Qualcomm predicts that weak smartphone demand and oversupply will continue in the first half of 2023.

(Reuters file photo)

[Financial Channel/Comprehensive Report] Chip manufacturer Qualcomm (Qualcomm) announced its financial report on Thursday (2nd), predicting that revenue and profit in the second quarter of this year will be lower than Wall Street expectations, because chip manufacturers are struggling to cope with weak demand for smartphones and The combined effect of oversupply, which is expected to persist in the first half of the year.

"Reuters" reported that Qualcomm CEO Cristiano Amon said that demand in the mobile phone industry continues to decline, and the rise in inventory levels is expected to continue at least until the first half of 2023.

In response, Amon mentioned that the company will further cut expenses and streamline operations.

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Qualcomm shares initially rose 2.7 percent in after-hours trading before falling 3 percent.

Inflation and macroeconomic uncertainty have hurt sales of consumer electronics, and while Qualcomm's focus on high-end smartphones has softened the impact to some extent, analysts say even The high-end mobile phone market has also been hit.

Maribel Lopez, an analyst at Lopez Research, said that discussions with mobile service providers showed that global smartphone demand continued to be weak, which is not good news for Qualcomm.

Qualcomm forecast revenue of between $8.7 billion and $9.5 billion for the current quarter, compared with analyst estimates of $9.55 billion, according to Refinitiv data.

Qualcomm’s Q1 revenue in this fiscal year decreased by 12% to US$9.46 billion, which was lower than Wall Street’s forecast of US$9.6 billion; Q1 revenue of the mobile phone business, which accounts for the largest proportion of total sales, fell by 18% to US$5.75 billion, compared with a 40% increase in the previous quarter. %.

A few days ago, it was reported that the U.S. Department of Commerce stopped approving licenses for exporting most products to China’s Huawei (Huawei). In 2020, it was approved to sell 4G smartphone chips to Huawei. Affected.

Qualcomm Technology Licensing President Rogers (Alex Rogers) said that the government issued licenses because Congress determined that these products would not affect national security issues, and the approved licenses will be valid for several years.

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