Qualcomm continues to rise thanks to 5G sales, despite global chip shortage

Qualcomm Snapdragon 400 with 5G
Qualcomm Snapdragon 400 with 5G (Image credit: Qualcomm)

What you need to know

  • Qualcomm reported a 52% year-over-year increase in revenue in its recent quarterly earnings.
  • The company has expressed a positive outlook on the state of the global chip shortage later this year.
  • Qualcomm partially attributed its endurance in the chip shortage to a "reduction on orders from an OEM."

Qualcomm announced its quarterly financial earnings on Wednesday, beating analyst expectations with $7.93 billion in revenue, a 52% increase when compared to the same quarter last year. That's despite not only a global pandemic but also a global semiconductor shortage that has affected several different industries, not to mention the availability of devices like the PS5. Outgoing CEO, Steve Mollenkopf, attributed Qualcomm's strong growth to its strong position in the market:

Demonstrating the strength of our strategy and our success in execution, we delivered another quarter of year-over-year growth driven by sustained demand for smartphones globally and our ability to increase the scale of our non-handset revenues.

The impact of the global semiconductor shortage has reportedly affected companies like Samsung who makes many of the best Android phones. When questioned about the company's strategy in dealing with the shortage, CFO Akash Palkhiwala alluded to the "reduction on orders from an OEM," which allowed the company to redirect its supply. It's possible that this could refer to LG's recent exit from the smartphone industry. Despite said reduction, the company was still able to manage more than $4 billion in handset revenue, a 53% increase compared to the same quarter last year. That could be thanks to cheaper 5G chipsets like the Qualcomm Snapdragon 480, bringing 5G to lower price points.

Qualcomm also presented a positive outlook on the shortage, stating that it expects the situation to improve in the second half of the calendar year. This follows similar remarks from CEO-elect Cristiano Amon during his Reddit AMA earlier this month:

If anything, this semiconductor shortage highlighted the importance of our technology to the future of our economy and the significance of the opportunity ahead of us. We are optimistic that the semiconductor supply constraints will improve in the second half of the calendar year.

While Qualcomm does expect a slight decline in the following quarter, the company noted that the current supply constraints would help drive demand, particularly when more flagships like the rumored Samsung Galaxy Z Fold 3 launch in the second half of the year and in time for the Holiday season. Qualcomm has been known to launch mid-year refreshes to its most popular chips as it did with last year's Snapdragon 865+. Given that the company estimates as 5G shipments to reach as much as 550 million units, we might expect the same treatment with its flagship Snapdragon 888.

Derrek Lee
Managing Editor

Derrek is the managing editor of Android Central, helping to guide the site's editorial content and direction to reach and resonate with readers, old and new, who are just as passionate about tech as we are. He's been obsessed with mobile technology since he was 12, when he discovered the Nokia N90, and his love of flip phones and new form factors continues to this day. As a fitness enthusiast, he has always been curious about the intersection of tech and fitness. When he's not working, he's probably working out.