Qualcomm's Innovations and Growth Projections for 2024
2023-12-30
Qualcomm held its fourth-quarter and fiscal-year 2023 earnings conference call on November 1, 2023, at 4:45 p.m. ET. Mauricio Lopez-Hodoyan, the vice president of investor relations at Qualcomm, led the call. During the call, Qualcomm cautioned that actual events or results could differ from the forward-looking statements made.
In terms of financial performance, Qualcomm reported non-GAAP revenues of $8.7 billion for fiscal Q4, with non-GAAP earnings per share of $2.02. The company's chipset business generated $7.4 billion in revenue during the quarter. Qualcomm has established itself as a leader in on-device Gen AI for smartphones, next-generation laptops, XR, and automotive. They are collaborating with multiple partners and ecosystems to enable consumer and productivity-based AI models running natively on their platform.
Qualcomm's Snapdragon 8 Gen 3 smartphone platform can run large language models like Llama and Baidu, with up to 10 billion parameters at up to 20 tokens per second. The Snapdragon X Elite Platform, designed for the PC market, includes the custom Orion CPU, which exceeds the multi-threaded CPU performance of any x86 or ARM competitor in its class. The platform also features the integrated Adreno GPU, which delivers up to two times faster performance than the competition at ISO power or matches competitor peak PC performance at 74% less power. The Hexagon NPU provides 45 tops of performance and can run Gen AI models with over 13 billion parameters on device. The Snapdragon AR1 platform, developed in collaboration with Meta, powers smart glasses.
Qualcomm's unified data flow management architecture enables the end-to-end management of home networks and real-time optimizations across devices. The company is driving advancements in computing, intelligence, and cloud connectivity in the automotive industry, leading to new user experiences, advancements in driver assistance, autonomy, and safety. Qualcomm's Snapdragon Digital Chassis solutions bring advanced capabilities to vehicles, such as over-the-air updates, digital services, and software-defined features. The upcoming Cadillac Escalade IQ and the new Mercedes-Benz user experience in the 2024 E-Class sedan will be equipped with Snapdragon Cockpit, Snapdragon Alto connectivity, and Snapdragon Ride platforms. Qualcomm's partnership with Amazon Web Services aims to integrate cloud technologies into the vehicle development life cycle, advancing software-defined mobility.
The Snapdragon 8 Gen 3 mobile platform offers intelligent capture with AI-powered camera and console-level gaming with ray tracing. Qualcomm's on-device AI is evolving in parallel to the cloud and will have a significant impact on changing the user experience. Use cases for on-device AI include predicting user behavior and bringing other applications. Qualcomm is collaborating with many OEMs, including Microsoft, Meta, and Android, to develop use cases for on-device AI. The company expects on-device AI to create a new cycle for phones, increase silicon content, impact product mix, and unit sales.
Qualcomm's roadmap includes strengths such as market stabilization, partnerships with companies like Samsung, and improvements in Gen AI processing capabilities. The company sees potential growth in the PC market, particularly in gaming and enterprise use cases. The Snapdragon X Elite is known for its leadership position in mobile computing devices and its strong AI processing capabilities. Qualcomm's relationship with Microsoft has resulted in the development of many applications for the platform. The company has focused on operating discipline while investing in diversification initiatives and expects on-device Gen AI to drive increased dollar content per device.
Qualcomm projects a stabilization in the handset market and expects sequential growth in the December quarter. The company anticipates growth in global handset units and 5G units for the next fiscal year. The average selling price (ASP) of Qualcomm chips has been trending upwards in the past three years. Qualcomm expects the legislative process for the proposed regulations by the European Commission regarding standard essential patents in the European Union to take some number of years. The company has not provided guidance for the full year of fiscal '24 but expects a strong first quarter and an overall positive year.
Qualcomm has seen share increases globally and in China for sell-through in fiscal '23. The company is confident about its relationship with Samsung and expects to retain the majority share in the upcoming launch of the GS 24. Qualcomm has also gained traction from premium and high-tier Chinese OEMs and believes its competitive differentiation is accelerating. Cristiano Amon, the CEO of Qualcomm, expressed gratitude to the employees, suppliers, and partners of Qualcomm. The company aims to transition from a communications company to a connected computer company and expand into new markets.