Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump.
Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share.
The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San Diego-based company also reported better-than-predicted results in the January-to-March quarter — buoyed by headway in China, where it sells technology to local phone manufacturers.
Photo: Reuters
In the March quarter, profit was US$2.44 a share, excluding some items. Revenue rose 1 percent to US$9.39 billion. Analysts had estimated profit of US$2.32 and sales of US$9.32 billion.
Revenue from the smartphone segment gained 1 percent last quarter, a slowdown from the 16 percent increase in the previous three months.
But China was a bright spot, as sales to phone makers in that country, the biggest market for the devices, surged 40 percent in the first half of the fiscal year, “reflecting our strong competitive positioning and recovery of demand,” the company said.
In that market, Qualcomm chief executive officer Cristiano Amon said customers, including Xiaomi Corp (小米), Honor Terminal Co (榮耀), OnePlus Technology Co (萬普拉斯科技), Oppo and Vivo Communication Technology Co (維沃), are fueling demand. They’re not losing smartphone market share to a resurgent Huawei Technologies Co (華為) in China, he added.
Amon said that Huawei’s reentry into the market has helped stoke interest in the Android operating system, which is often paired with Qualcomm chips.
“We have not seen signs of weakness in the Android premium market in China,” he said.
Huawei has been blacklisted by the US government, and Amon pointed out that Qualcomm only sells less-advanced 4G phone parts to the company — in line with US trade restrictions. His company expects that business to wind down to nothing next year.
Apple Inc and Samsung Electronics Co are major phone customers of Qualcomm. But Apple’s iPhone relies on Qualcomm for connectivity chips, rather than the main processor.
Qualcomm’s Internet of Things group, which creates electronics for Web-connected appliances, has suffered from a glut of inventory. Revenue at that unit was down 11 percent last quarter. Qualcomm’s automotive sales rose 35 percent.
An additional portion of Qualcomm’s profit comes from licensing the fundamental technology that underpins all modern mobile networks. Phone manufacturers pay these fees whether they use Qualcomm-branded chips or not.
GEOPOLITICAL ISSUES? The economics ministry said that political factors should not affect supply chains linking global satellite firms and Taiwanese manufacturers Elon Musk’s Space Exploration Technologies Corp (SpaceX) asked Taiwanese suppliers to transfer manufacturing out of Taiwan, leading to some relocating portions of their supply chain, according to sources employed by and close to the equipment makers and corporate documents. A source at a company that is one of the numerous subcontractors that provide components for SpaceX’s Starlink satellite Internet products said that SpaceX asked their manufacturers to produce outside of Taiwan because of geopolitical risks, pushing at least one to move production to Vietnam. A second source who collaborates with Taiwanese satellite component makers in the nation said that suppliers were directly
Top Taiwanese officials yesterday moved to ease concern about the potential fallout of Donald Trump’s return to the White House, making a case that the technology restrictions promised by the former US president against China would outweigh the risks to the island. The prospect of Trump’s victory in this week’s election is a worry for Taipei given the Republican nominee in the past cast doubt over the US commitment to defend it from Beijing. But other policies championed by Trump toward China hold some appeal for Taiwan. National Development Council Minister Paul Liu (劉鏡清) described the proposed technology curbs as potentially having
EXPORT CONTROLS: US lawmakers have grown more concerned that the US Department of Commerce might not be aggressively enforcing its chip restrictions The US on Friday said it imposed a US$500,000 penalty on New York-based GlobalFoundries Inc, the world’s third-largest contract chipmaker, for shipping chips without authorization to an affiliate of blacklisted Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯). The US Department of Commerce in a statement said GlobalFoundries sent 74 shipments worth US$17.1 million to SJ Semiconductor Corp (盛合晶微半導體), an affiliate of SMIC, without seeking a license. Both SMIC and SJ Semiconductor were added to the department’s trade restriction Entity List in 2020 over SMIC’s alleged ties to the Chinese military-industrial complex. SMIC has denied wrongdoing. Exports to firms on the list
TALENT FACTOR: The nation’s chip sector would be difficult to replace, but to maintain that advantage, Taiwan must retain skilled workers, an academic said A group of experts on Sunday called on Taiwan to strive to maintain its world-leading position in the semiconductor industry, with a US-China chip dispute expected to continue regardless of who becomes the next US president. Tamkang University Graduate Institute of International Affairs and Strategic Studies director Li Da-jung (李大中) said at a Taipei seminar on global semiconductor security that the relationship between the two superpowers would remain confrontational. There appears to be “no turning back” in US-China relations, as US presidential candidates US Vice President Kamala Harris and former US president Donald Trump are both expected to continue Washington’s hawkish stance
RSS