Qualcomm Inc, the largest maker of smartphone processors, reported quarterly earnings that showed signs of success for the chipmaker’s push into new businesses like computers and vehicles, an effort that helped mitigate the impact of a prolonged slump in mobile-handset sales.
In fiscal first quarter, which ended on Dec. 25, Qualcomm said revenue fell 12 percent to US$9.46 billion, missing analysts’ average projection. While handset-
related sales slumped 18 percent to US$5.75 billion, that was higher than some analysts had predicted and topped an average estimate of US$5.25 billion.
Photo: Reuters
Automotive sales jumped 58 percent from a year earlier to US$456 million. Connected devices revenue rose 7 percent to US$1.68 billion.
Under CEO Cristiano Amon, the company has accelerated its effort to sell chips for different industries, trying to lessen its dependence on the smartphone market. Still, Qualcomm’s sales decline and a disappointing outlook for the current period indicate that demand for mobile phones remains hamstrung by sluggish consumer spending on big-ticket items in an unsteady economy.
Qualcomm expects customers, who have accumulated large stockpiles of unused components, to wrap up their inventory reduction efforts around the middle of the year, returning to more predictable order patterns in the second half.
China’s lifting of COVID-19-
related restrictions on its population should begin to help consumer demand in the world’s biggest market for phones, executives said on a conference call with analysts.
“There is optimism that the second half could be better,” Amon said. “Beyond 2023 for Qualcomm we see many of our growth initiatives gaining scale.”
San Diego-based Qualcomm’s main product is the processor that runs many of the world’s best-known handsets. It also sells the modem chips that connect the iPhone to high-speed data networks. A chunk of Qualcomm’s profit also comes from licensing the fundamental technology that underpins all modern mobile networks — fees that phone makers pay whether they use Qualcomm-branded chips or not.
The semiconductor maker has avoided some of the worst of the recent slowdown by winning more business at Samsung Electronics Co, which is using Qualcomm’s Snapdragon processors more in its Galaxy phones. Apple has also continued to buy from Qualcomm longer than projected, as it continues to work on developing its own replacement chips.
The company posted adjusted profit for the first quarter of US$2.37 a share. Analysts on average were looking for US$2.35.
Revenue would be US$8.7 billion to US$9.5 billion in the fiscal second quarter, Qualcomm said in a statement on Thursday, compared with analysts’ estimates of US$9.58 billion. Excluding certain items, profit in the current period will be as low as US$2.05 a share, while the average projection was for per-share profit of US$2.29.
The Investment Commission yesterday approved a Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) application to invest an additional US$3.5 billion in its Arizona subsidiary to manufactured advanced chips. The world’s largest contract chipmaker’s board of directors last month approved the funding project after TSMC started moving manufacturing equipment into the fab in December last year in preparation for the production of 4-nanometer chips next year. TSMC said it has also commenced the second phase of facility construction in Arizona. The second fab is to produce semiconductors using 3-nanometer technology in 2026. Altogether, TSMC plans to spend US$40 billion on the Arizona fabs, doubling its
KEY SECTOR: Taiwan’s new chip legislation is insufficient, and a more strategic ‘chip act’ that covers the whole semiconductor ecosystem is needed, MediaTek’s chairman said MediaTek Inc (聯發科) chairman Rick Tsai (蔡明介) yesterday urged the government to formulate a state semiconductor strategy and comprehensive “chip act” that includes local chip designers and smaller-scale semiconductor companies, as they are facing intensifying competition from China. The government is playing an increasingly important role in safeguarding the local semiconductor industry’s competitiveness, given that the US, the EU and Japan are offering hefty subsidies and significant tax incentives to build semiconductor capacity domestically, as they have realized the strategic importance of semiconductors, Tsai said. To implement such a program, the government should take steps to finance a “chip act,” Tsai said
Microsoft Corp has threatened to cut off access to its Internet search data, which it licenses to rival search engines, if they do not stop using it as the basis for their own artificial intelligence (AI) chat products, people familiar with the dispute have said. The software maker licenses the data in its Bing search index — a map of the Internet that can be quickly scanned in real time — to other companies that offer Web search, such as Apollo Global Management Inc’s Yahoo and DuckDuckGo. Last month, Microsoft integrated a cousin of ChatGPT, OpenAI’s AI-powered chat technology, into Bing. Rivals
MOUNTING PRESSURE: Although bank failures in the US and Europe would not cause systemic risks, it would dampen consumers’ willingness to spend, GlobalWafers said GlobalWafers Co (環球晶圓), the world’s third-largest silicon wafer supplier, yesterday said that the financial turmoil in the US and Europe has dimmed the outlook for chip demand in the second half of this year, as growing economic uncertainty could dampen consumer spending. The Hsinchu-based wafer manufacturer said it is seeing greater pressure from economic uncertainty on the industry’s recovery, as customers would have not expected Silicon Valley Bank, Signature Bank and a tier-one bank like Credit Suisse Group SA to collapse suddenly. Although the failures are unlikely to cause systemic risks, consumers would be cautious of spending on non-essential items, such
RSS