Qorvo near-term risk from China export restrictions ‘limited,’ says Stifel

After China’s Ministry of Commerce announced that it would put in place new regulations to restrict exports of certain materials, including gallium and germanium, as well as related compound materials such as gallium nitride, or GaN, and gallium arsenide, or GaAs, Stifel noted that Qorvo (QRVO) is a leading supplier of gallium nitride-based RF technology. However, the firm sees near-term risk as “limited” given it believes that Qorvo uses multiple suppliers for GaN-on-silicon carbide wafers and materials. . In the near-term, Stifel expects supply chain inventory to support Qorvo’s production requirements and, in the longer-term it expects Qorvo’s supply chain to shift sources as necessary. While also noting that Skyworks (SWKS) manufacture its own GaAs wafers, the firm believes that products using non-gallium materials compose the majority of the company’s revenue. Stifel has a Hold rating on Qorvo and a Buy rating on Skyworks shares.