By Li Panpan

(JW Insights) Nov 2 -- US chip giant Qualcomm expects revenue from Chinese phone makers to jump 35% in the current period from the preceding three months with most excess inventory cleared out, said the company on November 2 in a statement, reported Bloomberg.

Qualcomm gave a better-than-expected revenue forecast for the current quarter, indicating that the mobile phone industry's inventory glut may finally be receding.

Sales will be $9.1 billion to $9.9 billion in the fiscal first quarter from October to December. The midpoint of that range -- $9.5 billion -- was well ahead of the average analyst estimate of $9.26 billion, said the company.

The statement offers a glimmer of hope that consumers are finally beginning to upgrade their phones again. Many shoppers -- especially in China -- have been holding on to existing models for longer than in the past, hurting demand for Qualcomm's chips. A rebound would buoy the company's main source of revenue.

For now, phone demand remains slow. Handset shipments will decrease by a percentage in the mid-to-high single digits this year compared with 2022, “which is an improvement from what we had before,” Chief Financial Officer Akash Palkhiwala said on a conference call with analysts.

In the fiscal fourth quarter, which ended September 24, revenue declined 24% to $8.63 billion. Handset-related sales were down 27% to $5.46 billion. Chips for internet-connected devices slid 31% to $1.38 billion, while automotive sales jumped 15% to $535 million, reported Bloomberg.

For the current period, Qualcomm is projecting sales of $7.7 billion to $8.3 billion for its chip business. That's ahead of the $7.8 billion average estimate.

As promised, Qualcomm has reduced its workforce to cut expenses but hasn't commented on the overall size of the reductions to its 50,000-member workforce, according to the Bloomberg report.