Qualcomm Posts 'Earnings Surprise' Despite Semiconductor Shortage... Signal of Supply Chain Relief

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Despite the global semiconductor shortage and supply chain disruptions, American semiconductor company Qualcomm posted earnings that exceeded market expectations. This is being interpreted as a sign that the semiconductor shortage is nearing its end, leading to optimistic forecasts for the semiconductor market going forward.

On the 3rd (local time), Qualcomm announced in its earnings report that it achieved sales of $9.336 billion (approximately 11 trillion KRW) in the 4th quarter of the U.S. fiscal year (July to September 2021, corresponding to the 3rd quarter in Korea). This represents a 12% increase compared to the same period last year and significantly surpasses Wall Street’s forecast of $8.86 billion. Operating profit was recorded at $2.902 billion (approximately 3.43 trillion KRW).

Qualcomm CEO Cristiano Amon stated, "We exceeded the targets set in 2019, including sales growth, business diversification, and operating margin growth."

The strong performance was driven by semiconductors for smartphones. The demand for smartphone semiconductors surged due to the spread of 5th generation (5G) mobile communications. Qualcomm’s smartphone semiconductor division recorded sales of $7.7 billion, a 56% increase compared to the same period last year. This was an earnings surprise despite the global semiconductor shortage and supply chain disruptions.

CEO Amon explained, "Most of the demand for smartphone semiconductor chips comes from smartphones using the Android operating system."

Additionally, the Internet of Things (IoT) segment, which connects various home appliances to the internet, also posted solid results. IoT business sales reached $1.5 billion, growing 66% compared to the same period last year.

Bloomberg evaluated Qualcomm’s strong performance as "a sign that the global semiconductor shortage is nearing its end." Bloomberg added that this indication can be found in the reduction of semiconductor supply delays in October. Qualcomm is also understood to be focusing on resolving the semiconductor shortage by reorganizing its supply chain so that two or more suppliers manufacture its core products.

On the Nasdaq market that day, Qualcomm’s stock closed at $138.48, up 2.4% (3.25 points) from the previous session. In after-hours trading, the gain expanded to as much as 7.6%.

This content was produced with the assistance of AI translation services.