Qualcomm and Arm are pushing deeper into computing, bringing a boost from artificial intelligence spending. — Reuters
SAN FRANCISCO: Qualcomm Inc and Arm Holdings Plc, two chip companies heavily dependent on the smartphone market, delivered earnings reports Wednesday that showed an industry making a wobbly comeback.
Both companies pointed to a resurgence in demand for high-end model devices, but stopped short of signalling that the broader industry was on solid ground.
Qualcomm’s report was better received, with a rosy sales forecast helping send its shares up in late trading.
A more tentative Arm outlook, meanwhile, weighed on that company’s shares.
The return of consumer spending on expensive handsets, particularly in China, helped both companies’ revenue and profit top analysts’ estimates last quarter.
Expansion into new areas also shored up results. Qualcomm and Arm are pushing deeper into computing, bringing a boost from artificial intelligence spending.
And Qualcomm has made a successful foray into automotive chips.
The two companies – longtime partners that have increasingly become adversaries – are seen as bellwethers for the smartphone industry.
Qualcomm is the biggest seller of the processors that power the devices, and Arm developed much of the underlying technology used by the industry. Both companies have benefited from a shift to more upscale phones.
At Arm, phone revenue jumped 40% despite overall unit shipments only gaining 4%. Qualcomm also is getting a bigger share of the Chinese market. Revenue from the sales of Android phones increased 40% in that country this year.
For the coming year, the company is predicting that overall phone units will grow roughly 5% or less – a sign it’s not anticipating a wide recovery.
Many consumers aren’t upgrading their devices as often, a problem that has plagued much of the industry. — Bloomberg
