Qualcomm, analysts hint at chip recovery

Chip giant Qualcomm says it is seeing a pickup in chip demand. Separately, two chip industry research firms say graphics chips shipments rose in the first quarter.

Chip giant Qualcomm said that it is seeing a pickup in chip demand. Separately, two chip industry research firms said graphics chips shipments rose in the first quarter.

Qualcomm indicated on Monday that it is encouraged by demand. "We're feeling more comfortable looking forward...We're happy to see chip demand up," CEO Paul Jacobs said during the company's second-quarter earnings conference call. "We're happy to see inventories stabilizing, reaffirming the device demand, we have very strong operating cash flows," he added.

The world's largest maker of cell phone chips had revenue of $2.46 billion, down from the $2.61 billion posted in the same quarter last year, and posted an operating loss of $10 million, reflecting a $748 million charge for litigation settlement related to the settlement and patent agreement with Broadcom.

The sentiment expressed by Qualcomm's CEO adds weight to comments made by Intel earlier this month in its first-quarter earnings conference call. "I believe the worst is now behind us from an inventory correction and demand-level adjustment perspective," Intel CEO Paul Otellini said on April 14.

Reports from market research firms were also positive. On Tuesday, Jon Peddie Research, which tracks the graphics chip market, said shipments were up 3.3 percent from the fourth quarter, "breaking an eight-year seasonal trend that dictated negative sales from Q4 to Q1."

Peddie attributed this, however, to going from nothing to something. "In Q3 and Q4 of 2008 the channel stopped ordering GPUs (graphics processing units) and depleted inventory in anticipation of a long drawn out worldwide recession. But, no recession, no matter how severe, results in zero sales. The world continued to turn and the consumers continued to buy, albeit they bought less," Peddie said in a prepared statement.

Also on Tuesday, Nvidia released information from Mercury Research, another firm that follows chip markets, which said overall graphics chip shipments were up 3.8 percent from the fourth quarter of 2008. The uptick was attributed to improved desktop sales.

Peddie added this cautionary statement. "Things probably aren't going to get back to the normal seasonality till Q3 this year, and we won't hit the levels of 2008 until 2010."

About the author

Brooke Crothers writes about mobile computer systems, including laptops, tablets, smartphones: how they define the computing experience and the hardware that makes them tick. He has served as an editor at large at CNET News and a contributing reporter to The New York Times' Bits and Technology sections. His interest in things small began when living in Tokyo in a very small apartment for a very long time.

 

ARTICLE DISCUSSION

Conversation powered by Livefyre

Don't Miss
Hot Products
Trending on CNET

Hot on CNET

CNET's giving away a 3D printer

Enter for a chance to win* the Makerbot Replicator 3D Printer and all the supplies you need to get started.