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)

According to a report from TechNews, citing Korean media outlet The Elec, Apple was exploring two options for applying the color filter to the OLED panel intended for the more affordable Vision Pro device.

The report from The Elec indicates that this yet-to-be-named MR device from Apple will use a panel that is based on a glass board with white OLED deposited on it, topped by an RGB color filter to create various colors—a method known as W-OLED+CF. For resolution, Apple is thinking about 1,500ppi.

The report points out that since this device will use a glass board, it is not OLEDoS (OLED on silicon), different from the current Vision Pro that uses Sony’s OLEDoS technology with a resolution of 3,400ppi.

The report mentions that Apple is considering two approaches to apply the color filter
for this new device. The first approach is to directly form the color filter on the thin-film encapsulation (TFE) that covers the panel. The second, more standard approach, involves forming the color filter on a glass board and then combining it with another glass board with W-OLED deposited on it, making the W-OLED glass board the base and the color filter board the top.

Apple is leaning towards the first approach—forming the filter directly on TFE—as it would require only one glass board, making the MR device thinner, according to the report from The Elec.

However, the color filter formation of TFE demands a low-temperature process to avoid damaging the OLED, which makes it more challenging, as the report from The Elec mentions. Samsung currently uses this technique of directly forming the color filter on its foldable phones, which is known as color filter on encapsulation (CoE).

However, according to the report, Apple aims for a resolution of 1,500ppi, but the Samsung Galaxy Z Fold6 inner panel has a resolution of just 374ppi. To achieve such high resolution, additional technological costs will be involved.

The report indicates that Samsung remains the most likely supplier of W-OLED+CF panels for Apple’s new MR product.

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(Photo credit: Apple)

According to a report from TechNews, citing Nikkei, Apple is reportedly in talks with Foxconn to manufacture AI servers in Taiwan as part of its strategy to capture a larger share of the booming generative AI market.

However, according to Nikkei, while Foxconn is Apple’s largest iPhone manufacturing partner, it also produces AI servers for NVIDIA, which could limit its capacity to take on Apple’s AI server orders.

The Nikkei report highlights that Apple prefers to use its own chips for building servers that will power generative AI features in MacBooks and other devices. Citing industry sources, the report stated that Apple is exploring the production of its own AI servers and has been in talks with Foxconn. However, the volume of servers Apple is considering producing is relatively low compared to the demand for NVIDIA’s GB200 servers.

The report suggests that Apple wants Foxconn to produce AI servers in Taiwan to take advantage of Taiwan’s engineering talent and R&D resources. Apple, with less experience in designing data center servers compared to NVIDIA, may require additional support for the production of its AI servers.

The report notes that as mastering AI computing and expanding data center infrastructure become critical to next-generation computing, Apple is enhancing its server capabilities in response to heavy investments in AI data centers by rivals such as Microsoft, Amazon, and Google.

According to the Nikkei report citing sources, with Foxconn occupied with fulfilling orders for NVIDIA servers, Apple has turned to China’s Lenovo and its subsidiary LCFC for additional support, along with smaller suppliers like Universal Scientific Industrial to assist with production. Additionally, Apple’s discussions with Lenovo also include plans to build server production capability in Southeast Asia, outside of China.

The report highlights that building AI servers is more complex than anticipated, and currently only a few manufacturers worldwide are capable of producing NVIDIA’s AI servers, including Foxconn, Quanta, Wistron, and Supermicro. However, the production capacities of these manufacturers are largely contracted by NVIDIA.

On the other hand, according to TechNews, institutional investors pointed out that Foxconn has production capacity in multiple regions worldwide, and given the ongoing tensions between the U.S. and China, Apple’s AI servers may not necessarily need to be manufactured in Taiwan.

The report from TechNews further noted, citing institutional investors, that the current discussion between Apple and Foxconn may still be in the early stages. However, due to their long-standing partnership, even if Apple’s order volume is relatively small, Foxconn is likely to accept the production of Apple’s AI servers.

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(Photo credit: Foxconn)

Apple announced its financial results for the fourth quarter of fiscal year 2024, which ended on September 28. According to a report from Commercial Times, the company achieved record revenue for this period, surpassing Wall Street’s expectations.

In its press release, Apple indicated that revenue rose by 6 percent year over year, reaching USD 94.9 billion.

According to its press release, the company’s net income fell due to a one-time charge related to a tax decision in Europe. The quarterly diluted earnings per share were USD 0.97. However, when excluding this one-time tax charge related to the reversal of the European General Court’s State Aid, diluted earnings per share was USD 1.64, an increase of 12% year over year.

According to a report from CNBC, revenue from iPhone increased by 6%, making up about 49% of the company’s overall sales. The report quoted Apple CEO Tim Cook, who noted that sales of iPhone 15 were stronger than those of iPhone 14 in the same quarter last year, and that iPhone 16 is performing even better than iPhone 15. Additionally, Cook highlighted the positive feedback for Apple Intelligence, which launched this week.

Furthermore, its press release also mentioned that its services revenue reaches new all-time high. According to CNBC, Apple’s services segment, which encompasses online subscriptions like iCloud, revenue from Google searches, and AppleCare warranties for its hardware, experienced a 12% year-over-year growth, reaching nearly USD 25 billion in sales.

Apple’s CFO, Luca Maestri, stated that the company’s record business performance in the September quarter generated nearly USD 27 billion in operating cash flow, enabling them to return more than USD 29 billion to shareholders.

On the other hand, the CNBC report noted that as Apple faces renewed competition from local Chinese smartphone manufacturers like Huawei, its revenue in China, Taiwan, and Hong Kong declined slightly year over year to USD 15.03 billion.

According to the report from CNBC, Apple expected sales growth of low to mid-single digits in the December quarter.

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(Photo credit: Apple)

According to a report from Economic Daily News, while the industry is still focusing on the launch of Apple’s new products featuring self-developed M4 chips, Apple is reportedly making significant investments in the development of its next-generation M5 chips, to strengthen its position in the AI PC competition with more powerful ARM architecture processors.

Notably, the report highlighted that Apple will continue to adopt TSMC’s 3nm process, increasing orders for TSMC’s advanced processes. According to the report, it is expected that the next-generation M5 chip will be launched as early as the second half of next year to the end of the year.

In the current wave of AI PC competition, tech giants in the x86 camp, such as Intel and AMD, have launched new processors to vie for market share. Meanwhile, Apple, the market leader in the Arm camp, is accelerating its efforts to expand its presence and continue to develop next-generation self-developed chips, as indicated by the report.

According to the report, citing industry sources, Apple’s upcoming M5 chip is expected to deliver enhanced AI performance and computing power, potentially triggering a new wave of iPhone purchases. The report indicated that this will generate substantial chip foundry orders for TSMC. Plus, it will also benefit Apple’s end-product partners, such as Foxconn and Quanta.

Regarding Apple’s decision not to use TSMC’s 2nm process for the M5, the report, citing industry sources, noted that this is primarily due to the high costs. However, compared to the M4, the M5 features significant advancements, as it will utilize TSMC’s 3D chip-stacking technology, known as SoIC. This approach allows for better thermal management and reduced leakage compared to traditional 2D designs, as the report pointed out.

Apart from using TSMC’s 3nm process for chip development, the report noted, citing industry sources, that Apple has actively placed orders for TSMC’s 2nm process and the first batch of production capacity of the A16 process.

According to the report, The 2nm process is expected to be introduced as early as next year in the APs for Apple’s iPhone 17 Pro and 17 Pro Max models. As for the rumored ultra-thin iPhone 17 Air model, its AP may continue to use the 3nm process family.

Regarding clients for the 2nm process, the report noted, citing comments from TSMC’s chairman C.C. Wei during a previous earnings call, that inquiries for the 2nm process are outpacing those for the 3nm process. Additionally, the A16 process is considered highly attractive for AI server applications.

Wei noted that high-performance computing (HPC) applications are increasingly moving toward chiplet designs; however, this shift will not impact the adoption of the 2nm process. According to the report, current customer demand for the 2nm process exceeds that of the 3nm process, and production capacity is expected to be higher, as the report indicated.

According to an industrial source cited by MoneyDJ, TSMC started the mass production of 3nm in 2022, while the 2nm is expected to enter volume production in 2025, indicating that the generation cycle for a node has been expanded to three years.

Thus, supported by TSMC’s major clients, the contribution from 3nm will continue to rise next year and remain a key revenue driver in 2026, while the 2nm process is expected to replicate or even surpass the success of 3nm, MoneyDJ notes. According to previous market speculations, tech giants such as Apple, NVIDIA and AMD are believed to be the first batch of TSMC’s 2nm customers.

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(Photo credit: Apple)