May 2013

Avago (AVGO: BUY, $43 target)

• LTE deployment is expanding TAM for premium ASP FBAR filters.
• Industrial rebound to drive highest margin sales.
• Data center expansion supports Optical strength.

Skyworks (SWKS: BUY, $27 target)

• Market leader seeing rising PA content as Samsung penetration widens and deepens.
• WiFi upgrade doubles content; Analog filling adjacent sockets.
• Expanding product offerings into new verticals.

Microchip (MCHP: Buy, $41 target)

• Cyclical rebound, though sluggish, points to continuing expansion of sales and higher gross margin.
• Secular growth from share gains in 16-bit and 32-bit MCUs.
• 3.8% dividend yield limits downside risk.