Qualcomms smartphone chip sales are down 18 and stocks continue

Qualcomm’s smartphone chip sales are down 18%, and stocks continue to overflow until mid-year

With over 60% of Qualcomm’s revenue coming from chips for mobile devices last quarter, the company’s earnings report offers a glimpse of what’s happening in the smartphone market. Revenue in this division fell 18% to $5.75 billion, despite growing 40% in the prior quarter. Qualcomm’s management believes there will be overstock by the middle of this year.

    Image source: Reuters, Aly Song

Image source: Reuters, Aly Song

Qualcomm’s total revenue fell 12% to $9.46 billion last quarter, well below analysts’ expectations ($9.6 billion). “The mobile phone industry continues to experience subdued demand, we now expect the increased stock levels in the supply chains to persist at least until the end of the first half of calendar year 2023,” – said at the reporting event, the company’s CEO Cristiano Amon (Cristiano Amon). According to him, measures are being taken to reduce costs and optimize operations.

A “ray of light in a dark realm” could be its automotive components business, where Qualcomm reported revenue growth of 58% to $456 million, but expects current-quarter revenue to remain at current levels. A highlight of the past quarter was Qualcomm’s decision to invest in Ampere, Renault’s electric vehicle and software company.

Qualcomm’s total revenue for the current quarter should be in the range of $8.7 billion to $9.5 billion, according to company management, slightly below analysts’ expectations, which expected $9.55 billion if the forecast changes verified by Qualcomm.

Net income fell 34% to $2.24 billion last quarter. In addition to macroeconomic factors Apple pointed out the previous day, Qualcomm officials also mentioned maintaining a high inventory of finished products. According to the Qualcomm boss, demand for smartphones fell the most in the lower and middle price ranges.

Alex Rogers, Qualcomm’s President of Global Licensing, spoke about the potential impact of the US authorities’ recent decision to stop issuing new export licenses for the supply of components for Huawei Technologies, and stated that the company remains able to provide it to supply Chinese customers with chips for 4G and Wi-Fi, as US regulators have determined that these shipments do not affect US national security. As a result, Qualcomm expects to continue such shipments for several more years.

Qualcomm’s technology licensing revenue fell 16% to $1.52 billion, falling short of analysts’ expectations of $1.54 billion.

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