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Qualcomm, European Allies Ink Joint Venture

CHIPS: Partners in New German Company Focus on RISC-V Technology

Chipmaker Qualcomm Inc. (NASDAQ: QCOM) is joining four European semiconductor industry players to create a company that will focus on a technology known as RISC-V (pronounced “risk five”). The new business will be based in Germany and does not yet have a name.

Qualcomm’s partners in the endeavor are Robert Bosch GmbH, Infineon Technologies AG (OTCQX: IFNNY), Nordic Semiconductor (OTC: NDCVF) and NXP Semiconductors (NASDAQ: NXPI). Qualcomm announced the move early this month (Aug. 4). Financial details of the partnership were not disclosed.

The partners said they want to drive the RISC-V ecosystem and enable next-generation hardware development. Their initial focus will be the automotive space. Eventually the partners plan to expand to mobile devices and the internet of things.

“The company will be a single source to enable compatible RISC-V based products, provide reference architectures, and help establish solutions widely used in the industry,” the joint announcement said.

RISC – short for reduced instruction set computer – also has applications in high-performance computing, data centers, aerospace and more. The move is seen as an attempt to reduce the companies’ dependence on licensed technology from Arm, according to an account in Network World.

Qualcomm is one of Arm’s biggest customers, according to Ars Technica, which characterized RISC-V as a competitive threat to Arm.

BCC Research estimated the market for RISC-V technology was $445.7 million in 2021. That market is forecast to reach $2.7 billion by 2027, with a compound annual growth rate of 33.1%.

(Arm, based in the United Kingdom and owned by SoftBank Group, is making headlines of a different sort: Arm announced plans for an IPO, perhaps in early September. The corporation could raise between $8 billion and $10 billion, according to published reports.)

A Common Language

The RISC-V instruction set was originally developed at UC Berkeley “as a CPU lingua franca for computer chips; an architecture used by all chipmakers but owned by none,” wrote

Ziad Asghar
Senior Vice President of Product Management
Qualcomm Technologies Inc.

Nigel Charig in a post to the Power & Beyond website, published by Mesago Messe Frankfurt GmbH.

“We are excited to come together with other industry players to drive the expansion of the RISC-V ecosystem through development of next-generation hardware,” said Ziad Asghar, senior vice president of product management at Qualcomm Technologies Inc., in a statement distributed by the companies. “Qualcomm Technologies has been investing in RISC-V for more than five years and we’ve integrated RISC-V micro-controllers into many of our commercial platforms. We believe RISC-V’s open-source instruction set will increase innovation and has the potential to transform the industry.”

Third Quarter Earnings

Earlier this month (Aug. 2) Qualcomm reported earnings for its third quarter, which ended June 25.

The business reported net income of $1.8 billion, or $1.60 per diluted share, on revenue of $8.45 billion.

Excluding items, Qualcomm reported earnings of $1.87 per share. That was slightly better than an analyst consensus of $1.81 per share.

In the current quarter, the business said it expected revenue in the range of $8.1 billion to $8.9 billion and diluted earnings per share in the range of $1.37 to $1.57, when calculated using Generally Accepted Accounting Principles (GAAP). Non-GAAP diluted earnings per share is expected to be $1.80 to $2.00.

Cristiano Amon
CEO
Qualcomm Technologies, Inc.

Shares of QCOM closed at $129.27 on Aug. 2; Qualcomm announced its earnings after the market closed. Shares opened Aug. 3 at $116.97 and closed the day at $118.70, down 8% from the previous day’s close.

Qualcomm shares closed at $111.68 on Aug. 15. Over 52 weeks, shares have traded between $101.47 and $152.91.

In its Aug. 2 announcement, Qualcomm boasted 11 straight quarters of year-over-year double digit percentage growth in revenue in the automotive space.

“On-device AI has the potential to drive an inflection point across all our products,” said CEO Cristiano Amon.

Qualcomm Inc.

FOUNDED: 1985
CEO: Cristiano Amon
HEADQUARTERS: Sorrento Mesa, San Diego
BUSINESS: Fabless semiconductor maker, specialist in developing and commercializing foundational technologies for the wireless industry
REVENUE: $44.2 billion (2022)
STOCK: QCOM (NASDAQ)
EMPLOYEES: 51,000 (2022)
WEBSITE: qualcomm.com
NOTABLE: Qualcomm grew from the vision of several UC San Diego professors.

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