Chipmaker Qorvo tumbles as Android-makers turn to cheaper chips

Shares of Qorvo were down more than 23% in early trading Wednesday, after the chipmaker warned of an industry-wide shift from its more advanced chips to lower-tier alternatives in its latest earnings.

Qorvo makes tiny computer chips for wireless devices like smartphones, iPads, and Apple Watches, in particular to support 5G deployment. Customers in the Android 5G market, however, have recently shifted to using lower-tier chips, a market that Qorvo does not participate in. That could result in Qorvo losing between 20% to 30% of a $1 billion market, the company said.

“While the flagship and premium tiers are holding up well, the mix in the mid- and entry tiers has shifted towards entry-tier 5G at the expense of mid-tier 5G,” Qorvo CEO Robert Bruggeworth said during an earnings call. The trend, which is not expected to reverse, will negatively impact Qorvo’s 2025 revenue and margins. 

The company forecasted adjusted earnings for the next quarter to be between $1.10 and $1.30, while analysts projected $1.39. 

Despite this bleak market output, Qorvo was able to beat Wall Street expectations in its latest quarter. The company reported earnings per share of $1.88 on $1.05 billion sales, above analysts’ estimates for EPS of $1.85 on sales of $1.03 billion.