Qualcomm Inc on Wednesday forecast quarterly sales and adjusted profits above Wall Street estimates, with executives saying they see supply constraints easing as smartphone buyers upgrade to 5G and former Huawei Technologies Co (華為) customers migrate to Qualcomm-chip phones.
Qualcomm is the world’s biggest supplier of smartphone chips, providing key components for 5G connectivity. The San Diego, California-based company has resolved protracted legal fights with regulators and regained iPhone maker Apple Inc as a customer.
“Qualcomm is clearly benefiting from its 5G design win with Apple’s iPhone12 and other Asian smartphones’ OEMs [original equipment manufacturers],” Summit Insights Group analyst Kinngai Chan (陳金蓋), said.
Photo: Bloomberg
Honor, Huawei’s spin-off brand, has also contributed to this, he added.
Qualcomm forecast adjusted profits with a midpoint of US$1.65 per share on revenue with a midpoint of US$7.5 billion for its fiscal third quarter ending in June, compared with analysts’ expectations of US$1.52 per share on US$7.11 billion, according to Refinitiv data.
For the fiscal second quarter that ended on March 28, Qualcomm had adjusted earnings of US$1.90 per share on sales of US$7.93 billion, compared with analysts’ estimates of US$1.67 per share on US$7.62 billion, Refinitiv data showed. Wall Street estimates had been only slightly above the midpoints of Qualcomm’s own guidance of US$1.65 per share on US$7.6 billion.
Qualcomm designs chips, but relies on partners to produce them, such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Samsung Electronics Co and China’s Semiconductor Manufacturing International Corp (中芯).
Qualcomm executives said the company is investing with its manufacturing partners to secure capacity, “one of the key drivers of growth of expenses between the second and third fiscal quarter,” Qualcomm chief financial officer Akash Palkhiwala said.
“Supply remains tight within the chip industry, but key chipmakers like Qualcomm [and Apple] have been able to navigate well as they are preferred customers” of chip contract manufacturers, CFRA Research senior equity analyst Angelo Zino said.
Qualcomm has been aiming to gain smartphone chip market share after US sanctions on Huawei last year all but cut off the Chinese company’s chip supplies, rendering it unable to keep making smartphones.
Qualcomm executives have said they expect much of Huawei’s previous market share to migrate to other Android phone makers that use Qualcomm’s chips.
On a call with analysts, Qualcomm said that sales of its mobile phone chips could grow by US$10 billion as Huawei exits the market.
Those gains hinge on Qualcomm’s ability to secure enough chips during a global supply crunch. Cristiano Amon, who is to take over as chief executive in the coming months, said that Qualcomm can source its most profitable chips, the flagship Snapdragon 800 series of smartphone processors, from Samsung and TSMC.
“We expect supply chain to improve significantly as we get to the end of the calendar year,” Amon said in an interview.
Qualcomm has aimed to grow its chip business and improve margins as its once-lucrative patent licensing business shrinks after some changes to its licensing practices.
HSBC Holdings PLC is deepening its commitment to Taiwan as the economy emerges as one of the bank’s fastest-growing markets globally, driven by an artificial intelligence (AI) investment boom, expanding cross-border trade, and rising wealth creation. “The advantage that Taiwan has is a growth story linked to the semiconductor and broader AI industries, strong underlying corporate performance, and wealth creation,” said Surendra Rosha, HSBC’s co-chief executive for Asia and the Middle East, in an exclusive interview with the Taipei Times on June 2, during this year’s HSBC Taiwan Conference. That combination has helped HSBC cement its position as the most profitable international
Taiwanese firms have increased investment in the Philippines in recent years as Manila’s ties with Washington deepen and global supply chains continue to shift away from China, an expert at the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The Philippines had not been among Taiwanese investors’ top choices in Southeast Asia, CIER Taiwan ASEAN Studies Center director Kristy Hsu (徐遵慈) said at a seminar in Taipei. However, Taiwan’s investment in the country has grown significantly since the COVID-19 pandemic, reaching US $257 million last year, a high in recent years, she said. Although Taiwan’s total investment in the Philippines still lags
Intel Corp regards Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) as a longstanding partner, as the US chipmaker would continue outsourcing production of advanced chips to TSMC, Intel chief executive officer Lip-Bu Tan (陳立武) said yesterday. “I don’t look at people as competitors. I look at the collaboration... Nvidia is also, you know, a good friend,” Tan told a news conference following his keynote speech at the Computex trade show in Taipei. “It’s a very trusted partnership for us... We are a big, top customer for them, and we’re going to continue doing that,” he said, referring to TSMC, the world’s largest foundry
Hon Hai Precision Industry Co (鴻海精密) yesterday said it would work with US chipmaker Intel Corp to jointly develop and deploy next-generation artificial intelligence (AI) infrastructure and intelligent computing platforms in a move to capture booming demand for AI computing systems. Hon Hai, also known as Foxconn Technology Group (富士康), said in a statement that the partnership would combine its global manufacturing scale, system integration expertise and AI data center deployment capabilities with Intel’s strengths in processor architecture, silicon technologies and software ecosystem. The companies said they plan to work on equipment used in AI data centers, including server racks powered by
RSS