Qualcomm Targets $40 Billion in Non-Handset Revenue by 2029
Qualcomm CEO Cristiano Amon argues that memory shortages and higher prices—not weaker consumer demand—are depressing handset volumes and margins, while Apple’s faster move away from Qualcomm adds to the near-term pressure. He says the company’s growth case is increasingly tied to automotive, industrial AI and data centers, with non-handset businesses projected to generate $40 billion in revenue by fiscal 2029 and make up about two-thirds of the company’s sales.
Qualcomm expects its growth engine to move beyond handsets
? cristiano-amon is positioning Qualcomm’s next phase around a substantial change in revenue mix. Handsets remain the majority of the business today, but the company projects that non-handset businesses will account for just under half of revenue in fiscal 2027. By fiscal 2029, Qualcomm expects handsets to represent roughly one-third.
The target is $40 billion in non-handset revenue in fiscal 2029, spanning automotive, data centers and IoT. From fiscal 2026 to fiscal 2027, Amon expects those businesses collectively to grow 60%. He characterizes that mix as a source of more durable revenue and earnings than handsets, with less exposure to the cyclical swings of the phone market.
Automotive is the immediate driver. Qualcomm’s fiscal-2027 automotive revenue exit rate is now expected to be about $1 billion higher than the company had previously anticipated, Amon says. He attributes the acceleration to a strengthening position in assisted-driving and autonomy silicon, as well as the wider automotive stack.
Industrial IoT is another part of the case. Amon points to open-weight models and AI running at the edge as sources of industrial demand. In the current fiscal year, he says, Qualcomm has accumulated a $3.5 billion design-win pipeline in industrial AI.
You're going to see a 60% year-over-year increase on all of those new business. Durable revenue, durable earnings, doesn't have the cyclical things on handsets.
The data-center ramp begins with custom chips
The near-term data-center ramp is predominantly a custom-ASIC business. ? cristiano-amon says Qualcomm still expects $5 billion in data-center revenue in fiscal 2027, with the majority coming from custom ASICs for two hyperscalers. One customer is in the United States and the other is in China, though he did not identify either company.
That initial revenue is one component of the more than $15 billion data-center opportunity Qualcomm has outlined through fiscal 2029. Amon describes the longer-term opportunity as broadly balanced among custom ASICs, CPUs, accelerators and high-bandwidth compute. He says the CPU business will begin ramping in 2028, while accelerators and high-bandwidth compute will also appear in some custom-ASIC deployments.
Amon says bespoke development is to be expected for a new entrant serving hyperscalers. Qualcomm expects to have silicon for its high-bandwidth-compute product available for performance evaluation within a couple of quarters. He expects that process to create additional interest in the broader data-center portfolio.
China will be meaningful but not exceptional within the plan. Qualcomm expects China’s share of its data-center revenue to resemble the proportional exposure of other semiconductor suppliers already operating in the market, Amon says.
Software is part of Qualcomm’s data-center strategy through its acquisition of Modular. Material shown from Modular’s website describes its offering as “Inference reimagined, from Kernel to Cloud” and “One unified stack,” alongside “Fast inference, deployed your way.” Amon describes Modular as an open AI platform intended to scale from edge to cloud, and says Qualcomm plans to offer that platform to the wider industry, including other semiconductor companies.
The good thing about all this Ed, nobody asked me anymore about I'm worried about your software capabilities in the data center.
Memory supply is suppressing the handset business
? cristiano-amon attributes Qualcomm’s immediate handset pressure to exceptional memory prices and shortages, not weaker consumer demand for phones. Qualcomm projects the handset market will decline about 20% from 2026 to 2027 because constrained supply and elevated memory prices are reducing unit volumes.
The impact is most pronounced in the middle and lower tiers, where higher device prices have materially contracted demand. Premium phones have been more resilient, but consumers there are changing what they buy: rather than purchasing the newest flagship, Amon says, they are selecting last year’s device or entry-premium models. That shift affects Qualcomm’s handset mix even when buyers remain in premium categories.
Apple’s transition away from Qualcomm is a separate, company-specific factor. Amon says Apple is coming off the model faster than expected, with the supply situation accelerating the change. Together, the market contraction, product-mix shift and Apple transition have weighed on Qualcomm’s handset outlook.
Qualcomm has identified about $1.50 in earnings power that Amon expects to return when handset conditions normalize. In his account, normalization depends on memory supply becoming more available and prices becoming more workable—not on a revival of underlying consumer willingness to buy phones.
The overall market is down. It's not a demand issue. It's memory prices and supply.
The supply constraint also affects gross margin. Input costs have risen while the semiconductor industry operates at full capacity, Amon says. Qualcomm can adjust its own prices, but existing contracts and product-design cycles mean the price response trails cost increases by quarters. That timing mismatch has placed gross margin slightly below the company’s operating model; Amon expects it to return as new pricing flows through handset products.
Qualcomm still regards China Android as having reached its bottom in the fiscal third quarter. Amon expects sequential growth there, even as the broader handset market remains suppressed by memory prices and supply limitations.