GREENSBORO – In these days of chip wars, North Carolina-based Qorvo is pushing ahead to deliver products for customers. With Wall Street analsysts watching, Bob Bruggeworth took the stage to make his case for investors to keep backing his company.
A month after the acquisition of United Silicon Carbide, or UnitedSic, Qorvo’s Bruggeworth spoke at the Barclays Global Technology, Media, and Telecommunications Conference 2021, Bruggenworth noted that the publicly-traded company (Nasdaq: QRVO) has worked to balance its business, but there are still big challenges.
“One of the things that’s been our really biggest challenge is still silicon,” said Bruggeworth. “We use a lot of silicon, whether it’s in our tuners, in our WiFi modules, our RF highly integrated modules, what have you. And that still remains a challenge.”
Despite the challenge, Bruggeworth said that the company’s outlook has not changed since its November earnings call, and that the company expects “supply and demand imbalances moderating through the March quarter.”
“We do see capacity coming online and our agreements are getting us more volume in the next year and the following year,” said Bruggeworth. “What we still hear at least from our customers is still tightness in power management, tightness in Wi-Fi, SoCs and some other components. So, we’re probably a little more concerned about our customers’ ability to get also modems for, we’ll call more of the mass tier 5G phones.”
Bruggeworth noted that the “tightness” in the market resulted in the supply of silicon routing to higher value phones, adding that this was an understandable “play” in market dynamics. “We see that now in pretty good shape, and that’s where we see the next wave of growth coming primarily in the Android ecosystem,” said Bruggeworth.
“We do believe we’re in the very early innings of 5G. And as we start to see the second and third generation devices being rolled out in 5G, they continue to add more bands,” said Bruggeworth. “We continue to see the addition of more complex Wi-Fi. We’ve talked a lot about WiFi 6, WiFi 6E. We’ve also started to expand in the WiFi 7. So, we expect those trends to continue.”
The complexity of expanding 5G and WiFi could be similar to what occurred with LTE, noted Bruggeworth, starting about five years ago, eventually leading to LTE, LTE Advanced, LTE Pro. “We see 5G doing the same,” said Bruggeworth.
“We’ve had tremendous growth in 2020, tremendous growth in 2021,” said Bruggeworth. “We have seen some supply constraints within our own supply as well as what our customers weren’t able to get access,” he added.
But the industry is slowly adding back capacity, noted Bruggeworth, one of the indicators that leads the company to expecting improvement in 2022. Another is the planned launch of what Bruggeworth called “marquee phones,” and how those phones will perform. “We’re excited about is how we’re positioned with many of those customers that are launching phones in the beginning of 2022, Samsung being one of them,” said Bruggeworth.
And Qorvo expects to continue to expand into other applications for its cellular RF content, such as “mass food machine-to-machine IoT applications as well as ultra-low latency applications like automotive and AR and VR,” said Bruggeworth. There’s also a set of defense applications, noted Bruggeworth, as well as a growing demand for more efficient power supply.
Bruggeworth noted that the company has made about $1.6 billion in acquisitions in recent years, and has bought back a similar amount of the company’s stock through stock buybacks.
A transcript of the event was published on Seeking Alpha.