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HomeNewsTelecomRiding on soaring demand for chips, Qualcomm beats estimates

Riding on soaring demand for chips, Qualcomm beats estimates

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Qualcomm forecast higher-than-expected profits and revenue for the current quarter on Wednesday due to rising demand for chips used in phones, cars, and other internet-connected devices.

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forecast higher-than-expected profits and revenue for the current quarter on Wednesday due to rising demand for chips used in phones, cars, and other internet-connected devices.

The San Diego-based company, which remains the world's largest supplier of mobile phone chips, has worked to diversify its chip portfolio. Its upbeat forecast came as manufacturers such as Apple Inc. struggled with supply chain issues and reported inconsistent results.

The experts attributed the reason for growth to global bottlenecks that have benefited Qualcomm because they have compelled profit-driven phone makers to concentrate their limited supply on their most lucrative premium handsets, Qualcomm's strongest market segment.

Qualcomm has also benefited from Huawei's exit from the smartphone market. The Chinese company's Android phones previously used proprietary chips, but many of the handsets that have since been discontinued use Qualcomm chips.

Qualcomm's shares rose 3.6 percent in after-hours trading following the company's forecast. Qualcomm said it expects adjusted earnings per share to grow between $2.90 and $3.10 in the first quarter, beating Refinitiv's IBES consensus estimate of $2.59.

Qualcomm CEO Cristiano Amon told news agency Reuters that earlier this year's efforts to secure additional chip supplies were successful and on track.

Qualcomm's chief financial officer Akash Palkhiwala stated during an investor conference call that the company expects adjusted profit growth of more than 20% in fiscal 2022, compared to Wall Street estimates of 12.5 percent growth, according to Refinitiv IBES estimates.

Additionally, the company stated that it anticipates fiscal first-quarter revenue of $10.40 billion, which includes the holiday shopping season in the United States and Europe, compared to analyst estimates of $9.68 billion.

The optimistic forecast may herald an end to a global chip shortage that has impacted production for a number of major Qualcomm customers, including Apple and Samsung Electronics Co Ltd.

Qualcomm defied broader supply chain issues, despite the fact that one of its largest customers, Apple, missed Wall Street's iPhone sales expectations. Apple CEO Tim Cook told Reuters that the problems were set to worsen on a dollar-for-dollar basis during the holiday shopping quarter.

Qualcomm has made a concerted effort to diversify its chip manufacturing partners, referred to as foundries. It is one of only a few chip designers that utilises both Samsung Electronics Co Ltd and Taiwan Manufacturing Co to manufacture dual versions of its cutting-edge chips. It relies on a network of suppliers for older technologies, including TSMC, United Microelectronics Corporation, and China's Semiconductor Manufacturing International Corp.

Qualcomm's primary business for decades was selling modem chips that connect smartphones to wireless data networks. While that market continues to be the company's largest, other segments such as radio-frequency chips, automotive chips, and internet-of-things chips accounted for more than $10 billion of the company's $27 billion in chip revenue in fiscal 2021.

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Tech Observer Desk at TechObserver.in is a team of technology reporters led by a senior editor who brings latest updates and developments from the world of technology.
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