Wedbush analysts on Tuesday weighed in on the proposed merger talks between Skyworks Solutions Inc (NASDAQ:SWKS), a major supplier of radio frequency chips for Apple and other smartphone makers, and its competitor Qorvo Inc (NASDAQ:QRVO).
In a note to clients, the analysts wrote that there are clearly synergies from the proposed combination but cautioned the deal could trigger anti-trust concerns, as politics adds an element of uncertainty.
The Wedbush equity research team also noted Apple's view around any business combination is key, as the iPhone maker represents more than 50% of sales for the combined entity.
They added that Murata, Broadcom, and Qualcomm could all benefit from share shift tied to the combination, albeit with radio frequency a smaller portion of business for all of these vendors.
Skyworks has benefited from steady demand for its analogue chips, while Qorvo has faced pressure from activist investor Starboard Value, which recently added two new independent directors to its board to help boost its underperforming share price.
Skyworks shares rose 10% in midday trading on Tuesday, while shares of Qorvo gained 9%.