Qualcomm expects better-than-anticipated chipset orders

Qualcomm stock was up almost 7% this morning on news that the company expects to ship about 20 million CDMA phone chipsets during the fourth quarter of fiscal 2002, including 15 million cdma2000 phone chipsets. Analysts had expected Qualcomm to ship about 18 million chipsets overall. Investors took the news as a sign that demand for mobile phones is rebounding worldwide.

“We’re seeing strong order input from our customers with particular strength in demand for 3G cdma2000 1X chips as well as increasing demand for chips destined for the growing China market,” Dr. Irwin Jacobs, chairman and CEO of Qualcomm, said in a statement.

Qualcomm said it also expects to see more than 20 million chipsets shipped during the last three months of the year.

UBS Warburg, however wasn’t moved by the pre-announcement. “Given the risk of missed expectations and/or a future chipset inventory correction, we cannot recommend investors add to positions at this time,” the company said in a research note.

UBS Warburg believes Qualcomm is relying on a significant upturn in the U.S. CDMA upgrade market to drive volumes of CDMA 1X chipsets and justify higher orders for the last three months of the year. Motorola is also in the process of ramping up CDMA 1X handset volumes in the December and March quarters, said the firm.