Trade Resources Company News Qualcomm Saw a Double-Digit Increase in Sales This Year

Qualcomm Saw a Double-Digit Increase in Sales This Year

Qualcomm saw a double-digit increase in sales this year and is now the world's third-largest chip maker, according to research firm IHS iSuppli. With a 27.2% growth in semiconductor revenue, Qualcomm is booming while seven of the top 10 semiconductor suppliers are dealing with declining sales.

Only two years ago, Qualcomm was in ninth place among chip makers worldwide. This is the first time that Qualcomm has ranked as high as third in the chip market. Intel and Samsung are No. 1 and No. 2, respectively.

"This year has been terrible for most semiconductor application markets, with the sole exception of the wireless segment, which is expected to generate robust revenue growth this year," said Dale Ford, a senior director at iSuppli. "Consumers are continuing to buy more smartphones and media tablets, as sales of other once-hot products like PCs and flat-panel TVs decelerate or decline."

Qualcomm's revenue is expected to jump to $12.9 billion in 2012 from $10.1 billion in 2011. The company's rise in the rankings reflects the growth in importance of mobile technologies.

"With its chips at the heart of countless cellphones, including Apple Inc.'s marquee iPhone 5, Qualcomm has discovered an oasis of growth in the desert that is the semiconductor market in 2012," added Ford.

Intel, the top chip maker, is expected to endure a 2.4% drop in revenue, from nearly $49 billion in 2011 to about $47.5 billion in 2012. On the other hand, No. 2 Samsung is expected to register revenue growth of 6.7%, from $28.5 billion last year to $30.4 billion this year.

Tuesday's iSuppli report about Qualcomm's ascendance comes on the heels of the research firm's announcement on Monday that it had downgraded its outlook for the chip market as a whole for the third time since August.

The firm now expects worldwide chip sales to decline 2.3% in 2012, from $310 billion in 2011 to $303 billion this year. If that report is on target, 2012 would mark the first year that the global chip industry has suffered an annual decline since 2009.

While the wireless market still is predicted to continue to grow in 2012, iSuppli noted that five of the six major markets for semiconductors, including the key computer segment, are expected to decline this year.

"It's not a surprise that Qualcomm has moved up in the ranks of chip producers when you consider the sheer volume of chips that are being produced to go into mobile devices worldwide," said Dan Olds, an analyst at Gabriel Consulting Group.

One question is how the growth in mobile sales and the decline in sales of traditional PCs will affect top semiconductor players like Intel and AMD. Intel has been taking major steps to branch out into the mobile market.

According to Patrick Moorhead, an analyst at Moor Insights & Strategy, Intel's effort could help the chip maker retain its top position.

"Wireless and mobility is a very hot market and will continue to be for the foreseeable future," Moorhead said. "Intel will benefit, too, as they shift their guns on mobility.... Intel is four times larger than Qualcomm today, but they must turn the corner on wireless and mobility. Intel made a good start, but they must get into business mode and make that business relevant."

While Intel works to hold on to its top position, iSuppli noted that seven of the top 20 semiconductor suppliers are expected to suffer double-digit percentage drops in revenue in 2012. Those companies include AMD, Freescale Semiconductor, Texas Instruments, Toshiba, STMicroelectronics, Elpida Memory and Renesas Electronics. The percentage decreases in revenue at those companies are expected to range from 11.4% to 17.7%.

Source: http://www.computerworld.com/s/article/9234319/Mobile_pushes_Qualcomm_to_third_place_in_shaky_chip_market
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Mobile Pushes Qualcomm to Third Place in Shaky Chip Market