Qualcomm (QCOM) Rides on Snapdragon Strength, Partnerships – May 28, 2021

With technologies like IoT, Artificial Intelligence (AI) and 5G gaining prominence, tech companies such as Qualcomm Incorporated (QCOM Free Report) are sparing no efforts to elevate their position in the global market. The firms are undertaking rapid innovations despite an acute shortage of chips with the semiconductor supply chain significantly affected by the pandemic.

Markedly, Qualcomm is touted as a global frontrunner in the development and commercialization of fundamental technologies for the wireless industry. The San Diego, CA-based company is benefiting from investments toward building a licensing program in mobile.

Recognized as one of the largest manufacturers of wireless chipset built on baseband technology, Qualcomm is focused on retaining its leadership in 5G and mobile connectivity with several technological achievements and innovative product launches. Its product lineup includes CDMA-based integrated circuits and system software for wireless voice and data communications as well as global positioning system products.

The company also offers development and other product related services to the U.S. government agencies. Notably, it derives majority of revenues from sales of integrated circuit products and licensing of intellectual property, including patents and other rights.

Robust demand for advanced radio frequency front-end solutions used in high-performance 5G devices driven by the ramp-up in 5G-enabled chips act as major tailwinds. Apart from catering to the global smartphone market, it is a well-known name in the automobile industry. Markedly, its first-of-its-kind automotive platform — Snapdragon Ride — enables automakers to convert their vehicles into self-driving cars on the back of AI.

Snapdragon’s scalable platform covers Snapdragon Ride Safety System-on-a-Chip, Accelerator and the Snapdragon Ride Autonomous Stack. The combination of these self-driving algorithms facilitates a robust architecture of hardware and software that supports advanced driver assistance systems.

Also, next-gen 5G telematics design wins with a robust pipeline of $8 billion in automotive designs boost its leading market position in the connected cars segment. This augurs well for its long-term growth prospects. Qualcomm’s partnerships with several auto and telecom companies to incorporate its proprietary Snapdragon chipset across a plethora of devices is a major highlight as well.

Agreements with NIO Inc. (NIO Free Report) , Samsung, Ericsson (ERIC Free Report) , General Motors Company (GM Free Report) , Vodafone and U.S. Cellular not only helped the company to extend its 5G-enabled Snapdragon portfolio but also enable it to effectively address the evolving connectivity requirements of today’s customers, given the rising need for advanced 5G innovations.

Adding to its milestone achievements, Qualcomm’s unit, Qualcomm Technologies, Inc., announced the acquisition of a chip startup, NUVIA, for a stellar valuation of $1.4 billion (excluding working capital and other adjustments). Notably, the deal is expected to not only slash licensing costs but also uplift Qualcomm’s position in the 5G chipset market driven by NUVIA’s expertise in high performance processors for compute-intensive applications and devices.

Moreover, the second-largest semiconductor manufacturer will include NUVIA CPUs in the mobile processors for its Advanced Driver Assistance Systems, flagship smartphones and infotainment systems. This is likely to, very soon, unite mobile and computing architectures while empowering new-age customers with rich applications in the 5G-backed networking market.

With more than 700 5G design announced or in the development phase, the company is well poised to benefit from solid 5G momentum with greater visibility to meet its long-term revenue targets. It is apparently the only chipset vendor with 5G system level solutions spanning both sub-6 and millimeter wave bands and one of the largest radio frequency front end suppliers with design wins across all premium-tier smartphone customers.

It is focused on helping customers experience seamless migration to superfast 5G networks with multi-gigabit connectivity. This is likely to offer the scalability needed for broad 5G adoption through accelerated commercialization by Original Equipment Manufacturers. All these factors bode well and are likely to benefit Qualcomm in the upcoming quarters.

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