Net Profit Surges 140%
Analysis Suggests Reflection of COVID-19 Base Effect
[Asia Economy Reporter Kim Suhwan] American semiconductor chip manufacturer Qualcomm announced a surprise strong performance in the second quarter of this year, driven by a surge in semiconductor demand.
According to CNBC on the 28th (local time), Qualcomm's adjusted revenue for the second quarter of this year (Qualcomm's own fiscal third quarter) surged 63% to $8 billion (approximately 9.23 trillion KRW) from $4.89 billion in the same period last year, surpassing the market expectation of $7.58 billion.
Adjusted earnings per share also greatly exceeded market expectations at $1.92 compared to the expected $1.68.
Net income recorded $2.027 billion (approximately 2.4 trillion KRW), a 140% increase from $845 million in the same period last year.
This strong performance is analyzed to be due to increased demand for various semiconductor products such as smartphone and communication chips as the economy resumed after the COVID-19 pandemic.
Qualcomm's core business division, the communication semiconductor division, recorded sales of $6.47 billion (approximately 7.5 trillion KRW), a 70% increase compared to the same period last year.
Specifically, semiconductor sales for smartphones in this division reached $3.863 billion (approximately 4.5 trillion KRW), a 57% increase from the same period last year.
Additionally, sales of Radio Frequency Front-End (RFFE) components?which include critical communication parts located between device modems and antennas such as power amplifiers, switches, and filters?recorded $957 million (approximately 1.1 trillion KRW), a 114% surge compared to the same period last year.
Sales of Internet of Things (IoT) products also grew 83%, reaching $1.4 billion (approximately 1.61 trillion KRW).
The Technology Licensing division, which includes patent royalties from mobile headsets and others, recorded sales of $1.49 billion (approximately 1.72 trillion KRW), a 43% increase compared to the same period last year.
However, some analysts note that part of this growth reflects a base effect, considering that semiconductor demand was low during the COVID-19 pandemic last year.
In a statement on the day, Qualcomm said it expects its sales to rise as global economic activity resumes and smartphone demand recovers. Qualcomm predicts double-digit growth in smartphone shipments this year compared to last year.
Earlier this month, Cristiano Amon, who began his term as Qualcomm CEO, declared plans to focus investment on new business sectors such as automotive semiconductor design, network chips, IoT, and RFFE.
CEO Amon said on the day, "Business diversification is becoming a reality," adding, "Our company is transforming into a very important enterprise across many other industrial sectors."
He further stated that he expects the new business sectors to generate $10 billion in revenue within this year.
Additionally, Qualcomm expects to achieve average sales of $8.8 billion in the third quarter.
Qualcomm also noted that the ongoing semiconductor supply shortage has had some negative impact on its performance.
In response, Qualcomm emphasized that it is focusing on securing additional production lines with foundry (semiconductor contract manufacturing) companies and expects semiconductor supply to return to a smooth level within this year.
Earlier, Intel, a U.S. comprehensive semiconductor company that declared entry into the foundry market, announced on the 26th that it had secured Qualcomm as a customer. Analysts interpret this as Qualcomm’s intention to minimize the impact of the semiconductor shortage aligning with Intel’s desire to expand its foundry business.
Qualcomm, listed on the Nasdaq, saw its stock price rise more than 3% to $146.98 in after-hours trading following the announcement of the strong earnings.
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