Skyworks Solutions and Panasonic Corporation have formed a Joint Venture for high performance filter solutions. Panasonic Corporation is one of the largest electronic product manufacturers in the world, to design, develop and deliver high performance filters including surface acoustic wave (SAW) and temperature compensated (TC) SAW devices. At the core of the joint venture is Panasonic Filter Division's engineering and process talent, expertise in filter design and leading edge products as well as 412 fundamental filter patents and patent applications.
This JV is expected to leverage the core strengths of both companies to better serve the high volume filter market and positions them to substantially grow the business, benefiting their customers. Panasonic has a long heritage in SAW filter products and is the clear performance leader and largest volume producer of rapidly emerging TC SAW filters with shipments already approaching a quarter of a billion units. This joint venture will capitalize on Panasonic's acoustic filtering and piezoelectric leadership while further augmenting Skyworks' product breadth and integration capabilities. Together they will be able to deliver high performance, lowest cost and shortest cycle time solutions.
This JV will also compliment Panasonics strategic investments in high frequency bulk acoustic filters. As a result, we can now develop customized solutions for any band configuration where filter technology is applicable, spanning high, mid and low band frequencies. This will enable Skyworks to provide customized filter products, by targeted band, allowing us to offer differentiated architectures for the most demanding customer applications.
About the Joint Venture with Panasonic
At closing, Skyworks will hold 66 percent of the newly created entity with Panasonic retaining 34 percent. The transaction encompasses the products, working capital, manufacturing equipment and intellectual property of Panasonic's Filter Division. The joint venture will be comprised of approximately 590 employees and headquartered in Osaka, Japan with design centers and operations at facilities in Japan and Singapore.
For consideration, Skyworks will make a cash payment of $148.5 million to Panasonic for its share of the new venture. This investment is expected to be immediately accretive to Skyworks' margins and earnings per share. Skyworks and Panasonic expect the transaction to close before the end of the third calendar quarter of 2014, subject to customary closing conditions.
Filter Market Drivers and Panasonic's Leadership
The insatiable demand for always-on connectivity and ever increasing user data demands have driven a proliferation of bands and the addition of 4G/LTE capabilities. In fact, 3GPP now has more than 45 sanctioned bands. This is significantly increasing the demand for filters and especially for high performance TC SAW filters which enable the dense packing of bands. The need for world class sensitivity and the increasing co-existence issues, due to simultaneous operation of GPS, WiFi, Bluetooth, and cellular radios necessitate the extremely high quality filtering enabled by Panasonic's technology.
Panasonic's filter portfolio offers several demonstrable advantages including:
- Reduced size and weight
- Higher selectivity
- Excellent Q and low insertion loss
- Reliability and stability under harsh environments
- Lower distortion
- Field proven, high volume production
