Synaptics Incorporated (SYNA) Stock Analysis & Winston Score

Synaptics makes the tiny chips that let devices respond to human touch and voice. Its products include touchpads for laptops, fingerprint sensors for smartphones, and wireless connectivity chips used in smart home gadgets, TVs, and cars. The company sells mainly to electronics manufacturers — companies that build the devices consumers use every day. Synaptics earns money by selling semiconductor chips to device makers, who then build those chips into finished products. It operates globally, with a large portion of its customers based in Asia, particularly China. The company has built some competitive advantage through its specialized chip designs and long-standing relationships with major electronics brands, but it faces intense competition from larger chipmakers with deeper resources. With negative operating margins recently, the key challenge is growing its Internet of Things and automotive chip business fast enough to offset weakness in the slower PC and smartphone markets.