Knowles Corporation (KN) is a leading provider of specialty audio components and precision electronic devices used in complex applications across the industrial, healthcare and defense sectors. The company was founded in 1946 when Hugh Knowles developed miniature microphones and speakers for hearing aids. Since then, Knowles has evolved into an industrial technology company, with a unique ability to serve niche markets. Built on decades of technical expertise and deep customer relationships, the company is well-positioned to benefit from its strong reputation, distinct competitive advantages and multiple avenues for growth.

This is Worth Hearing

Knowles is the cornerstone of the hearing aid industry. Over the past 80 years, the company has established trusted relationships with virtually every major global hearing aid manufacturer. These partnerships have been fostered through decades of innovation, with Knowles consistently helping customers bring advanced hearing solutions to market. We believe these longstanding relationships represent a durable competitive advantage, especially as hearing loss becomes more prevalent across an aging population.

Let’s be Precise

While the hearing aid business provides a stable foundation, the precision devices segment is driving the company’s next phase of growth. Rather than competing in crowded markets for standard electronic components used in smartphones, laptops and other basic consumer products, Knowles focuses on highly specialized devices used in applications where reliability is critical. These components are designed to power life-saving medical devices, military defense systems and electric vehicle infrastructure. Knowles faces limited competition in these markets because they are too niche to attract large manufacturers and too technically demanding for most competitors. We believe this combination of specialized expertise and high barriers to entry positions the company for long-term growth.

Changing the Tune

In recent years, Knowles has taken decisive steps to accelerate its transformation into an industrial technology company. In 2024, management sold one of its lower margin divisions that manufactured audio components used in smartphones, speakers and other household appliances. They used the proceeds to acquire Cornell Dubilier, a leader in high quality capacitors, specifically designed to regulate voltage, smooth power delivery and protect circuits in demanding environments. The acquisition increased the company’s exposure to higher-growth end markets, diversified its portfolio and strengthened its fundamentals.

Sound Fundamentals

The company’s transformation has reshaped its long-term outlook. By focusing on niche markets, Knowles has built a resilient business with durable competitive advantages and meaningful exposure to attractive secular growth trends. As management continues to execute its strategy, we expect Knowles to deliver shareholder value for years to come

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