It seems like it was just yesterday that Apple Inc. (NASDAQ: AAPL) released the much anticipated iPhone X, and people were rushing into stores to spend $1,000 on a smartphone. That’s old news now as the iPhone 11, 11 Pro and Pro Max are all in stores, and the early take on sales and the phone appear to be very positive.

With awesome reviews on the impressive camera and longer battery life, early sales have been very strong. One of the most significant internal additions to the new iPhone 11 and 11 Pro is the new U1 chip. All the new iPhones have it inside. The chip powers ultra-wideband technology, which can pinpoint the location of items like a phone or a tracking tag. It could even be used to unlock your car.

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Two top semiconductor companies are potentially doing tremendous business with Apple, and a new Stifel research report makes the case that both of the companies, which they have Buy ratings on, remain solid winners in the battle to do business with the technology giant.

Cirrus Logic

This company gets a staggering percentage of its total revenue from Apple, which very well could snap them up at some point. Cirrus Logic Inc. (NASDAQ: CRUS) is a leading supplier of high-performance, low-power integrated circuits for audio and voice signal processing applications. Cirrus products span the audio signal chain, from capture to playback, and are built into mobile devices such as smartphones, tablets, digital headsets, speakers and wearables.

Cirrus also supplies non-portable audio chips, which target the consumer, smart home, automotive, energy and industrial markets.

The Stifel analysts feel that the company has three products in the new iPhone 11, and note that Apple accounted for 72% of the company’s June quarter revenue.

Stifel’s price target for the shares is $62, and the Wall Street consensus target is $53.50. The stock closed Monday at $54.71 a share.

Power Integrations

This one may be off the radar some for investors, but it has solid upside potential. Power Integrations Inc. (NASDAQ: POWI) engages in the design, development and marketing of analog and mixed-signal integrated circuits and other electronic components and circuitry used in high-voltage power conversion.

The company’s products are used in power converters that convert electricity from a high-voltage source to the type of power required for a specified downstream use.

The Stifel analysts note that while Power Integrations may be more speculative, there are three big reasons why it makes may sense for investors.

1. Speculation often appears shortly after Apple-driven news events about the company’s potential to penetrate the latest-gen iPhone with its fast-charging solutions.
2. Apple’s product launch confirmed the inclusion of an 18W fast-charger in-box with its iPhone 11 Pro/Pro Max flagships. For the standard iPhone 11, the 18W fast-charger is available as an option.
3. Power Integrations currently provides a power supply controller IC for the Apple 2018 iPad Pro’s 18W USB-C fast-charging power adapter.

In conclusion, they went on to say this:

Thus, while we cannot definitively confirm things one way or another until tear-downs of the bundled 18W charger become available (or we receive confirmation that the bundled charger is in fact the same one included with the 2018 iPad Pro), we believe Power Integrations is not only very well-positioned to make greater inroads into Apple, it is arguably the best-positioned silicon vendor to benefit from the current USB-C/PD upgrade cycle.

Stifel has a $97 price target. The consensus price target is much lower at $82.80, and the shares closed Monday at $92.71.

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Needless to say, the Apple iPhone 12 is probably already on the drawing board. So it makes sense to look at companies that have a strong relationship with a technology company that has such strong brand loyalty.

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