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michigan
Paul Jacobs, Qualcomm chairman and CEO, said the company is “disappointed that ...
Luis Sanchez
And... which of the Qualcomm products belong to the 28nm process? Which are the ...
Qualcomm sees 28-nm capacity crunch through 2012
Dylan McGrath
7/18/2012 6:08 PM EDT
Sequential sales slip, guidance trimmed
Qualcomm reported sales of $4.63 billion for the quarter, down 6 percent from the previous quarter and up 28 percent compared with the year-ago quarter. Sales for the quarter were roughly at the mid-point of Qualcomm's guided target of between $4.45 billion and $4.85 billion, but fell short of consensus analysts' expectations of about $4.68 billion, according to Yahoo Finance.
Net income for the quarter was $1.21 billion, Qualcomm said, down 46 percent from the previous quarter and up 17 percent from the year-ago quarter. The company reported earnings per diluted share for the quarter of 69 cents, down 46 percent from the previous quarter and up 13 percent from the year-ago quarter.
On a pro-forma basis, excluding charges, Qualcomm reported a net income of $1.49 billion, down 16 percent from the previous quarter and up 20 percent from the year-ago quarter. The company reported pro forma earnings per share of 85 cents, down 16 percent from the previous quarter and up 16 percent from the year-ago quarter.
Pro forma earnings per share came up just short of consensus analysts' expectations of 86 cents, according to Yahoo Finance.
Qualcomm said it expects sales for the current quarter, which closes in September, to be between $4.45 billion and $4.85 billion, which would represent an increase of 8 to 18 percent compared to the same period of 2011. Guidance for the current quarter fell short of consensus analysts' expectations of about $4.9 billion, according to Yahoo Finance.
Qualcomm also trimmed the high end of its sales target for the fiscal year, which also closes in September. The company said it now expects sales for the year to be between $18.7 billion and $19.1 billion, down from a previously guided range of $18.7 billion to $19.7 billion. The new guidance would represent an improvement of 25 to 28 percent compared to fiscal 2011 sales of $14.96 billion.
Ian Ing, an analyst with Lazard Capital Markets LLC, said in a report circulated Thursday that Qualcomm's disappointing guidance for the current quarter will be largely a replay of what happened in calendar 2011, when a "air pocket" emerged in fall ahead of strong sales to close the calendar year.
Ing maintained Lazard's "buy" rating on Qualcomm shares and increased its price target for the stock to $75 from $74. Qualcomm's stock traded at $56.67 Thursday morning, up nearly 3 percent from Wednesday's close.
Qualcomm reported sales of $4.63 billion for the quarter, down 6 percent from the previous quarter and up 28 percent compared with the year-ago quarter. Sales for the quarter were roughly at the mid-point of Qualcomm's guided target of between $4.45 billion and $4.85 billion, but fell short of consensus analysts' expectations of about $4.68 billion, according to Yahoo Finance.
Net income for the quarter was $1.21 billion, Qualcomm said, down 46 percent from the previous quarter and up 17 percent from the year-ago quarter. The company reported earnings per diluted share for the quarter of 69 cents, down 46 percent from the previous quarter and up 13 percent from the year-ago quarter.
On a pro-forma basis, excluding charges, Qualcomm reported a net income of $1.49 billion, down 16 percent from the previous quarter and up 20 percent from the year-ago quarter. The company reported pro forma earnings per share of 85 cents, down 16 percent from the previous quarter and up 16 percent from the year-ago quarter.
Pro forma earnings per share came up just short of consensus analysts' expectations of 86 cents, according to Yahoo Finance.
Qualcomm said it expects sales for the current quarter, which closes in September, to be between $4.45 billion and $4.85 billion, which would represent an increase of 8 to 18 percent compared to the same period of 2011. Guidance for the current quarter fell short of consensus analysts' expectations of about $4.9 billion, according to Yahoo Finance.
Qualcomm also trimmed the high end of its sales target for the fiscal year, which also closes in September. The company said it now expects sales for the year to be between $18.7 billion and $19.1 billion, down from a previously guided range of $18.7 billion to $19.7 billion. The new guidance would represent an improvement of 25 to 28 percent compared to fiscal 2011 sales of $14.96 billion.
Ian Ing, an analyst with Lazard Capital Markets LLC, said in a report circulated Thursday that Qualcomm's disappointing guidance for the current quarter will be largely a replay of what happened in calendar 2011, when a "air pocket" emerged in fall ahead of strong sales to close the calendar year.
Ing maintained Lazard's "buy" rating on Qualcomm shares and increased its price target for the stock to $75 from $74. Qualcomm's stock traded at $56.67 Thursday morning, up nearly 3 percent from Wednesday's close.
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markwrob
7/18/2012 6:43 PM EDT
How long has it been since Qualcomm engaged with the other 3 foundries? I'd suspect there really won't be too great an impact to Qcualcomm's sourcing issues yet. Perhaps they got pricing concessions or similar out of TSMC as a result, though that won't show up on their books yet, either. Down the road a little (December?) this could work out well for Qualcomm, though now they will have to juggle libraries and flows for 4 fabs not one. Any "unified" libs and flows will be full of compromises.
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dylan.mcgrath
7/18/2012 7:12 PM EDT
I don't know that Qualcomm has given a specific date on that, but it sounds like it's been longer than we initially thought. They announced in April that they had engaged other foundries, but I suspect it was a while before that. Mollenkopf made a comment on the call to the effect that Qualcomm typically works with multiple foundries at any given time. Seems like the strategy of casting a wider net is going to continue. But Qualcomm execs said, as they have said before, that they need to do a better job of anticipating demand at new technology nodes and planning for it.
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SiliconAsia
7/18/2012 7:12 PM EDT
Porting the design from one foundry to another is 9-12 months process if everything is going well evenif the process so called compatible to each other. If you face yields and reliability issues in the middle of, it could potentially drag you much longer. So I assumed Qualcomm engaged with the other two foundries at the end of 2011.
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rick.merritt
7/19/2012 12:04 AM EDT
Even in a supply constrained situation for its high-end products the company is making something like a 25% profit. Not bad considerting some of its customers struggle to get into double digit net profit percentages.
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banana.republic
7/20/2012 10:24 AM EDT
Rick, you giant turkey, Qualcomm makes 14% operating profit margin on its chips. Still best in class, but way below 25%.
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Luis Sanchez
7/21/2012 10:18 AM EDT
And... which of the Qualcomm products belong to the 28nm process? Which are the Qualcomm's products on a low supply?
I suppose this directly impact some mobile phone manufacturers which depend on their chips. But certainly this has to be only for this and perhaps the upcoming quarter. Unless this isn't enough time to make the new foundries capable of producing their chips. Last I heard this was an enormous job meaning it would take a long time. Around how long would this take?
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michigan
7/24/2012 7:21 PM EDT
Paul Jacobs, Qualcomm chairman and CEO, said the company is “disappointed that it could not secure enough capacity to meet strong demand 28nm product”. In my opinion it is not capacity issue, but device performance issue because some time ago Mr. Jacobs made a similar statement that it has a strong demand for its Snapdragon S4 processor chips manufactured by TSMC, but TSMC could not deliver. The Snapdragon chips are originally designed to run the full blown Microsoft OS, Windows 8. In order to run Windows 8 Pro, high speed or high performance is required as well as low power. TSMC’s planar bulk 28nm can’t deliver such low power and high performance because when performance is increased, power or leakage current also increases. On the other hand, significantly lower power and higher performance compared with TSMC’s bulk 28nm are achieved by Intel’s Tri-gate 22nm based Ivy Bridge chips, thus ideal to run on Windows 8. Recently, Microsoft announced to adopt Intel’s Ivy Bridge processor chips to run its Windows 8 and may adopt Qualcomm’s Snapdragon chips for Windows RT which is a striped down version of Window 8. Ivy Bridge chips are in high volume manufacturing today. It is reported that Windows 8 based tablets and ultrathin notebooks become available third quarter this year. Intel’s FD (fully depleted) tri-gate technology is published at 2012 VLSI symposium for the first time and is at least three to four years ahead of its rivals. TSMC has no capacity issues for manufacturing the low power and low performance chips for ARM, but not for Qualcomm Snapdragon chips. That is why Mr. Jacobs is so disappointed. Qualcomm and ARM are engaging in vain with multiple foundries, hoping that they could deliver ultralow power and high performance chips. That is the reason why Mr. Jacobs is even contemplating to have its own fab, even though it is highly unrealistic but what he can do if the multiple foundries can’t deliver?
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