The addition of RSP's technology, products and engineering expertise to the Synaptics' (SYNA, Financial) system-level know-how is expected to drive the acceptance of integration for the display drivers, gainful touch and enhanced performance for the mobile market, while further expanding its leadership position in DDIC and touch products.
New technology will be a tailwind
The ongoing technology integration allows OEMs with significantly new options external to conventional discrete solutions. The integration of a touch sensor into the display is forecasted to benefit OEMs from much brighter and thinner displays whilst also easing the supply chain and enhancing touch performance on their devices.
The initially produced phones of Synaptics for the quarter are estimated to be primarily of the mid-tier market segment coupled with Synaptics ClearPad Series 4 TDDI solutions. The subsequent Synaptics based TDDI solution is scheduled to be launched in the upcoming months.
The widespread product portfolio of Synaptics enables it to deliver a broad range of solution like on-cell, single-layer on-cell, two-chip in-cell and discreet solutions.
Gaining traction at OEMs
Synaptics discrete solutions are implemented in several latest phones for Microsoft, the 5-inch Lumia 830 and the 4.1-inch Nokia Lumia 730. Its ClearPad solutions are leveraged in the Sony SmartWatch 3 SWR50 and 5.2-inch full HD Sony Xperia Z3.
Latest models implementing these innovative features include Acer Aspire E, V and S series notebooks and Lenovo ThinkPad E455 and E555 models. Synaptics is working closely with Microsoft being its leading partner for the latest precision TouchPad for Windows 10 and is collaborating with Synaptics to expand its two-in-one strategy in general.
Synaptics is witnessing wider adoption of the biometric authentication technology through a series of mobile devices with an exponential expansion of the consumer demand.
Synaptics swipe based Fingerprint ID Solution is included into the latest Samsung Note 4.
Synaptics is believed to be a major implementer of the mobile payment technology. The FIDO Alliance signifies a widespread deployment and industry acceptance of biometrics.
The key technology integrator estimates a solid growth trajectory for the second half of the fiscal year 2014 with its fingerprint ID products seeing significantly strong traction in the key China market and with higher expected demand for Synaptics' TDDI products.
Valuation
The trailing P/E and forward P/E ratios of 66.68 and 10.31 are better than its peers' average P/E of 32.79. The PEG ratio of 0.68 is also impressive and better than peers' average of 1.12. The profit margin of 3.80% is satisfactory.
The quarterly revenue growth is impressive as well. The current ratio of 2.91 suggests the strength of the company’s balance sheet, making Synaptics a smart investment.
