Despite Successful Q4 and FY 2022, Qualcomm Expects Lower Sales in 2023

Despite Successful Q4 and FY 2022, Qualcomm Expects Lower Sales in 2023
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Qualcomm finished the financial year 2022 with a rise in revenue and income in the last quarter and the entire year. The chipmaker, however, is not too optimistic about the upcoming period.

In the fourth quarter of the financial year 2022, Qualcomm saw a 22% rise in revenue to $11.4 billion as the net income grew 3% to $2.8 billion. The full-year 2022 results are even better with a 32% rise in revenue ($44.2 billion) and a 43% jump in net income ($12.9 billion).

“We are pleased to report another strong year, despite the macroeconomic challenges, as we continue to execute our strategy of transforming Qualcomm from a wireless communications company for the mobile industry to a connected processor company for the intelligent edge,“ said Cristiano Amon, President, and CEO of Qualcomm.

The perspective the company gave is not so bright. The outlook for the next quarter is gloomy as Qualcomm is warning of a slump in sales to smartphone customers due to an uncertain economic environment and reduced demand. In updated guidance, Qualcomm forecasted 3G, 4G, and 5G handset volumes would hit a low double-digit percentage decline, from a previously-expected mid-single-digit drop in the calendar year 2022.

Alongside the macroeconomic environment and rapid deterioration in demand, the company explained the easing of supply constraints across the semiconductor industry has resulted in elevated channel inventory. In effect, Qualcomm said its customers were now drawing down their inventory. The company estimates about eight-to-ten weeks’ worth of build-up which could take a few quarters to stabilize. As a result, Qualcomm expects the next quarter could be the bottom, with regards to inventory, as manufacturers use up their existing chips.