SWKS

Skyworks Solutions, Inc.

HALAL

Score: 87/100

stock

Is SWKS Halal?

Designer of radio-frequency and analog semiconductors that connect wireless devices — a permissible technology business with low leverage and a strong cash position.

What You Should Know

Skyworks Solutions, Inc. is a publicly-traded semiconductor company that designs and manufactures radio-frequency (RF) and analog chips — including amplifiers, filters, front-end modules, and connectivity components — used in smartphones, Internet of Things devices, automotive, infrastructure, and industrial systems. Designing and selling RF and analog semiconductors is a general-purpose technology activity that is unambiguously permissible at the activity level under standard Sharia methodology; Skyworks earns product revenue rather than interest. The company operates with low leverage and a strong cash and investments balance, so it comfortably passes the debt-to-market-cap screen; the primary financial-screen consideration is the interest income generated by its cash, a small portion of which should be purified. Subject to verifying ratios at the time of investment, most major Sharia advisory boards classify Skyworks as permissible with purification of small interest-income components.

⚠️ Concerns

•Skyworks holds a substantial cash and investments balance that generates interest income — verify the interest-income-to-revenue ratio against the 5% threshold and purify the corresponding portion of any returns
•Debt-to-market-cap ratio should be confirmed against the 33% Sharia threshold at the time of investment, though Skyworks typically operates with low leverage and a net-cash or near-net-cash position
•Skyworks derives a large share of revenue from a small number of major smartphone customers — this customer-concentration risk is a business and valuation consideration rather than a Sharia screen concern
•Receivables-to-assets ratio should be checked against the preferred board's threshold at the time of investment