Shares of Qualcomm Inc, the biggest maker of chips that run smartphones, surged in late trading on Wednesday after giving a strong sales forecast for this quarter, bolstered by its expansion into new markets.
Revenue would reach US$10.5 billion to US$11.3 billion in the fiscal third quarter, Qualcomm said on Wednesday. That compares with analysts’ average estimate of US$9.97 billion. Profit would be US$2.75 to US$2.95 a share, well above the US$2.60 average projection.
Qualcomm’s main product is the processor that runs many of the world’s smartphones, and another of its chips connects Apple Inc’s iPhone to high-speed data networks. That makes it particularly vulnerable to swings in demand for such devices.
Photo: Reuters
However, under chief executive officer Cristiano Amon, the company is trying to parlay that skill set into a growing presence in vehicles, networking and computers.
“We can no longer be defined just as a communications company serving just one industry,” he said on a call with analysts.
Qualcomm shares rose as much as 7.3 percent in extended trading following the announcement. They closed at US$135.10 in New York trading on Wednesday.
Analysts have pointed to slowing demand for Android phones in China, the largest market, as a threat to growth, but sales of Qualcomm’s phone-related chips were higher than expected last quarter. They came in at US$6.33 billion, compared with an estimate of US$5.99 billion.
The company predicted its handset division would grow more than 50 percent this fiscal year, bolstered by Samsung Electronics Co’s flagship Galaxy phone and gains at some Chinese smartphone makers.
Executives said that there is some evidence of weakness in demand for cheaper phones, but it would not hurt Qualcomm’s revenue because that is not a big part of its business.
Revenue from the Internet of Things — efforts to add computing power to a wider range of devices and appliances — was US$1.7 billion. That compared with an average projection of US$1.6 billion.
Increasing use of its chips in industrial machinery is driving growth as well, Qualcomm said. The company’s automotive unit, which posted sales of US$339 million, was up 41 percent from a year earlier.
It has a “design-win pipeline” that would amount to more than US$16 billion of sales, Qualcomm said.
Excluding certain items, profit in the fiscal second quarter was US$3.21 a share, compared with analysts’ average estimate of US$2.93.
The company generated US$11.2 billion in revenue, topping the US$10.6 billion projection.
AI AIM: The chipmaker wants joint research and development programs with the Czech Republic, and the government is considering supporting investments in a Czech location Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is planning to build more plants in Europe with a focus on the market for artificial intelligence (AI) chips as the chipmaker expands its global footprint, a senior Taiwanese official said. “They have started construction of the first fab in Dresden; they are already planning the next few fabs in the future for different market sectors as well,” National Science and Technology Council (NSTC) Minister Wu Cheng-wen (吳誠文) told Bloomberg TV in an interview that aired yesterday. Wu did not specify a timeline for TSMC’s further expansion in Europe. TSMC in an e-mailed statement said it
US PROBE: The Information reported that the US Department of Commerce is investigating whether the firm made advanced chips for China’s Huawei Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract maker of advanced chips, yesterday said it is a law-abiding company, and is committed to complying with all applicable laws and regulations including export controls. The Hsinchu-based chip giant issued the statement after US news Web site The Information ran a story saying that the US Department of Commerce has launched a probe into TSMC over whether it breached export rules by making smartphone or artificial intelligence (AI) chips for China’s Huawei Technologies Co (華為). “We maintain a robust and comprehensive export system for monitoring and ensuring compliance,” the statement said. “If we
DEMAND FOR AI CHIPS: Net income in the third quarter surged 31.2% quarter-on-quarter to NT$325.26 billion, the strongest quarterly return in the company’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, yesterday raised its revenue forecast to annual growth of 30 percent this year, thanks to strong and sustainable demand for artificial intelligence (AI) processors for servers. It was the second upward adjustment from 25 percent year-on-year growth estimated three months ago, despite recent concerns about whether the AI boom could be another technology bubble. “The demand is real. It’s real. And I believe it is just the beginning of this demand. Alright, so one of my key customers said the demand right now is ‘insane,’” TSMC chairman and chief executive C.C.
COUNTRY-BASED: Setting ceilings on sales of the technology would tighten limits that originally targeted China’s ambitions in artificial intelligence amid security risks US officials have discussed capping sales of advanced artificial intelligence (AI) chips from Nvidia Corp and other American companies on a country-specific basis, people familiar with the matter said, a move that would limit some nations’ AI capabilities. The new approach would set a ceiling on export licenses for some countries in the interest of national security, according to the people, who described the private discussions on condition of anonymity. Officials in the administration of US President Joe Biden focused on Persian Gulf countries that have a growing appetite for AI data centers and the deep pockets to fund them, the people