Shares in Qualcomm Inc, the biggest maker of chips that run smartphones, slipped in late trading after efforts to expand beyond its main business were hampered by chip shortages in the latest quarter.
While overall sales and profit easily topped analysts’ estimates, the company fell short of projections in certain categories, including chips for cars, the Internet of Things and radio-frequency (RF) components. The pain was partially self-inflicted: The company prioritized sales to phone makers in China during the run-up to the Lunar New Year shopping season — at the expense of other categories.
“We still have more demand than supply,” chief executive officer Cristiano Amon said in an interview. “I wish we had more supply.”
Photo: Reuters
Qualcomm’s fiscal first-quarter results sent the shares down about 2.3 percent in late trading, despite the company giving an upbeat forecast for the current period. Revenue will be US$10.2 billion to US$11 billion, Qualcomm said, compared with an average analyst estimate of US$9.59 billion. Earnings will be at least US$2.80 a share, well ahead of the US$2.48 projection.
Amon has said that the success of his tenure should be measured by Qualcomm’s progress in newer, higher-growth areas. On that front, the results were mixed last quarter. Revenue from the Internet of Things — efforts to add computing power to a wider range of devices and appliances — came in at US$1.48 billion, growing 41 percent. However, analysts had projected US$1.57 billion.
As supply improves and phone demand eases, Qualcomm will be able to satisfy more of the orders it is getting from newer customers, Amon said on a call with analysts.
Excluding certain items, overall profit was US$3.23 a share in the fiscal first quarter, compared with Wall Street’s average estimate of US$3. The company generated US$10.7 billion in revenue, topping the US$10.4 billion projection.
In the so-called RF front-end market — chips that help convert radio signals into data and voice — revenue was US$1.13 billion, short of the US$1.28 billion estimate. Sales of automotive chips were US$256 million, compared with an estimate of US$276.9 million.
For now, Qualcomm’s phone processors and modems — chips that give the devices their computer-like functions and connect them to networks — provide the biggest portion of its revenue.
Like many other chipmakers, Qualcomm outsources production to companies such as Taiwan Semiconductor Manufacturing Co (台積電) and Samsung Electronics Co. A surge in demand has left these foundries unable to keep up. Amon has said that he expects to be able to get more supply in the second half of this year.
The company is unique in the industry because a large chunk of its profit comes from technology licensing. Makers of phones pay to use Qualcomm’s technology, regardless of whether they buy its chips, because the company owns patents that cover some of the fundamentals of mobile communications.
While Apple Inc does not use Qualcomm’s Snapdragon processors, the iPhone maker buys modems that connect its handset to networks. Qualcomm’s leadership has acknowledged reports that Apple is working on its own modem, but the company has said that it does not need to be a part of the iPhone to grow.
Qualcomm said on Wednesday that Android devices — rather than Apple — fueled its sales gain in the smartphone market.
European Central Bank (ECB) President Christine Lagarde is expected to step down from her role before her eight-year term ends in October next year, the Financial Times reported. Lagarde wants to leave before the French presidential election in April next year, which would allow French President Emmanuel Macron and German Chancellor Friedrich Merz to find her replacement together, the report said, citing an unidentified person familiar with her thoughts on the matter. It is not clear yet when she might exit, the report said. “President Lagarde is totally focused on her mission and has not taken any decision regarding the end of
French President Emmanuel Macron told a global artificial intelligence (AI) summit in India yesterday he was determined to ensure safe oversight of the fast-evolving technology. The EU has led the way for global regulation with its Artificial Intelligence Act, which was adopted in 2024 and is coming into force in phases. “We are determined to continue to shape the rules of the game... with our allies such as India,” Macron said in New Delhi. “Europe is not blindly focused on regulation — Europe is a space for innovation and investment, but it is a safe space.” The AI Impact Summit is the fourth
STRATEGIC ALLIANCE: The initiative is aimed at protecting semiconductor supply chain resilience to reduce dependence on China-dominated manufacturing hubs India yesterday joined a US-led initiative to strengthen technology cooperation among strategic allies in a move that underscores the nations’ warming ties after a brief strain over New Delhi’s unabated purchase of discounted Russian oil. The decision aligns India closely with Washington’s efforts to build secure supply chains for semiconductors, advanced manufacturing and critical technologies at a time when geopolitical competition with China is intensifying. It also signals a reset in relations following friction over energy trade and tariffs. Nations that have joined the Pax Silica framework include Japan, South Korea, the UK and Israel. “Pax Silica will be a group of nations
CONFUSION: Taiwan, Japan and other big exporters are cautiously monitoring the situation, while analysts said more Trump responses ate likely after his loss in court US trading partners in Asia started weighing fresh uncertainties yesterday after President Donald Trump vowed to impose a new tariff on imports, hours after the Supreme Court struck down many of the sweeping levies he used to launch a global trade war. The court’s ruling invalidated a number of tariffs that the Trump administration had imposed on Asian export powerhouses from China and South Korea to Japan and Taiwan, the world’s largest chip maker and a key player in tech supply chains. Within hours, Trump said he would impose a new 10 percent duty on US imports from all countries starting on
RSS