SYNAPTICS Inc (SYNA)

Synaptics is a developer and fabless supplier of premium mixed signal semiconductor solutions focused on how people engage with connected devices and data, in the home, at work, in the car and on the go. The company delivers complete chip, firmware and software solutions that let customers integrate advanced functions into their end products. It was incorporated in California in 1986 and re-incorporated in Delaware in 2002, and its fiscal year is a 52- or 53-week period ending on the last Saturday in June.

Products fall into three served markets. The Internet of Things (IoT) market, about 63% of fiscal 2022 net revenue, covers wireless connectivity (Wi-Fi, Bluetooth, GPS/GNSS), system-on-chip products, automotive touch and display drivers, and audio and video products. Examples include the VideoSmart multimedia SoCs, AudioSmart far-field voice and audio products, ConnectSmart and DisplayLink video interface and compression products, ImagingSmart printer, fax and modem solutions, Digital Voice Family VoIP SoCs, DECT cordless telephony SoCs, and an ultra-low power edge AI platform. The PC market, about 20% of revenue, includes TouchPad, ClickPad, ForcePad and SecurePad products, dual pointing solutions and the Natural ID fingerprint family for notebooks and peripherals. The mobile market, about 17% of revenue, includes ClearPad touch controllers, ClearView display drivers and TouchView touch and display driver integration (TDDI) chips for smartphones, tablets and large touchscreens. Underlying technologies include proprietary microcontroller and vector co-processor cores, multimedia, voice and audio processing, pattern recognition, neural network inferencing, mixed-signal, wireless, video compression, capacitive sensing and display systems.

Customers are original equipment manufacturers (OEMs), including many of the world's largest makers of smart home devices, automotive solutions, notebook computers and peripherals, smartphones and tablets, and audio and video products. ClearPad chips are typically sold with customer-specific firmware to sensor, OLED or LCD manufacturers who integrate them into touch-enabled products. The company has grown through acquisitions, including DSP Group (closed December 2021 for $543.3 million), DisplayLink (July 2020, $444.0 million) and Broadcom's Wi-Fi, Bluetooth and GPS/GNSS IoT business (July 2020, $250.0 million). It also sold its mobile LCD TDDI product line in 2020 and certain audio technology assets in December 2020. Its strategy centers on technological leadership, growth in IoT, and strategic relationships and acquisitions.

As a fabless company, Synaptics partners with foundries and backend processors for manufacturing, which keeps capital needs low and costs largely variable, since most manufacturing costs are incurred only once products ship and are invoiced. It concentrates on research, design and engineering, and relies on an extensive portfolio of owned technologies and intellectual property to differentiate its products from those of competitors.