.

We are helping to enable these opportunities with highly customized solutions supporting a broad set of wireless systems and protocols including cellular, 5G, Wi-Fi, GPS, Bluetooth, Accutime™, HD-Radio™, LoRa®, Thread®, and Zigbee®.

In addition, next-generation Wi-Fi 6 and 6E products are emerging as the standard offering across enterprise, carrier, and retail segments and are expected to accelerate the deployment of IoT devices.

Looking forward, we see significant growth opportunities for our industry and for Skyworks.

The key catalyst is the increasing demand for wireless data as the world embraces 5G and other advanced connectivity technologies.

By 2030, we anticipate 650 million connected cars worldwide, each consuming 25 times the data seen in today’s smartphones.

Skyworks helps facilitate these opportunities with highly customized solutions that support a broad set of wireless systems and protocols including cellular, 5G, Wi-Fi ® , GPS, Bluetooth ® , Accutime™, HD-Radio™, LoRa ® , Thread ® , and Zigbee ® .

Additionally, Wi-Fi ® 7, the next generation of Wi-Fi ® technology, complements 5G by providing high-speed wireless connectivity in local environments.

These faster data rates and improved efficiency cater to the growing number of devices reliant on wireless networks.

We believe AI can be a catalyst for more efficient wireless communications.

From endpoint devices to data centers, generative AI applications will drive the need for higher speed and higher bandwidth Ethernet networks.

We expect this will help increase the demand for our precision timing solutions.

Finally, with the rapid transition towards electrification and advanced safety in vehicles, we are focused on high growth segments and content opportunities, including (i) power isolation chips for on-board chargers, powertrain, and for battery management systems in electric vehicles, (ii) connectivity, with telematics and other solutions being enabled by 4G/5G cellular engines, Wi-Fi ® , Bluetooth ® , Ultra-wide band, Ethernet, and GPS, and (iii) in-vehicle infotainment systems, driven by digital radio coprocessors, and solutions supporting advanced driver-assistance systems and autonomous driving.

Solving Connectivity Challenges

Highly integrated semiconductor solutions are playing an increasingly essential and pivotal role in the deployment of next-generation standards by resolving the daunting analog, mixed-signal, and RF complexities that are challenging the capabilities of existing hardware and the supporting network infrastructure.

Delivering on these design challenges requires broad competencies including signal transmission and conditioning, the ability to ensure seamless hand-offs between multiple standards, power management, voltage regulation, battery charging, advanced filtering, and tuning.

We are at the forefront of this new era of connectivity, delivering the solutions that help enable the true potential of 5G and the IoT.

Highly integrated semiconductor solutions are pivotal in deploying next-generation standards, resolving analog, mixed-signal, and RF complexities that challenge existing hardware and network infrastructure.

Addressing these design challenges requires diverse competencies including signal transmission, seamless hand-offs between multiple standards, power management, voltage regulation, battery charging, advanced filtering, and tuning.

We are at the forefront of this new era of connectivity, delivering the solutions that help enable the true potential of 5G and IoT.

We have a rich heritage in analog systems design and have spent years investing in key technologies and resources.

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Industry-Leading Technology

As the industry migrates to more complex 5G architectures across a multitude of wireless applications, we are well-positioned to help mobile device manufacturers handle growing levels of system complexity across both the transmit and receive chains.

As the industry migrates to more complex 5G architectures across a multitude of wireless applications, we are poised to help our customers handle growing levels of system complexity across both the transmit and receive chains.

The trend towards increasing front-end and analog design challenges in smartphones and other platforms plays directly into our core strengths.

The forthcoming releases of 5G technologies offer significant upgrades for smartphones and IoT devices.

These advancements will deliver more bandwidth, faster speeds, and enable applications like virtual reality, augmented reality, live video streaming, and seamless IoT connectivity.

Crucially, they aim to bring us closer to achieving reliable low latency, ideal for massive machine communications, and introduces non-terrestrial networks that enable satellite connectivity for emergency applications.

The trend towards increasing front-end and analog design challenges in smartphones and other platforms plays directly into our core strengths and positions us to address these challenges.

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Customer Relationships

Given our scale and technology leadership, we are engaged with all of the major original equipment manufacturers (“OEMs”), smartphone providers, and baseband reference design partners in the analog and mixed-signal semiconductor industry.

Given our scale and technology leadership, we are engaged with leading original equipment manufacturers (“OEMs”), smartphone providers, and baseband reference design partners in the analog and mixed-signal semiconductor industry.

Our customers value the scale of our global supply chain, our innovative technology, our ability to curate and deliver unique solutions, and our system engineering expertise, resulting in deep customer loyalty.

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Diversification

We are diversifying our business by expanding our addressable markets and broadening our product portfolio to reach a wider array of global customers.

With the increasing adoption of 5G and the opportunity to enable more applications, we are growing our business beyond mobile devices (where we support all top-tier manufacturers, including the leading smartphone suppliers and key baseband vendors) into additional high-performance analog markets, including automotive, home and factory automation, data center, solar, wireless infrastructure, aerospace and defense, medical, smart energy, and wireless networking.

We are diversifying the reach of our business by expanding our addressable markets and broadening our product portfolio to serve a wider array of global customers.

With the increasing adoption of 5G and the opportunity to enable more applications, we are growing our business beyond mobile devices (where we support leading top-tier manufacturers, including the leading smartphone suppliers and key baseband vendors) into additional high-performance analog markets, including automotive, home and factory automation, data center, solar, wireless infrastructure, aerospace and defense, medical, smart energy, and wireless

In these markets we leverage our scale, intellectual property, and worldwide distribution network, which spans more than 8,000 customers and 8,500 unique products.

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tuners, data receivers, and digital radio coprocessors used in automotive infotainment systems

• Circulators/Isolators:

ferrite-based components commonly found on the output of high-power amplifiers used to protect receivers in wireless transmission systems

• Wireless ASoC:

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utilized to equally split signals into in-phase signals as often found in balanced signal chains and local oscillator distribution networks

electronic devices that change a radio signal from a transmitter into useful information

• Power over Ethernet:

enables both data and power to be sent over standard ethernet cable.

• Power Isolators:

digital, analog isolators, and isolated gate drivers used in industrial control, solar inverters, hybrid/electric automotive systems and charging stations

• ProSLIC ® family of subscriber line interface circuits:

provides complete analog telephone interfaces for premise equipment and enterprise

electronic devices that change a radio signal from a transmitter into useful information (including broadcast receivers)

• System In Package:

complete system in a package, including modem, RF front-end, filtering, matching, timing generation – typically, fully certified by regulatory bodies, industry bodies and multi-service operators

components that perform the change between the transmit and receive function, as well as the band function for cellular handsets

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• Timing Devices:

wireless clocks and oscillators used in optical networking, data center and wireless base stations

• Technical Ceramics:

polycrystalline oxide materials used for a wide variety of electrical, mechanical, thermal, and magnetic applications

clock generators, oscillators, jitter attenuators, and buffers used in optical networking, data center, wireless base stations, industrial, and automotive applications

• Voltage Controlled Oscillators/Synthesizers:

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A small number of OEMs historically has accounted for a significant portion of our net revenue.

In the fiscal years ended September 30, 2022 (“fiscal 2022”), October 1, 2021 (“fiscal 2021”), and October 2, 2020 (“fiscal 2020”), Apple, through sales to multiple distributors and contract manufacturers for multiple applications including smartphones, tablets, desktop and notebook computers, watches, and other devices, constituted more than ten percent of our net revenue.

In the fiscal years ended September 29, 2023 (“fiscal 2023”), September 30, 2022 (“fiscal 2022”), and October 1, 2021 (“fiscal 2021”), Apple, through sales to multiple distributors and contract manufacturers for multiple applications including smartphones, tablets, desktop and notebook computers, watches, and other devices, constituted more than ten percent of our net revenue.

For further information regarding customer concentrations, see Note 14 to Item 8 of this Annual Report on Form 10-K.

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The competitive environment in the semiconductor industry is in a constant state of flux, with new products continually emerging and existing products approaching technological obsolescence.

We compete on the basis of time-to-market, new

product innovation, quality, performance, price, compliance with industry standards, strategic relationships with customers and baseband vendors, personnel, and protection of our intellectual property.

We compete on the basis of time-to-market, new product innovation, quality, performance, price, compliance with industry standards, strategic relationships with customers and baseband vendors, personnel, and protection of our intellectual property.

We participate in highly competitive markets against numerous competitors that may be able to adapt more quickly to new or emerging technologies and changes in customer requirements, or may be able to devote greater resources to the development, promotion, and sale of their products.

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We invested $606.8 million, $617.9 million, and $532.3 million in research and development during fiscal 2023, fiscal 2022, and fiscal 2021, respectively.

The growth in research and development expenses were the result of increases in our internal product designs and product development activity for our target markets in each of these fiscal years.

The level of research and development expenses were the result of increases in our internal product designs and product development activity for our target markets in each of these fiscal years.

Our research and development expenses include new product development and innovations in integrated circuit design, investment in advanced semiconductor manufacturing processes, development of new packaging and test capabilities, and research on next-generation technologies and product opportunities.

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In the absence of a sales agreement, the Company’s standard terms and conditions apply.

We also maintain Skyworks-owned finished goods inventory at certain customer “hub” locations.

We do not recognize revenue until these customers consume the Skyworks-owned inventory from these hub locations.

Due to industry practice, which allows customers to cancel orders with limited advance notice to us prior to shipment, and with little or no penalty, we believe that backlog as of any particular date may not be a reliable indicator of our future revenue levels.

The cancellation or deferral of product orders, the return of previously sold products, or overproduction due to a change in anticipated order volume could result in a reduction in revenue and us holding excess or obsolete inventory, which could result in inventory write-downs and, in turn, could have a material adverse effect on our financial condition.

excess or obsolete inventory, which could result in inventory write-downs and, in turn, could have a material adverse effect on our financial condition.

Government Regulations

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business