Skyworks Solutions (SWKS) shares jumped 12.1% to close at $82.42 on Friday, reaching as high as $83.00 in after-hours trading, as the company moved forward with a critical debt-swap phase of its planned $22 billion acquisition of Qorvo (QRVO). The rally brought the stock back near its 52-week high, with shares opening at $73.59 before climbing throughout the session.
The move came two days after Skyworks launched exchange offers allowing holders of Qorvo notes to swap them for Skyworks notes, contingent on the merger closing. The company is offering up to $850 million of new 2029 notes and up to $700 million of new 2031 notes. While not the final step, this debt swap marks a significant mechanical milestone in the transaction, which aims to combine two leading radio-frequency (RF) chip suppliers. RF chips are essential for enabling phones and connected devices to send and receive signals.
Qorvo shares also benefited, rising 8.9% to $106.43, tracking the value of the stock portion of the offer. Under the terms of the October cash-and-stock deal, Qorvo shareholders will receive $32.50 in cash and 0.960 of a Skyworks share for each Qorvo share. The merger is expected to close in early calendar 2027, pending regulatory and shareholder approvals.
The broader semiconductor sector provided a tailwind, with the PHLX Semiconductor Index gaining 1.99% to 12,202.54 as chip stocks broadly rallied. Qualcomm (QCOM), another major smartphone-chip maker, surged about 12% in the upbeat tape. The broader market also contributed, with U.S. stocks rising, the Dow Jones Industrial Average hitting a record closing high, and the Nasdaq Composite adding 0.19% to 26,343.97.
Skyworks' own fundamentals have strengthened after its May 5 earnings report. The company forecast June-quarter revenue above analyst estimates, driven by robust demand for its RF chips used in premium smartphones. Second-quarter revenue of $943.7 million and adjusted profit of $1.15 per share both topped expectations. Chief Executive Phil Brace noted that mobile outperformed expectations and that the Broad Markets segment, which includes Wi-Fi, data center, and automotive, posted double-digit year-over-year growth.
However, the rally leaves limited room for error. The exchange offer is conditioned on the SEC registration becoming effective and the merger closing. Skyworks' filings highlight risks including key-customer reliance, margin pressure, market-share loss, design-win conversion, and the impact of the Qorvo transaction on its business. Friday's trading was a regular session, but U.S. markets were closed on Monday, May 25, for Memorial Day, adding a layer of uncertainty for short-term traders.
