Activist investor Starboard Price will take a 7.7% stake in chipmaker Qorvo

(Reuters) – Starboard said it built a 7.7% stake in Qorvo, the chipmaker’s filing on Friday, saying the activist investor wants to boost the company’s weak stock price.

Shares of the company rose more than 8 percent in premarket trading.

As the Apple supplier faces intense competition and shrinking orders for smartphone chips as consumers gravitate toward entry-level smartphones, bigger rivals such as Broadcom and Qualcomm will benefit from a recovery in China’s smartphone market.

In October, Qorvo said its exit from mid-range 5G Android smartphones would impact revenue in the second half of fiscal 2025. According to data compiled by LSEG, the company is expected to show a 16% decline in third-quarter revenue.

Starboard’s stake in Qorvo is worth more than $500 million, based on the stock’s last closing price last Thursday.

The hedge fund led by Jeffrey Smith is one of the world’s most prominent activist investors and has pushed for changes at companies including Pfizer and Salesforce.

Shares of Qorvo have fallen more than 37% in the past year, underperforming peers, partly due to a soft economy and the slow adoption of artificial intelligence, which has been a big driver of growth for many chipmakers.

Adding to the company’s woes, it was removed from the S&P 500 benchmark in December last year.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Krishna Chandra Elluri)