Premium Android ‘Primary Driver’ of Qualcomm’s Handset Business: CEO

Qualcomm CEO Cristiano Amon had a relatively positive take on the semiconductor industry’s demand-supply imbalance when he said on a call Wednesday for fiscal Q4 ended Sept. 26 that the company expects “material improvements” to its supply by Dec. 31. He credited increases in capacity at Qualcomm’s suppliers, plus the company’s successful execution of its “second-sourcing initiatives.” Assurances of better supply are reflected in Qualcomm’s guidance for fiscal Q1 ending late December, he said. The company expects 16% sequential revenue growth at the high end of its guidance, plus 32% year-over-year revenue growth in its handset business. Android at the premium tier “is the primary growth driver in our handset business right now,” said the CEO. Like virtually all in the tech industry, Qualcomm in its September quarter endured supply constraints “really across the board,” said Chief Financial Officer Akash Palkhiwala. It’s conjecture “how the demand would have played out if there was supply across the industry, but we feel pretty comfortable that the overall supply picture is playing out exactly as we had planned,” he said. Qualcomm now has three parts that are “dual-sourced, that are available,” he said. There also are “capacity expansions with our suppliers that were previously being planned,” he said. The company continues to have “pockets” of the business in which “we would ship more, if we had more, but we see a lot of improvements,” said Amon. The industry will still face “some shortage” in calendar 2022's first half, “but as we get to the second part the year, in general, supply and demand are going to be aligned,” he said. The stock closed 12.7% higher Thursday at $156.11 after Qualcomm reported 56% year-on-year revenue growth in its handset business.