Among many American chip companies, Qualcomm was the first to launch custom chips for the Chinese market, but now it has also reached the edge of a cliff. In the second quarter, its revenue fell by 23%, and its net profit was cut in half. Smash yourself in the foot.
Qualcomm's second-quarter results showed that its revenue was only US$8.4 billion, a year-on-year decrease of 23%, and its net profit was only US$800 million, a year-on-year decrease of 52%. One of the reasons for the sharp drop in revenue is that Chinese mobile phones have gradually abandoned Qualcomm's chips.
Qualcomm was the global leader in mobile phone chips for more than ten years. At that time, Qualcomm was quite popular. Every time it released a chip, it was enthusiastically sought after by Chinese mobile phones, and even Chinese mobile phones actively helped it promote it. Domestic consumers can’t complain about Qualcomm. Chip, otherwise there will often be domestic mobile phone brands warning bloggers, the heart of these domestic mobile phones to support the master is admirable.
However, since 2019, the United States has brazenly taken measures against a Chinese mobile phone company. Chinese mobile phones have felt the danger-too much reliance on American chips may lead to chip supply security issues. Use proportions.
In 2020, MediaTek surpassed Qualcomm in one fell swoop to become the world's largest mobile phone chip company. Since then, Qualcomm has only been ranked second in the mobile phone chip industry. The previous year's second-old MediaTek has been rubbing Qualcomm on the ground. Such a result I am afraid that Qualcomm did not expect it, let alone the tragic situation that has led to a sharp drop in performance and repeated layoffs.
After Qualcomm suffered a severe setback, Qualcomm finally realized that the support of Chinese companies is the key to its prosperity. Therefore, after the United States took measures against Chinese companies, Qualcomm immediately obtained a license to customize 4G chips for this Chinese mobile phone company. It once helped it stabilize its performance. However, with the continuous improvement of the performance of MediaTek chips this year, Qualcomm no longer has a technological advantage.
Qualcomm's dilemma can be said to be the epitome of the US chip industry. Since the United States has continued to increase chip restrictions, the good days of the US chip industry have come to an end. All economies in the world are reducing the use of US chips, resulting in rising inventories of US chips. U.S. chip performance cuts abound. Since the end of 2022, many U.S. chip companies have laid off more than 300,000 employees.
At this time, the U.S. chip industry fully realized the importance of the Chinese market. After Qualcomm customized chips for the Chinese market, NVIDIA, Intel, etc. all customized chips for the Chinese market to ensure that they continued to obtain income from the Chinese market; U.S. chip companies that have taken measures have suffered countermeasures. In the first quarter of this year, their revenue was only US$4 billion and their losses were as high as US$2.3 billion.
Faced with the dilemma of the U.S. chip industry, Biden did not reflect on it. On the contrary, he intends to further restrict the U.S. chip industry’s supply of chips to China. This directly triggered the rebound of the three U.S. chip giants Intel, NVIDIA, and Qualcomm. If you don't sell Xin to China, who else can you sell it to? Intel even threatened to suspend the construction of a $100 billion chip factory in Ohio if it cannot sell chips to China.
The predicament encountered by Qualcomm has inspired the US chip industry, making them feel the haze of death and cold teeth. Losing the Chinese market will be an unbearable burden for them. They are actively seeking to resume cooperation with China. Intel recently established a technology innovation center in Shenzhen. Good China, I hope to sell more chips in the Chinese market. The CEO of Intel said that whether its performance can be improved will depend on whether the purchase volume in the Chinese market can increase.