Qualcomm sees opportunity in Huawei's misfortune

nanoguy

Posts: 741   +12
Staff member
In brief: Qualcomm had a strong quarter following the release of Apple's iPhone 12, and the company is confident it can leverage Huawei's misfortune to expand the addressable market for its mobile chips.

Qualcomm's earnings report landed today, and it looks like the company rode the iPhone 12's wave of success and impressed investors with better than expected financial results.

For the fiscal quarter ending December 27, 2020 (Q1 of FY2021), Qualcomm made no less than $8.24 billion in revenue, a 62 percent year-over-year increase. And while that did fall short compared to the projected $8.27 billion figure thrown around by analysts, net income was $2.46 billion, almost 18 percent higher than expected and nearly two times as much as the same quarter of the previous fiscal year.

Outgoing CEO Steve Mollenkopf noted during an investor call, "the chip business is growing like crazy," attributing the good financial results on the insatiable demand for its Snapdragon Mobile Platform as well as strong sales of its modems. Part of that is thanks to a deal with Apple to supply 5G modems for iPhone, but the company also makes money from licensing its extensive list of patents to other companies.

Mollenkopf believes Qualcomm's outlook for the coming year looks particularly good in the light of ever-growing trade restrictions imposed on Huawei by the US. Simply put, demand for Huawei phones outside of China is slowing down, which is covered by other smartphone vendors that buy their chips from Qualcomm as fast as they can be made. The only problem left to figure out is supply shortages, as the executive acknowledged it would directly impact how much the company will capitalize on the opportunity.

In the meantime, Huawei is exploring the idea of building a chip manufacturing plant in Shanghai, but that's several years away from turning the tide for the Chinese company.

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nismo91

Posts: 1,110   +149
More like... "Qualcomm sees opportunity to enlarge marketshare during huawei misfortune".

it's obvious the main market for Huawei phone is no other than their home country, where Google is blocked along with Facebook and some others like Whatsapp and Youtube. Banning Google ecosystem obviously doesn't affect much, so the next blow would be to cripple their silicon supply.

just imagine if 50% of Huawei new phones come with Qualcomm chips instead of their in-house Kirin chips. it probably feels like christmas came early for Qualcomm.
 

mbrowne5061

Posts: 1,808   +1,040
...it's obvious the main market for Huawei phone is no other than their home country, where Google is blocked along with Facebook and some others like Whatsapp and Youtube. Banning Google ecosystem obviously doesn't affect much, so the next blow would be to cripple their silicon supply.
China banned Google and Facebook in China, not the US. China did this to protect their home-grown ecosystems, so it is not a "blow" to them at all

just imagine if 50% of Huawei new phones come with Qualcomm chips instead of their in-house Kirin chips. it probably feels like christmas came early for Qualcomm.

China would never allow that, since they are actively trying to expand their domestic silicon production and IP. Even if they did, there is a decent possibility that a lot of Qualcomm's latest products and IP are already banned for export to China by the US.

Qualcomm is just excited about everyone else who is finding that they need SoCs, and they can no longer turn to China as a reliable source for inexpensive parts.
 

nismo91

Posts: 1,110   +149
China banned Google and Facebook in China, not the US. China did this to protect their home-grown ecosystems, so it is not a "blow" to them at all



China would never allow that, since they are actively trying to expand their domestic silicon production and IP. Even if they did, there is a decent possibility that a lot of Qualcomm's latest products and IP are already banned for export to China by the US.

exactly. excluding Google from Huawei doesn't really do much to them in the first place.

China would never allow that, since they are actively trying to expand their domestic silicon production and IP. Even if they did, there is a decent possibility that a lot of Qualcomm's latest products and IP are already banned for export to China by the US.

Qualcomm is just excited about everyone else who is finding that they need SoCs, and they can no longer turn to China as a reliable source for inexpensive parts.

unfortunately for qualcomm that's true. I guess for now they are only permitted to supply Huawei with outdated 4G chips.