Qualcomm warning shows semiconductor shortages are spreading

Qualcomm Inc., the world’s largest smartphone chipmaker, warned it’s struggling to satisfy demand, signaling {that a} international semiconductor scarcity is spreading.

“The shortage in the semiconductor industry is across the board,” mentioned incoming Chief Executive Officer Cristiano Amon.

Like most chipmakers, Qualcomm outsources manufacturing to corporations corresponding to Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. These suppliers are attempting and to date failing to regulate to a vigorous rebound in demand. The auto sector has complained about this just lately, however Qualcomm’s feedback present the issues are broader.

When the Covid-19 pandemic first struck in early 2020, chip orders initially collapsed. But distant work and learning has spurred demand for computer systems, whereas automotive shopping for has surged as folks keep away from public transport. That, in flip, has precipitated auto and electronics makers to re-up their chip purchases.

Amon mentioned orders for chips that run computer systems, vehicles and lots of different internet-connected gadgets are swamping the trade, which principally depends on only a handful of factories in Asia. Supply ought to enhance within the second half of 2021, he added.

ALSO READ: Auto tech agency Veoneer inks collaboration take care of Qualcomm

Qualcomm shares fell about 6% in prolonged buying and selling. The stock closed at $162.30 on Wednesday in New York, leaving it up 6.5% in 2021.

The company additionally reported quarterly outcomes on Wednesday and gave an upbeat forecast. However, that didn’t fulfill some analysts and buyers who’ve turn out to be extra bullish on Qualcomm just lately.

Outgoing CEO Steve Mollenkopf mentioned Qualcomm’s efficiency was curbed by provide constraints.

ALSO READ: Qualcomm eyes problem to Apple, Intel with $1.4 billion deal for chip startup

Apple Inc., a significant Qualcomm buyer, mentioned final week that gross sales of high-end iPhone 12 fashions have been restricted by the supply of some elements. Earlier on Wednesday, General Motors Co. warned {that a} international semiconductor scarcity will cut back manufacturing this year because the carmaker plans downtime at three vegetation.

Qualcomm is the largest maker of chips that join smartphones to wi-fi networks and in addition provides processors that give the gadgets their computer-like capabilities. With clients together with Apple and Samsung, the company’s projections are a intently watched indicator of the well being of the cell phone market.In its fiscal first quarter, Qualcomm mentioned income was $8.24 billion, a achieve of 62% from a year earlier. Analysts, on common, projected $8.25 billion. Net revenue was $2.12 a share. Excluding sure gadgets, revenue was $2.17 a share, in contrast with Wall Street’s common estimate of $2.09. Last month, Qualcomm mentioned Amon will succeed Mollenkopf, who will retire in June.

By Ian King

Back to top button