WSi reports: Qualcomm unit will help Chinese phone makers sell abroad

According to report in The Wall Street Journal, a dedicated unit by Qualcomm will help Chinese smartphone manufacturers sell their hardware overseas. The chipmaker recently settled a massiveantitrust investigation in China by paying a fine of $975 million.

The move is part of Qualcomm’s efforts to strengthen its relationships with manufacturers in China. A company executive told WSJ that the San Diego-based maker of the popular Snapdragon chipsets has set up a globalization office in Shenzhen, which will help local companies touch base with markets abroad.

As a result of the antitrust settlement, Qualcomm will reduce the royalties it collects from manufacturers in China and be more transparent about its local business ventures. The tech giant will also start a $150 million fund that will invest in local startups.

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Qualcomm cuts outlook for fiscal 2015, blames Samsung

Qualcomm has again cut its revenue forecast for fiscal 2015, with the company now expecting a revenue of between $25 billion and $27 billion, compared to $26.3 - $28 billion it was expecting earlier. The chipmaker has also cut its earnings outlook for the year.

The warning comes from the company's report on its fiscal second quarter, which saw a 45% decline in its year-on-year earnings.

"While we remain confident in the significant growth opportunities ahead, we are reducing our QCT outlook for fiscal 2015, primarily due to the increased impact of customer share shifts within the premium tier and a decline in our share at a large customer," said CEO Steve Mollenkopf.

No points for guessing that Mollenkopf was referring to Samsung, which ditched Qualcomm's Snapdragon 810 chipset in favor of its own Exynos 7420 for both new Galaxy models, the S6 and S6 Edge.

Mollenkopf also announced that the company will look at ways to cut costs. "In addition to our ongoing expense management initiatives, we have initiated a comprehensive review of our cost structure to identify opportunities to improve operating margins while at the same time extending our technology and product leadership positions," he said.

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Qualcomm may tap Samsung foundries for Snapdragon 820

Samsung has an advantage in chip making and it's starting to snowball – now even Qualcomm may switch to Samsung's foundries to manufacture the upcoming Snapdragon 820 chipset. The current 810 is built by TSMC (which also produced previous Snapdragons), but it has been underperforming.

Qualcomm rushed to add 64-bit capability to its chipsets, which led it to use the standard ARM Cortex cores instead of the next generation custom chips – those just weren’t ready. Still, Samsung is using the same Cortex-A53 and A57 in its Exynos chipset and it's getting better results, thanks to the 14nm manufacturing process compared to TSMC's 20nm.

Snapdragon 820 will mark the return to custom Qualcomm cores, sporting the 64-bit ARMv8 instruction set, those are dubbed Kryo and are expected to power flagships in 2016. Even if the company manages to make cooler-running cores than the ARM designs, it still wants the advantage of the smaller manufacturing process.

Qualcomm also wants back into Galaxy flagships – those sell tens of millions, but Samsung will need convincing to switch away from the Exynos, which reportedly saves on licensing fees. Exynos uses an external modem though, which is pricier than having it integrated into the chipset like Snapdragon designs.

Neither Samsung nor Qualcomm have officially confirmed the move yet, but this cant' be good news for TSMC. Apple will also turn to Samsung for the A9 chipset for the next-generation of iGadgets.

Source | Via