Skyworks Solutions CEO Liam Griffin told CNBC that the 5G rollout has been further delayed by the coronavirus outbreak and that he expects demand to be met in the second half of the year.
The global pandemic, which disrupted global supply chains, forced the analog semiconductor maker to cut its guidance for the current quarter earlier this month, but the company expects to fulfill those orders by 2021.
“The issue that we have on what manifest in the demand weakness it’s really come about by a supply shock, Jim,” Griffin said in a “Mad Money” interview. “It’s the supply chains in Asia and other parts of the world where folks couldn’t go to their factories and work, and it creates a delay.”
Skyworks reduced its revenue outlook for the March quarter to between $760 million and $770 million, down from its initial projection between $800 million and $820 million. The company is expecting non-GAAP earning per share of $1.34, down from $1.46.
“This is a multi-year thematic move and the interesting thing right now is that you know people today are clamoring to get the technology,” he said. “We see this as a pause,” he added.
Skyworks shares are down more than 15% from its close on March 4, the day the firm announced its forecast cut. The stock is in bear market territory, along with the broader market, down more than 26% from its highest close in late January.
Shares surged more than 16% to $87.29 in Tuesday’s session, lifting with the rest of the market. Investors paid up for stocks as Congress neared an stimulus package to fend off economic damage of the virus that causes the deadly COVID-19 disease.
The fifth-generation of wireless networking, known as 5G, was designed to give consumers faster internet speeds and connect devices to the internet of things. As many as 75 billion connected devices are expected to be operating across the world by 2025.
The service will be especially useful in a stay-at-home world. With millions more employees and students across the country now experimenting with remote work and online learning during the coronavirus lockdown, the demand for enterprise 5G technologies is only expected to keep growing exponentially.
“We’ve got a long way to go with 5G. We’ve got incredible WiFi technologies coming and I think this coronavirus situation is very difficult,” Griffin said, adding “but I think the technologies that we’re working on in our ecosystem with partners like Verizon and infrastructure players and even the Chinese, we’re all coming together to make this work, but it’s a real indication of how necessary these applications are to the economy.”