By Paul Sandle
LONDON Feb 5 British microchip maker Wolfson
Microelectronics swung to an underlying loss in the
final quarter of 2013 after it struggled against Qualcomm's
dominance in 4G mobile phone technology.
The Edinburgh-based company that specialises in audio
technology is a supplier for the 3G version of Samsung's
Galaxy S4 smartphone but its chips were not in the
4G model of the top-selling handset.
Chief Executive Mike Hickey said the company paid the price
for a "faster than anticipated transition from 3G to 4G
smartphones that benefited a competitor".
He acknowledged that Qualcomm is the dominant provider of
processing technology for first-generation 4G phones, but
expects Wolfson to catch up as more platforms compatible with
its chip technology enter the market.
"There are a lot of other silicon providers, such as Samsung
LSI, Broadcom, Intel and Nvidia, all
bringing to market alternative LTE (4G) platforms, and we are
the natural choice for our customers with those platforms,"
Wolfson posted an underlying operating loss of $4.5 million
for the final quarter of 2013, against a profit of $1.5 million
for the same period a year earlier, on revenue that dipped to
$42 million from $56.1 million.
Hickey said he expects the company to resume its growth
trajectory in the second half of 2014 as customers, including
Chinese smartphone makers, launch new products using Wolfson's
technology and as new LTE platforms come to market.
Shares in Wolfson fell to a two-year low of 109 pence after
the results, which analysts said were slightly worse than
expected. They were trading down 9 percent at 120 pence by 1147
The outlook for first-quarter revenue of between $28 million
and $36 million was also below consensus, which stood at $36.8
million, Citi analysts said.