Ruminations on the electronics industry from David Manners, Senior Components Editor on Electronics Weekly.
The World’s Most Valuable Chip Company
Financial analysts are frightfully polite to execs but brutal in their judgments.
A bit like what you say to people at the party and what you say about them on the way home.
The analysts now rate Qualcomm as a more valuable company than Intel despite Intel having revenue of $50 billion and Qualcomm having revenue of $20 billion.
Yesterday the market cap of Intel was $105 billion, while the market cap of Qualcomm was $106 billion.
The reason, of course, is expectation. Everyone knows the future is mobile. Qualcomm is the best in mobile; Intel, despite talking a good race, is an also-ran.
Meanwhile financial strength is draining from Intel; growing at Qualcomm.
Qualcomm has $27 billion cash, up from $21 billion this time last year, and no debt; while Intel has $10 billion of cash, down from $20 billion at the end of 2010, and $7 billion of debt.
Intel, of course, has to build fabs at $5 billion a pop leaving Qualcomm to spend its cash on producing better mobile chip-sets.
So you can see why the analyst chappies have placed their bets and have crowned Qualcomm the world’s most valuable chip company.Tags: chip sets, expectation, financial analysts, Intel, judgments