Qualcomm Inc.
(
QCOM
), one of the leading manufacturers of smartphone chipsets, has
incorporated two more Snapdragon S4 processors - MSM8225Q and
MSM8625Q - which are expected to be sent as samples to the
customers by the year end and to be shipped from the first quarter
of 2013 onwards.
The 28 nm Snapdragon S4 group of processors is mainly used in
high-end smartphones and tablets as they support LTE technology,
better graphics and enhanced battery life. Hence, additions of two
new 45 nm S4 processors, belonging to Snapdragon S4 Play tier will
not only provide faster clock speed but will also add more
varieties to its chipset range as these processors can be
integrated with low-end smartphones, hence enhancing its low-end
market base in due course.
Both the processors are capable of providing dual-core and
quad-core CPUs to the smartphone manufacturers along with dual-sim
support, thereby enhancing the performance of the handset in terms
of faster network speed and better viewing of HD videos. Moreover,
these processors also support Wi-Fi, Bluetooth 4.0 and FM
connectivity using the Qualcomm Atheros AR6005 and WCN2243
chips.
Qualcomm will also launch a single platform - the Snapdragon S4
Plus MSM8930, which supports UMTS, CDMA and TD-SCDMA technology for
different Chinese telecom carriers. Additionally, this single
platform will also support LTE-TDD and TD-SCDMA standard, catering
to mid-tier smartphone segments in China.
Despite such continuous rise in demand for S4 processors, we are
apprehensive on Qualcomm's supply side constrain, as the world's
largest chipset developer is struggling to meet the huge demand for
S4 processors. Moreover, more than 400 smartphones and tablets to
be launched in the forthcoming months will be using Qualcomm's
Snapdragon processors, out of which more than 150 will be using the
dual-core S4 chips, thereby propelling further demand for S4
chipsets.
To avoid such supply constrain, the company has already teamed
up with
Taiwan Semiconductor Manufacturing Company Ltd.
(
TSM
) and few other third party chipset manufacturers to accelerate the
supply of chipsets. However, the recent launch of
Apple Inc
'.s (
AAPL
) new LTE-based iPhone 5 may further add to Qualcomm's chipset
woes.
We maintain our long-term Neutral recommendation for Qualcomm
Inc. Currently, it has a Zacks #2 Rank, implying a short-term Buy
rating on the stock.
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