MWC 2022: Qualcomm CEO calls for more support for chip companies amid supply chain woes

Cristiano Amon cites US and EU legislation as significant efforts to support production and stabilise supply chains

Cristiano Amon, chief executive of Qualcomm, speaking during the Mobile World Congress in Barcelona. Photo: Reuters

Public and private sector efforts to help ease the supply chain woes plaguing the semiconductor sector are a welcome move as the world economy becomes increasingly connected, according to industry major Qualcomm's chief executive.

The efforts, in particular by the US and EU, should be taken as a springboard for others as demand for chips is expected to boom, Cristiano Amon said at the Mobile World Congress in Barcelona.

"Mobile technology is literally going everywhere ... billions of smart devices are going to be connected to the cloud; if they're not connected, they're not as useful," he said.

Chip demand "is a testimony about how important and essential semiconductors have become for the future of economies in every country and across every industry", he added.

The global semiconductor industry faced its most challenging period last year as a surge in electronic devices sales during the Covid-19 pandemic triggered a bigger-than-anticipated demand, leading to a severe shortage in the industry.

The US-China trade dispute also aggravated the shortage. China's Huawei, for example, is unable to supply semiconductors to its US counterparts after Washington barred American companies from dealing with it.

The chip shortage hit the automotive industry the hardest, according to Gartner.

Low supply and high demand have led to a record year for chipmakers. Revenue in the semiconductor industry rose 25.1 per cent in 2021 to hit $583.5 billion, crossing the $500bn mark for the first time, the research company said in January.

The industry is poised for a big rebound and another milestone this year, with sales pegged to cross $600bn for the first time, driven by "unusually strong" demand for consumer electronics, Euler Hermes, a unit of German financial services firm Allianz, said in January.

Mr Amon said state involvement will significantly help ease supply chain woes. He cited the European Chips Act, a major programme that was introduced by the European Commission in January to make €11bn ($12,21bn) available to industry players to boost R&D, training and production.

Intel, the world's largest semiconductor maker by revenue, in December said it will increase capacity by adding facilities in France and Italy, along with a major production site in Germany.

The Chips for America act, unveiled in June last year, seeks to provide tax credits to chip manufacturers to produce semiconductors in the US. The credits are worth 25 per cent for investments in the production, equipment and construction of the necessary facilities.

The move has already attracted international companies. In November, South Korea's Samsung Electronics said that it planned to build a $17bn semiconductor factory outside Austin, Texas.

Qualcomm is also bolstering its investments in the metaverse, a fast growing technology currently,

"We were investing in this technology when it wasn't popular. We have a decade's worth of investments and we're very happy with the opportunity of connecting physical and digital spaces in front of us," Mr Amon said.

The global metaverse industry was valued at $47.69bn in 2020 and is projected to reach $828.95bn in 2028, growing at a compound annual rate of 43.3 per cent, according to Emergen Research.

Mr Amon announced that it was boosting partnerships to advance its push into the metaverse, including with ByteDance, the parent company of social media platform TikTok, and China's Lenovo, which produces the ThinkReality line of smart glasses.

He further stressed Qualcomm's move into the future of computing by introducing its new FastConnect 7800 chip, which supports the upcoming Wi-Fi 7 protocol and part of its Qualcomm Connect specifications.

Wi-Fi 7 — theoretically more stable than and three times the speed of Wi-Fi 6 — is not yet out in the market, with standards expected to be ratified by 2024.

But this has not stopped network gear makers from manufacturing equipment that support it: Qualcomm has plans to have Wi-Fi 7-capable chips in smartphones by next year, and routers for home consumers by 2025.

"We all know today that our most beloved device is the smartphone ... and it's all about creating a unique experience for premium and high-tier users," Mr Amon said.