A federal judge in California has denied a motion to dismiss securities fraud claims against Skyworks Solutions (SWKS) and two former executives, allowing investors’ claims over alleged misstatements tied to Apple iPhone supply content losses to move forward.
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The ruling found that plaintiffs plausibly alleged that Skyworks, former CEO Liam Griffin, and former CFO Kris Sennesael made misleading statements or omissions about Skyworks’ declining content position in Apple’s iPhone 16 and iPhone 17 product cycles.
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Allegations Centered on Apple Supply Content Losses
According to the complaint summarized by the Court, plaintiffs allege that Skyworks knew Apple planned to reduce the number of components it would source from the company for future iPhone models, but executives continued to make optimistic public statements about the company’s relationship with Apple and expected content growth.
The Court noted allegations that two former employees involved in manufacturing and supply chain operations claimed executives should have known about the reduced sourcing decisions before making the challenged statements to investors.
The ruling also referenced allegations that competitor commentary and analyst reports supported the plaintiffs’ timeline regarding when Skyworks allegedly became aware of the content losses.
Court Finds Plaintiffs Adequately Alleged Material Omissions
In denying dismissal, the Court concluded that plaintiffs plausibly alleged material omissions through confidential witness accounts, competitor statements, and analyst reports.
Judge Carter found that the confidential witnesses were described with sufficient detail to support their reliability at the pleading stage. One former employee allegedly attended meetings with Apple representatives and claimed the company knew by March 2023 that Apple would no longer single-source certain iPhone 16 components from Skyworks.
The Court rejected the defendants’ argument that the witnesses lacked credibility because they left the company before the iPhone launch, stating that their roles still plausibly gave them knowledge of Apple’s procurement process.
Judge Carter also found that statements from competitors Qualcomm and Broadcom plausibly supported plaintiffs’ allegations regarding Apple’s supplier selection timeline and Skyworks’ alleged knowledge of content losses.
Scienter Allegations Survive PSLRA Challenge
The Court further held that plaintiffs adequately pleaded scienter under the heightened standards of the Private Securities Litigation Reform Act.
The order cited allegations that Apple accounted for 69% of Skyworks’ revenue and that Griffin regularly presented internal information on component wins and losses tied to Apple’s bidding process.
The Court highlighted several public statements cited in the complaint, including comments by Griffin during a January 2024 earnings call, suggesting there was “nothing really concerning” about Skyworks’ position with Apple.
Plaintiffs also alleged that defendants later disclosed approximately 10% content losses for iPhone 16 and projected 20% to 25% declines for iPhone 17 before both Griffin and Sennesael departed the company in 2025.
Judge Carter concluded that, taken collectively, the allegations created a “cogent and compelling inference of scienter” that was at least as strong as competing innocent explanations.
Section 20(a) Claims Also Proceed
The Court also refused to dismiss plaintiffs’ Section 20(a) control-person claims against Griffin and Sennesael. Judge Carter found that the complaint sufficiently alleged the former executives exercised control over Skyworks’ strategic decisions, SEC filings, and investor communications during the relevant period.
What Happens Next
Because the motion to dismiss was denied, the case may proceed beyond the pleading stage, including toward discovery, subject to any further court orders or procedural developments. The ruling does not determine liability or establish that securities fraud occurred. Instead, it means the Court found the allegations sufficiently plausible to move forward beyond the pleading stage.
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