March 17 (Reuters) – Smartphone chip designer Qualcomm (QCOM) on Tuesday unveiled a $20 billion stock buyback program as it looks to take advantage of a steep drop in its share price, which has been hit by a global memory supply crunch that is expected to slow handset manufacturing.
Shares of the company rose more than 3% on Tuesday, after a year-to-date drop of over 24% as the widespread shortage of memory chips hit Qualcomm’s customers, mainly smartphone makers.
The new buyback is in addition to its existing $2.1 billion share buyback plan, the company said, adding that Qualcomm is also increasing its quarterly cash dividend by more than 3% to 92 cents per share from 89 cents.
“We remain focused on stockholder returns and executing on our ongoing diversification opportunities,” CEO Cristiano Amon said.
Qualcomm is among the largest smartphone chip providers in the world, counting major Android players and iPhone-maker Apple among its customers.
But it has been increasingly diversifying its business, attempting to reduce its dependence on the smartphone industry by working to enter the booming data center chip and autonomous vehicle markets.
(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Krishna Chandra Eluri and Anil D’Silva)