Qualcomm Dec-Quarter Revenue Shows MediaTek is Gaining Share

Qualcomm, San Diego-based semiconductor company, has disclosed its fiscal first-quarter results for the period ending December 24, 2023.
Qualcomm Snapdragon 4 Gen 2 Mobile PlatformQualcomm has achieved revenue of $9.935 billion, marking a 5 percent increase, during the December quarter of 2023. Net income of Qualcomm rose 24 percent to reach $2.767 billion.

MediaTek said its revenue was NT$129.562 billion, up 17.7 percent sequentially and 19.7 percent year-over-year, in the fourth-quarter ended December 31, 2023. The increase in sales was mainly driven by the better demand from smartphone customers.

Taiwan-based chip designer MediaTek said its full year 2023 revenue totaled NT$433.446 billion, down 21 percent from 2022.

“A simple comparison against MediaTek results and outlook clearly confirmed our concern that Qualcomm is losing market share in the Chinese Android market,” Analyst Kinngai Chan from Summit Insights said.

Breaking down Qualcomm’s QCT revenue, the figures demonstrate the company’s diversified portfolio. Handsets business contributed $6,687 million, reflecting a notable 16 percent increase. The Automotive sector witnessed a surge of 31 percent, generating $598 million. However, the IoT (Internet of Things) business units experienced a decline of 32 percent, amounting to $1,138 million.

Qualcomm’s Handsets Business

Qualcomm said its Snapdragon 8 Gen 3 Mobile Platform is setting a new standard for on-device Gen AI experiences for premium smartphones. Qualcomm’s Snapdragon 8 Gen 3 Mobile Platform powers all true flagship Android devices launched and launching this fiscal year.

Qualcomm announced the Snapdragon 7 Gen 3 Mobile Platform, which brings leading Gen AI capabilities to high-tier Android smartphones and is a category leader in both experiences and performance.

Qualcomm’s Automotive Business

Automotive companies launched 75 new models in 2023 with Qualcomm’s Snapdragon Digital Chassis Solution, highlighting growing scale in automotive and execution of design wins.

Qualcomm demonstrated digital cockpits, connected services, and advanced driver assistance enabled by Gen AI models running locally on the Snapdragon platform. These new capabilities can be enabled on a number of existing designs via a software upgrade. This represents significant new opportunities for Qualcomm and partners.

Qualcomm’s IoT Business

In PCs, Qualcomm is driving towards the launch of Snapdragon X Elite in mid-2024. Qualcomm has revealed that it won news contract. Snapdragon X Elite will set the industry benchmark for on-device Gen AI and co-pilot experiences in addition to leading performance and battery life for next-generation Windows PCs.

Zebra Technologies and Toshiba recently demonstrated on-device Gen AI capabilities for enterprise workflows and inventory management at retail self-checkout, respectively. Additionally, Honeywell showcased an edge AI box for warehouse applications powered by Snapdragon.

Looking ahead to the second quarter, Qualcomm has set a revenue target ranging from $8.9 billion to $9.7 billion. The company’s strategic focus involves the introduction of innovative chips designed to support emerging technologies such as chatbots, image generators, and other artificial intelligence features directly on devices, rather than relying on cloud computing data centers.

During a conference call with analysts, Qualcomm executives indicated that following a flurry of chip production for Android phones at the end of the previous year, they anticipate chip sales in their key market to remain flat in the current fiscal second quarter. Analysts interpret this as a potential indication that Qualcomm is facing increased competition in the Android phone market, particularly from rivals in China.

Despite challenges, Qualcomm recently secured a chip supply deal with Samsung to provide chips globally for its top-end Galaxy S24 model. However, this agreement does not cover all of Samsung’s latest models, as the South Korean electronics giant plans to use its own chips in some models, diverging from the previous generation where Qualcomm chips were exclusively employed, Reuters news report said.

In the face of fierce competition, Qualcomm is contending with Huawei’s limited use of Qualcomm for 4G phones due to U.S. export restrictions and Taiwan’s MediaTek challenging Qualcomm’s dominance in mid- and premium-tier Android phones.

On a positive note, Qualcomm extended its licensing deal with Apple through March 2027, reinforcing their partnership.

Additionally, Qualcomm is expanding into new markets such as personal computers, collaborating with partners like Dell Technologies and Lenovo Group to introduce laptops with chips claiming to outperform Apple’s in-house processors.

Baburajan Kizhakedath