Qualcomm's December quarter result is solid, with chipset price and margin showing some upside. The March quarter chipset average selling price guidance is the bright spot of the night, to grow 30%+ both QoQ and YoY to $30+ in the March quarter.

This is the inflection point Qualcomm management has been talking about for a while: a 1.5x ASP improvement from 4G to 5G, thanks to a higher price of 5G chipset and more importantly the increase of RF (radio frequency) content Qualcomm provides. While the margin profile going forward remains an uncertainty, we are very encouraged by the strong ASP lift.

Qualcomm's RF revenue is on track to grow another 50% in the March quarter as 5G solutions start to ship in more volume. We've written about the possibility that Qualcomm's progress in the RF market maybe one of the reasons why Broadcom decided to sell its RF unit a couple of weeks ago. When asked about his thought on Broadcom's potential sale and if that's the result of Qualcomm's business, QCOM CEO Steve Mollenkopf simply said: "well, obviously it's not a surprise to us."

MediaTek also reported its December quarter result this week. While the quarter itself was largely OK, the March quarter outlook was a bit weaker compared to Qualcomm. It will start shipping its Dimensity 800 5G chipset for mid to high-end smartphones later in the March quarter, with another one targeting the mass market likely in August or September. So we will need a little bit more patience for the 5G upside at MediaTek.