The launch of domestic 5G mobile phones has a far-reaching impact that is jaw-dropping, that is, Qualcomm plans to withdraw from China, and the Shanghai R&D department lays off a large area, but industry rumors say that although Qualcomm withdraws, it gives employees high severance compensation, compensation up to N+7, and there will be no length of service and compensation restrictions.
The release of domestic 5G mobile phones, resulting in Qualcomm's direct loss is nearly 60 million chip orders, after it obtained an exclusive license to supply 4G chips to a Chinese mobile phone company, thereby monopolizing the mobile phone company's annual orders for nearly 60 million 4G chips, providing it with huge income and effectively resisting MediaTek's attack.
Since 2020, Qualcomm has lost its position as the global mobile phone chip leader for more than 10 years, and the exclusive supply of 4G chips for the Chinese mobile phone company has partially made up for the losses caused by its erosion by MediaTek in the mobile phone chip market, slowing down its decline in the mobile phone chip market, but now all this has been lost.
Another pressure brought to Qualcomm is due to the loss of buffer, Qualcomm was well-known Apple analyst Guo Mingqi pointed out that it will reduce prices in the fourth quarter of this year to deal with competition, to ensure market share, so that it is under more pressure, in order to cope with competitive pressure only to reduce costs, layoffs have become one of its countermeasures.
The pressure felt by Qualcomm has actually appeared in the second quarter of this year, the second quarter of the performance shows that Qualcomm's performance has declined, and in the second quarter of the domestic mobile phone brand's shipments increased by 70%, at that time it was still using Qualcomm's 4G chips, the growth of chip shipments failed to bring more profits to Qualcomm, which means that Qualcomm's orders that may be obtained in other Chinese mobile phone companies have declined.
Qualcomm may completely close the Shanghai research and development department, but this does not mean that Qualcomm will leave the Chinese market, after all, a large part of its mobile phone chip market is still provided by Chinese mobile phones, Chinese mobile phones account for nearly half of the global mobile phone market, in addition to the only Chinese mobile phone company self-developed mobile phone chips, other Chinese mobile phone companies to purchase chips.
Among the world's top five mobile phone companies, only Apple's self-developed mobile phone processor, Samsung is also reducing self-developed chips, the other three are Chinese mobile phone companies, and the top five Chinese mobile phone companies need to purchase mobile phone chips from Qualcomm or MediaTek, so important, of course, Qualcomm will not give up easily.
For Qualcomm, it is trying to expand XR, automotive chips and other industries, and has made significant progress in the automotive chip industry, in the past two years, Chinese auto companies have launched cars are proud of the use of Qualcomm high-end chips, must talk about which chip used Qualcomm, automotive chips have become Qualcomm's fastest growing business, Qualcomm will not easily give up the Chinese automotive market.
Perhaps it is precisely these influences that Qualcomm gave high compensation when it laid off employees in a large way, and N+7 compensation was quite rare among the compensation provided by many foreign-funded companies to close their businesses, and Qualcomm may have done so in the hope of leaving a good impression on Chinese consumers.
In the face of the revival of China's mobile phone chips, not only Qualcomm is worried about the future, the US chip industry is generally worried that the increase in China's chip self-sufficiency rate will lead to a decline in their performance, it is the worry of losing more markets, the three giants of American chips have gone to Washington to meet with Biden, hoping to relax the export restrictions on Chinese chips, otherwise it will accelerate the development of Chinese chips, and American chips suffer greater losses.