On Wednesday, chipmaker Qualcomm said that it had come up with solutions to mitigate the challenges brought about by the global shortage of chips, and forecasts a rise in the sale of chips for 5G smartphones, including Apple’s iPhones.
The company saw total revenues jump 63 percent to almost $8 billion. Revenue was boosted by the huge demand and sale of chips for connected devices that hit $1.4 billion.
Qualcomm supplies modern chips that are used by iPhones to connect to wireless data networks and the modems and central processors for much of the Android market and remains the world’s largest supplier of mobile phone chips. When it comes to the 5G technology, it is also leading the pack.
The company saw its shares rise 3.1 percent to $146.86 after the results it reported. The results could help boost the dwindling confidence of investors; the global chip shortage was a source of worry to them.
According to what Christiano Amon; the company’s Chief Executive Officer told investors in a conference call, Qualcomm had made efforts to secure its chips from multiple manufacturing partners and this was paying off. “We’re still on track to materially improve supply by the end of the calendar year”, he said.
With Huawei Technologies Co. Ltd. out of the picture, Qualcomm is one of the quite numerous companies gaining from its exit from the global smartphone market. Huawei Technologies, which was a major contender in the smartphone, did not Qualcomm chips for its flagship phones. However, Huawei’s rivals, who are now leading the global market, make use of Qualcomm chips making it a win situation for Qualcomm.
Apart from 5G chips, Qualcomm sales of other chips such as radio-frequency chips have also seen massive sales growth. Sales of chips for cars, IoTs, etc., have also grown. The company added on Wednesday that it expects sales of the aforementioned chips to hit $10 billion this fiscal year, up from $6 billion the previous year. The company also said it expects adjusted profits of $8.24 per share for its fiscal 2021, close to double the figure from the previous year.
For the fiscal third quarter ended June 27, Qualcomm said overall adjusted revenues and adjusted profits were $8 billion and $1.92 per share, surpassing estimates of $7.58 billion and $1.68 per share, according to Refinitiv data.
Qualcomm had the most sales with mobile handset chips which increased 57 percent to $3.86 billion in the quarter.
Radio-frequency chips and IoT chips reached sales of $957 million and $1.4 billion, up 114% and 83% from the previous year respectively.
“Qualcomm has done a phenomenal job in driving the 5G ecosystem. For sure it’s moving a lot faster than 4G”, Paolo Pescatore, an analyst at PP Foresight commented.