5G demand boosts business at the chip company Qualcomm

At the chip company Qualcomm, the interest in fast 5G data transmission is causing rapid growth. In the past quarter, sales rose 65 percent year-on-year to a good eight billion US dollars. The profit even jumped from 845 million dollars (715.5 million euros) a year ago to a good two billion dollars recently.

According to stock market experts, however, this is a Compared to a weak quarter, how CNBC notes. In the second quarter of 2020, the chip developer saw lower demand due to the coronavirus pandemic. Qualcomm is among other things strong in the business with 5G modems, with which the Californian company also supplies Apple’s iPhones, for example. In addition, the main chips of many smartphones with Google’s Android operating system come from Qualcomm.

Qualcomm generates 80 percent of its revenue from sales of these chips. Here are the earnings from last year increased by 70 percent to now 6.47 billion dollars, as Qualcomm announced after the US market closed on Wednesday. Qualcomm recorded the greatest growth in the semiconductor sector with modem chips, for example for 5G mobile communications. Here sales rose 114 percent to $ 957 million.

The automotive sector at Qualcomm is still relatively modest with quarterly sales of $ 253 million, but growth was also recorded here at 83 percent. At the same time, the Internet of Things (IoT) division also grew by 83 percent to just under 1.4 billion dollars in sales. Here Qualcomm offers energy-efficient chips for network and industrial purposes.

Qualcomm does not manufacture its chips itself, but has them produced by manufacturing partners such as TSMC and Samsung. Qualcomm is also struggling with the global chip shortage, but the chip developer also wants to use Intel’s foundry services in the future. Qualcomm still wants to have overcome the delivery bottlenecks for microchips by the end of 2021. The company had already promised that in the last quarter.

For the remainder of the year, Qualcomm expects single-digit percentage growth in smartphone sales after demand fell 11 percent during the coronavirus pandemic. This should include 450 to 550 million 5G cell phones. Therefore Qualcomm is forecasting further sales growth to 8.4 to 9.2 billion dollars for the third quarter. In the same period last year, Qualcomm’s sales were still $ 8.35 billion.

Market observers had expected quarterly sales of 7.5 billion dollars, which Qualcomm has exceeded quite significantly with 8.06 billion. Since the forecast for the rest of this year was also positive, Qualcomm’s share price climbed almost four percent in after-hours trading. (with material from dpa) /


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