Qualcomm may be rebuilding its data center division as it focuses on Edge and 5G as revealed in its Q4 2020 earnings report.
The company has seen annual revenue grow healthily despite Covid-19 restrictions and now plans on investing in Edge and 5G, two areas that will create growth opportunities for the company.
Looking for opportunities
According to the Q4 report, over a billion devices use Qualcomm inference technology for AI; encouraging the company to invest in the data center/Edge, and 5G market. This announcement is a positive change for Qualcomm. In 2018, the company went through the process of laying off most of its data center division.
The company experienced a Q4 non-GAAP revenue of $6.5bn, $200m above estimations, and a net income of $1.67bn. Qualcomm’s subsidiary QCT was responsible for $5bn in revenue amounting to about 38 percent year-on-year growth. Revenue estimations for Q1 2021 lie between $7.8bn and $8.6bn. Qualcomm’s share price has risen by around 7 percent since the announcement.
Steve Mollenkopf, CEO of Qualcomm, said: “Our fiscal fourth-quarter results demonstrate that our investments in 5G are coming to fruition and showing benefits in our licensing and product businesses. We concluded the year with exceptional fourth-quarter results and are well-positioned for growth in 2021 and beyond. As the pace of disruption in wireless technology accelerates, we will continue to drive growth and scale across our RF front-end, Automotive, and IoT adjacencies.”
As a semiconductor company, Qualcomm expects its revenue to be bolstered by the likes of Apple which will sell millions of 5G smartphones for Christmas. The company’s core business is designing, manufacturing, and licensing chips in mobile phones.
The chipmaker also hopes to supply technology to Huawei but it has not received permission from the US government after the government and the Chinese company's relationship soured.