Qualcomm reports strong growth in automotive business amid trade tensions

Qualcomm, a major player in the semiconductor industry, announced its fiscal second-quarter earnings on April 30, 2025. This report highlighted significant revenue growth driven by increased demand for chipsets, particularly from high-end Android devices manufactured by Chinese companies. During the last fiscal year, Qualcomm generated nearly 46% of its total revenue from China, raising concerns about its exposure to the ongoing trade tensions and tariffs affecting trade with China and other partners. Despite these challenges, Qualcomm reported that overall handset chip sales rose 12% compared to the previous year, amounting to $6.93 billion. Under the leadership of CEO Cristiano Amon, the company has broadened its focus beyond smartphones, aiming to expand into automotive and Internet of Things (IoT) markets. Qualcomm's automotive business saw remarkable growth, increasing 59% annually to reach $959 million in sales. Additionally, the IoT division experienced a 27% rise in revenue, totaling $1.58 billion. This diversification is critical for Qualcomm, particularly as the company anticipates losing Apple as a customer in the coming years. The company's chip sales, encapsulated under the QCT (Qualcomm CDMA Technologies) segment, generated a total of $9.47 billion during the quarter, reflecting an 18% year-over-year increase. Conversely, the QTL (Qualcomm Technology Licensing) division's revenue remained flat at $1.32 billion. Qualcomm's operational profitability remained strong, with $41 billion in revenue over the last twelve months and approximately $11 billion in operating profits. Investors and market analysts are paying close attention to Qualcomm's revenue forecast, especially given the external factors at play in the macroeconomic landscape. Although the company exceeded Wall Street's earnings expectations, its revenue forecast for the current quarter fell slightly short, which contributed to a decline in shares during after-hours trading. As Qualcomm navigates these complexities, it is expected to continue addressing the challenges posed by its reliance on certain markets and adapting its strategy to mitigate risks associated with external economic factors.