Qualcomm, the global leader in cell phone chips, announced last quarter’s revenue slightly below market expectations on the 3rd, due to the impact of tight semiconductor supply, and this quarter’s revenue forecast also disappointed some analysts.
The company’s shares were down 9 percent after the news was released. The company is expected to normalize supply in the second half of the year due to tight semiconductor supply.
The outgoing Qualcomm CEO Steve Mollenkopf said that the tight supply of semiconductors has limited Qualcomm’s operational performance. Qualcomm will chip products to TSMC, Samsung Electronics OEM production, but these manufacturers are tired to cope with the huge demand of the chip industry.
Morankov told Reuters that the tight supply of chips will continue in the first half of 2021. If we can produce more, we can afford to sell more,” he said.
Qualcomm expects chip supply to normalize in the second half of the year.
Qualcomm’s financial results for the quarter were better than expected, but some analysts were expecting more.
Qualcomm expects to report revenue of $7.2 billion to $8 billion and earnings per share of $1.55 to $1.75, excluding certain items, for the quarter ending in March.
Canaccord Genuity analysts said Apple may have grabbed market share from other smartphone companies that are also Qualcomm customers, which means Qualcomm’s revenue did not get much of a boost. This means that Qualcomm’s revenue has not received much of a boost.
Qualcomm shares fell 9 percent after the close of trading on the 3rd, and later converged to 6 percent, at $151.85 per share.
Qualcomm is the world’s largest supplier of smartphone connectivity chips, with customers including Apple and Samsung. The company’s financial results are a closely watched indicator of the cell phone market situation.
Qualcomm reports profit growth last quarter, but revenue slightly below expectations
Qualcomm reported revenue growth of 62 percent year-over-year to $8.24 billion last quarter, slightly below analysts’ average estimate of $8.25 billion, and net revenue of $2.12 per share, or $2.17 per share excluding certain items, above the market estimate of $2.09.
Qualcomm is attempting to return to the company’s dominant position in the 4G era by launching the market’s first 5G connectivity chip and quickly upgrading it. This strategy has been successful to date, and Apple has once again become a Qualcomm customer.
Qualcomm expects to have 450 million to 550 million 5G phones on sale in 2021
Qualcomm said last year that it plans to adjust the way it reports earnings, and will separately report revenue for cell phones, wireless RF chips, automation and Internet-of-things chips. These businesses used to announce revenue by QCT business group.
Qualcomm announced on the 3rd that last quarter’s cell phone chip revenue grew 79% year-on-year to $4.22 billion; the wireless radio frequency front-end (RFFE) chip grew 157% year-on-year, which is used for 5G and is compatible with Qualcomm’s data machine chips and is considered strategically important.
Qualcomm expects cell phone shipments to grow in the high single digits in 2021, during which 450 million to 550 million 5G phones are expected to go on sale.
Qualcomm announced last month that Chief Executive Officer Morankov will step down in June and will be replaced by President Aimon, who is responsible for chip manufacturing.
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