Knowles Corp. to Sell Consumer MEMS Microphone Business to Syntiant in Strategic Move towards Edge AI Focus

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Knowles Corporation ($NYSE:KN) is a leading provider of advanced acoustic solutions for mobile, consumer, and enterprise markets. The company is known for its expertise in microelectromechanical systems (MEMS) technology, which is used to create highly sensitive and accurate microphones for a variety of applications.

However, in a recent strategic move, Knowles Corp. has announced its decision to sell its consumer MEMS microphone business to Syntiant Corporation. Syntiant Corp. is a California-based AI chip company that specializes in creating low-power, high-performance chips for edge artificial intelligence (AI) applications. This move marks a significant shift for Knowles Corp., as it reflects their focus on targeting the growing demand for edge AI solutions. By divesting their consumer MEMS microphone business, the company can now concentrate on developing and delivering advanced acoustic solutions for the mobile, enterprise, and IoT markets. This strategic decision aligns with Knowles’ long-term goals and vision of becoming a leader in the edge AI space. As they shift their focus towards higher-margin and high-growth markets like edge AI, the company anticipates a positive impact on their financial performance. In addition to the sale, Knowles Corp. will also enter into a supply agreement with Syntiant for their future acoustic needs. This collaboration will ensure a seamless transition for customers and maintain the high-quality standards that Knowles is known for. It allows Knowles to focus on their core strength of providing advanced acoustic solutions while providing Syntiant with the technology and expertise they need to expand their presence in the edge AI market. Investors will be keeping a close eye on how this decision impacts Knowles’ financial performance and their journey towards becoming a leader in the edge AI space.

Share Price

This decision reflects the company’s efforts to realign its business towards emerging technologies and capitalize on the growing demand for edge AI solutions. The stock market’s initial reaction to this news was a decline in Knowles Corp.’s stock price. The stock opened at $17.67 and closed at $17.52, down by 2.18% from the prior closing price of 17.91.

However, this dip in stock price is likely temporary and does not reflect the long-term benefits of this strategic move. This includes developing advanced audio and voice solutions for applications such as smart home devices, wearables, and automotive systems. These products utilize edge AI technology to process data locally, resulting in faster response times and enhanced privacy for users. The company aims to expand its presence in high-growth markets and increase its revenue from non-mobile markets, including IoT and industrial applications. On the other hand, Syntiant, a leading AI chip company, will benefit from this acquisition by adding Knowles Corp.’s consumer MEMS microphone business to its portfolio. This deal will enable Syntiant to offer a more comprehensive edge AI solution to its customers, combining audio and voice capabilities with its AI chips. This strategic move will allow the company to focus on its core competencies and capitalize on the growing demand for edge AI technology. While the stock market initially responded with a decline in stock price, this decision is expected to have long-term positive effects on Knowles Corp.’s growth and profitability. Live Quote…

About the Company

Income Snapshot

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Cash Flow Snapshot

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Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Knowles Corporation. More…

Key Ratios Snapshot

Some of the financial key ratios for Knowles Corporation are shown below. More…

Analysis

After conducting a thorough analysis of KNOWLES CORPORATION‘s wellbeing, GoodWhale has determined that it is a solid company with strong financial health. Our Star Chart evaluation shows that KNOWLES CORPORATION has a high health score of 8/10, indicating that it has a strong ability to manage its cashflows and debt. This is an important factor for investors to consider, as it shows that the company is capable of paying off its debt and funding future operations. In terms of specific financial metrics, KNOWLES CORPORATION is strong in assets, profitability, and weak in dividend and growth. This means that the company has a strong balance sheet with valuable assets, and is able to generate profits. However, it may not be the best option for investors looking for potential growth opportunities or those seeking regular dividend payments. Based on our analysis, we classify KNOWLES CORPORATION as an ‘elephant’ type of company. This means that it is considered to be rich in assets after subtracting liabilities. This is an attractive characteristic for investors, as it indicates stability and security in the company’s financial position. Overall, KNOWLES CORPORATION may be of interest to a variety of investors. Those looking for a stable and secure investment option may be drawn to its strong financial health and asset-rich status. Additionally, value investors may also find this company appealing due to its solid profitability and potential for long-term growth. However, investors seeking regular dividend payments or high-growth opportunities may want to look elsewhere. More…

Peers

In the mobile phone industry, there is intense competition between Knowles Corp and its competitors AdvanceTC Ltd, Shenzhen CDL Precision Technology Co Ltd, and Sonim Technologies Inc. All four companies are vying for market share in the smartphone market.

– AdvanceTC Ltd ($OTCPK:ATCLF)

AdvanceTC Ltd is a company that provides telecommunications and IT services. It has a market cap of 12.16M as of 2022 and a return on equity of 271.78%. The company offers a range of services including voice, data, and video communications. It also provides IT services such as cloud computing, data storage, and security.

– Shenzhen CDL Precision Technology Co Ltd ($SZSE:300686)

Shenzhen CDL Precision Technology Co Ltd is a precision technology company that specializes in the design and manufacture of high precision components and assemblies for the automotive, aerospace, and other industries. The company has a market cap of 3.26B as of 2022 and a return on equity of 0.17%.

– Sonim Technologies Inc ($NASDAQ:SONM)

Sonim Technologies Inc is a provider of ultra-rugged mobile phones and services designed for use in hazardous environments. The company has a market cap of 16.64M as of 2022 and a return on equity of -234.74%. Sonim’s products are used by a variety of industries, including construction, utilities, oil and gas, public safety, and manufacturing.

Summary

Knowles Corp. has announced the sale of its consumer MEMS microphone business to Syntiant Corp, a leading edge AI company. It also benefits Syntiant, as it will now have access to Knowles’ extensive customer base and technology expertise. This deal is seen as a positive step for both companies, as Syntiant will be able to expand its product portfolio and Knowles can utilize the funds from the sale to invest in future growth opportunities. Investors should closely monitor the impact of this transaction on Knowles’ financials and market position.