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Qualcomm unseats TI as top mobile chip supplier

Posted: 27 Jul 2007 ?? ?Print Version ?Bookmark and Share

Keywords:mobile chip? top supplier? TI chip?

Despite its much-publicized legal debacles, Qualcomm has steered ahead of Texas Instruments (TI) as the world's leading supplier of ICs for mobile devices, according to market research firm iSuppli.

This reshuffling marks the end of, or at least a pause in, TI's long reign at the top of the mobile semiconductor market. iSuppli senior analyst Francis Sideco, said Q1 "marks the first time that TI has not occupied the leadership position in this area since iSuppli began tracking handset market share in 2004."

High-speed EV-DO market
Despite facing a ban on U.S. imports of devices containing certain of its chips, Qualcomm has been enjoying steady sales growth over the last year as advanced handsets using its 3G technology for CDMA networks make their way into the market. Qualcomm's Q1 supremacy, said Sideco, came largely as a result of its dominance of the market for devices with high-speed EV-DO connectivity, a market in which TI doesn't sell products.

TI suffered another blow on Monday when it reported a lower quarterly profit and offered a disappointing revenue forecast for Q3. Qualcomm, on the other hand, is expected to display healthy earnings growth when it reports its quarterly results tomorrow.

Legal troubles
The U.S. International Trade Commission (ITC) last month banned the import or sale of phones with certain Qualcomm chips that were found to infringe a patent held by rival chipmaker Broadcom. The ban includes new phone models that weren't already being imported by June 7.

Saying that it didn't have jurisdiction in the case, the U.S. Court of Appeals for the Federal Circuit last week declined to strike down the ITC ruling; Qualcomm executives hope that the Bush administration will veto the import limits. A final decision is expected next week.

Qualcomm also is locked in a legal struggle with Nokia over patents for W-CDMA networks, which are generally used for the European-developed GSM networks. Qualcomm has said it expects to spend $200 million on litigation and other legal costs this yeara cost executives say they're willing to shoulder.

So far, apparently, the cost has been worth it. Sideco of iSuppli doesn't expect the ongoing legal battles to affect Qualcomm sales in the near term. "They are definitely positioned to continue their momentum," he said.

Qualcomm enjoyed a 2.4 percent increase in revenue in the first quarter from sales of wireless ICs, to $1.26 billion from $1.23 billion in Q4 of 2006. TI, on the other hand, saw its revenue from mobile chipsets drop from $1.24 billion to $1.15 billion in Q1, a 7.1 percent decline in revenue.

- Richard Martin

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