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[News] Qualcomm Derived Nearly 50% of FY24 Sales from China, Eyeing 10% QoQ Revenue Growth This Quarter
Amid the passion of the wild election, U.S. chip giant Qualcomm reported an upbeat first-quarter (ended December 31) sales forecast, with revenue rising between USD 10.5 billion and USD 11.3 billion, eyeing for an over 10% quarter-over-quarter growth at most. The strong momentum, according to a report by Reuters, could be attributed to the smartphone market recovery led by China.
Boosted by New Smartphone Launches led by Xiaomi, Oppo
It is worth noting that China remains Qualcomm’s largest market, and the momentum is driven by new smartphone releases from brands like Xiaomi, Oppo, and Vivo, according to the report. Qualcomm has derived 46% of its revenue in its most recent fiscal year from customers with headquarters in China, Reuters says.
A previous report by the South China Morning Post suggests that China’s smartphone maker Xiaomi will be the first to equip Qualcomm’s newly-released Snapdragon 8 Elite with its Xiaomi 15 series at the end of October, followed by other local smartphone brands such as Honor, Oppo’s OnePlus and Realme.
As the smartphone market starts to rebound following a challenging 2023, Qualcomm’s positive outlook is said to be driven by consumers upgrading devices for AI applications like chatbots and image generation tools, Reuters notes.
Business Expansion beyond Apple Remains Key
On the other hand, Qualcomm is working hard to diversify its revenue streams in anticipation of the eventual end of its profitable partnership with Apple, which is developing its own modem chips to replace Qualcomm’s. According to Reuters, though the agreement to supply chips to Apple lasts until at least 2026, attention is on whether Qualcomm’s expansion into laptops and AI-driven data centers will grow swiftly enough to balance any future reductions in Apple-related revenue.
Regarding the potential impact if President-elect Donald Trump does impose broad tariffs of 10% to 20% on nearly all imports, with potential tariffs exceeding 60% on Chinese goods, Reuters notes that if higher tariffs were applied to chips from Taiwan, though rather unlikely, could incentivize Qualcomm to shift manufacturing to the U.S.
For the fourth quarter (ended September 30), Qualcomm posted a net income of USD 2.92 billion, or USD 2.59 per share, marking a significant increase from last year’s USD 1.49 billion, or USD 1.23 per share. The company’s total revenue for fiscal 2024 reached USD 38.9 billion, a 9% rise compared to 2023, according to its press release.
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(Photo credit: Qualcomm)
