Is Apple Propping Up the Semiconductor Industry?
Shares of Apple’s (NASDAQ:AAPL) chip suppliers surged earlier this week after the tech giant reported that it nearly doubled its earnings in the first quarter, and analysts are connecting the two events, saying the semiconductor industry’s impressive gains are primarily due to Apple’s success.
On Tuesday, Apple reported profits 93 percent higher in the quarter ended in March than in the year-ago period, thanks in large part to iPhone shipments, which totaled 35.1 million units and beat analysts’ estimates by nearly 15 percent. Sales in China accounted for a surprising factor in the sales total.
China was responsible for 20 percent of total sales, up from the 12 percent in 2011. Apple proved that its growth in Asia is just beginning, with the Chinese market as the most promising point of expansion. The iPhone and iPad maker has now turned its attention to international growth as the North American market becomes largely saturated.
RBC Capital analyst Doug Freedman has said the entire semiconductor food chain benefits from Apple’s success. Five Star Equities has examined the outlook for companies in the semiconductor industry and has provided equity research on Skyworks Solutions (NASDAQ:SWKS) and OmniVision Technologies (NASDAQ:OVTI).
OmniVision designs, develops, and markets semiconductor image-sensor devices. The company last reported quarterly results on February 23, earning 13 cents per share and meeting the Thomson Retuers consensus estimate. Analysts predict that OmniVision will post earnings of 28 cents per share for the current quarter. A number of firms have reiterated a “buy” rating on on OmniVision sharen in research notes to investors.
Skyworks Soltuions, a maker of analog and mixed signal chips, recently reported second-quarter results. Revenue for the quarter was $364.7 million, up 12 percent from revenue of $325.4 million in the year-ago period and exceeding the Company’s guidance of $360 million.