Ryan McLeod / Android Authority
TL;DR
- Qualcomm’s chip gross sales are being affected by the down smartphone market.
- The corporate’s chip gross sales have dropped by 25% yr over yr.
- Qualcomm is getting ready for “workforce reductions.”
It has not been an incredible yr for smartphones. Demand has been down throughout the board for nearly each model, aside from Google. As a direct end result, chip makers are additionally experiencing down gross sales throughout this turbulent time. Qualcomm, the maker of Snapdragon SoCs, is having a very tough time, in keeping with its most up-to-date earnings report.
On August 2, 2023, Qualcomm printed its third-quarter earnings report. The Q3 report exhibits that handset chip gross sales have gone down by 25% yr over yr. The corporate additionally recorded a web earnings lack of 52% yr over yr. And to make issues worse, the steerage for the subsequent quarter got here in decrease than anticipated, which resulted in an 8% inventory drop after the decision, in keeping with Ars Technica.
Exterior of the low demand for smartphones, such a decline in gross sales is shocking to see. Particularly, on condition that Samsung and Qualcomm signed a deal to place Qualcomm’s chips in all of its Galaxy S23 telephones. You’d assume gross sales can be up after making a deal like that.
The severity of the losses is such that Qualcomm feels it’s compelled to take cost-cutting measures. Sadly, it appears to be like like these cost-cutting measures will take the type of layoffs. As acknowledged within the report:
Given the continued uncertainty within the macroeconomic and demand surroundings, we count on to take further restructuring actions. Whereas we’re within the technique of creating our plans, we presently count on these actions to consist largely of workforce reductions, and in reference to any such actions we might count on to incur important further restructuring prices, a considerable portion of which we count on to incur within the fourth quarter of fiscal 2023. We presently anticipate these further actions to be considerably accomplished within the first half of fiscal 2024.
Qualcomm is anticipated to launch the Snapdragon 8 Gen 3 in late October. With the smartphone market not wanting prepared for a comeback anytime quickly, issues aren’t wanting nice for the time being for Qualcomm.
