Skyworks Solutions CEO: Powering A Technology Ecosystem | Mad Money | CNBC

Thank you so much.

Yes, certainly. I think what is really important about our business today is this mobile internet ecosystem that we support. It's tremendous. You talked about all week on the show, whether it's Netflix, Facebook with five billion dollars of mobile ads in 90 days, Facebook, Domino's Pizza, you mentioned this whole stay at home theme. So what's happening today is the ecosystem that we support is so vibrant, so profitable, that it is now driving change in the hardware. So in some way, all these bits and bytes need to be managed, they need to be delivered with high levels of efficiency, and that's what we do. So when we look long, we see this theme continue, a multi-year or secular theme, with more and more wireless engines being created every day and the ability for us to deliver our solutions getting better.

Well, the cell phone is still the heart beating and the quarterback of our industry, moving the ball around to an IoT device or an appliance or something. However, you are right that this internet economy just is so pervasive, it's in everything that we do today. So Skyworks, for example, has a great position in access points and routers, maybe a Netgear Linksys box, part of that cloud, that cord cutting phenomenon that we see, being able to stream. We have products in Nest thermostats with Google, right? We have IoT and appliances, appliance companies like Whirlpool even are now adopting wireless technology. But what's unique about it is it's not always cellular, it's not always LTE, it can be Bluetooth, it could be Wi-Fi technology, or even a unique protocol called ZigBee which is used in smart energy and automation. So all of those protocols together come together to give us the best opportunity to serve our market.

Yeah, a difficult situation. Samsung is one of the leaders in the industry and certainly a customer of ours. We don't expect any direct impact financially from Samsung, but at the same time it does speak to the challenge in mobility, all this complexity that we resolve, right? It's not easy, it's daunting, and the push for battery and performance and higher frequencies and higher data rates makes the whole food chain quite complex.

Well, M&A is always an opportunity for us, and I think one of the things that we look at within Skyworks, we're very proud of, is we were generating a ton of cash, we're a debt-free company. You were a follower of our stock when we were eight dollars in 2005, yes, right, and we're close to 80 today. We were 700 million at that time, we're 3.3 billion now, and we've been extremely disciplined with acquisitions. We have made a few, we just recently closed on this Panasonic joint venture in Japan which brings high-performance temperature compensated filtering, allows you to stay in your lane, stay in your frequency as you transmit and receive data. We did a deal with SiGe Microsystems, a private company, to bring Wi-Fi into our portfolio, and then Advanced Analogic Tech in 2012, all relatively small deals but important for us strategically. But you're seeing, I mean right now the rumors Qualcomm could buy NXP, we had the Broadcom Avago, we've had some Cypress made a deal, and you know, it's going to continue, right? It's just good for the industry, this kind of consolidation is good because one of the things our customers want is they want best-in-class solutions and they also want integration. So one of the secret sauces here at Skyworks is to take these components that have been disparate, discrete components, and bring them into an integrated, configured, tuned, and tested module to our customers. And for us, that's worked great. However, M&A, given our powder, given our balance sheet, and the fact that we haven't done a deal in a while, puts us in a better position to do one. It's certainly on the radar screen, but we'll be disciplined. The right opportunity comes along, we'll make it happen.

Yeah, no, that's a great point. So you have two themes. China has been growing up as a market, it really has. We've seen a shift from 2G where we may have a dollar fifty or two dollar content, to 3G where our opportunity goes to 2 to 3, 4G is still early innings. There's been some great improvement over the last several months, last several quarters. We're seeing China Mobile upgrade on 4G, names like Huawei are strategic for us, Xiaomi strategic, new companies like LeEco that you've met, that was on TV actually here earlier this week. So we have a position in China, it's a more mature market. India, Latin America, Middle East, phenomenal potential, and there's still two billion people on the planet with no connectivity, so we want to nail that too.