MACOM Technology Solutions Holdings, Inc. (MTSI)

MACOM makes high-frequency chips for communications, data centres and radar.

Radio-frequency and optical components are a narrow field where what matters is not clock speed but handling a signal at high frequencies with low loss. Such parts are designed for a specific customer system and live in it for years, because replacing one means redesigning the board.

Demand comes from three places with different cycles: optical links inside data centres, telecommunications equipment and defence radar, where programmes are long and independent of the commercial market. Some manufacturing is in-house, some is contracted to foundries. Risks: the carrier ordering cycle and customer concentration. The company pays no dividend.