Qualcomm has diversified its business over the years, but above all, it continues to be the company that makes Snapdragon processors for Android phones. Not for nothing, the company itself holds a ‘party’ in Hawaii every year to present its most powerful mobile (and laptop) processors for the coming months, but this year things went cold due to the infamous memory crisis.
And, in a situation where global mobile shipments have declined, Qualcomm has decided to retool the liner. Juicy purpose? Vehicles for SpaceX and AI, antennas of course.
In short. Like many others, Qualcomm presented financial results. In their case, like Apple, they correspond to the last quarter of their fiscal year and the bottom line is $10,442 million earned during this period, with an operating profit of $2,769 million. A lot of money, but 7% less than what was achieved during the same period of the previous year.
Earnings per share fell 28% and operating profit fell 27%. And, while revenue “slightly” exceeded the $10.14 billion that Wall Street had expected, it’s clear there’s some concern as a major leg of the business has limped off.
Light and shadow. In the analysis presented by the company, we can see that the automotive segment grew by 89% to 1,990 million dollars. This is a significant increase which, however, fails to cover the fact that the mobile chip division had a turnover of “only” 5,137 million dollars. This represents 26% less than the same period of the previous year and reflects what the situation is.
logical. We’ve talked throughout this year (and even at the end of last year) about how the RAM and storage crunch is going to shrink the mobile market. At first we theorized that companies would go back to betting on models with less RAM, but what ended up happening is that the RAM was mostly maintained, but the price of the device went up.
Also something more drastic, like fewer mobile phones being manufactured and shipped in a clear contraction of the market. International Data Corporation, a consulting firm specializing in technology and one of the strongest sources, along with Canalys and Counterpoint, already noted in August that global mobile phone shipments are set to decline by around 17% this year.
He also noted that DRAM and NAND prices have increased by more than 300% year-on-year, and the average price of a mobile phone has increased by up to 28%. It doesn’t mean that fewer people buy mobile phones and mobile phones are more expensive, but Qualcomm is seeing its margins shrink. Earlier, the processor was the most expensive component of a mobile phone, but now it is the RAM.
Promising beach. The chips division’s operating margin fell to 24% from 29% a year ago and is estimated to be between 20% and 22% in the current quarter. This leads to the search for solutions, and here they point in three directions:
- coches We have already said that they have grown and they expect it to be a strong leg for the 2027 financial year.
- Data center. They expect more than 650 million for data center chips this quarter, with a goal of reaching 5,000 million for the full fiscal year. To do this, they have contracts like Amazon for AI inference chips.
- Antenna for SpaceX. This same November 4, Qualcomm announced that it is going to supply radio equipment, baseband units and software for Starlink Mobile’s future terrestrial 5G network in the United States. They will deploy thousands of towers starting in 2027, and Qualcomm itself (which makes 5G chips for Apple) has described the operation as “its largest 5G deal to date.” It is also the foundation of the future 6G infrastructure for AI.
turn the boat. The problem with this is that things are very much up in the air. Chips and cars are markets that Qualcomm has assured, but both SpaceX and data center revenues depend on those data centers, the bubble not bursting, SpaceX’s plans going according to plan, and big tech like Amazon betting on those Qualcomm inference chips showing more interest rather than more solutions with another manufacturer.
Apart from this, it is another example of how the situation of AI has disrupted a company’s plans. Sometimes for the worse (Qualcomm and mobile phones), sometimes for the better (Nvidia abandoning gaming to focus on AI GPUs or Micron abandoning the consumer segment and making RAM just for AI).
Through this elec
Picture | Federal Communications Commission
In Xataka | Qualcomm believes that 6G will be the definitive network for AI and has already set a date: the reality is that 5G is still in its infancy.
