Qualcomm Inc. earnings more than doubled in the second quarter, and executives said the chip company was significantly improving its access to foundries during a global semiconductor shortage in which capacity constraints have hampered the sector.

“Given the advantage of our scale, we were able to take our technology then move it into foundries where there was some available capacity, and we’ve been investing in that over the last several months,” Qualcomm
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Chief Financial Officer Akash Palkhiwala told MarketWatch in an interview. “And what you’re now seeing is the benefit of us being able to tap into available capacity at several suppliers.”

That benefit showed up in Qualcomm’s fiscal third-quarter earnings of $2.03 billion, or $1.77 a share, compared with $845 million, or 74 cents a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were $1.92 a share, compared with 86 cents a share in the year-ago period.

Revenue rose to $8.06 billion from $4.89 billion in the year-ago quarter. Wall Street analysts, however, estimate revenue that excludes Qualcomm’s Strategic Initiatives investment segment. Without QSI, revenue rose to $8 billion, compared with $4.89 billion in the year-ago period.

Analysts surveyed by FactSet had forecast earnings of $1.68 a share on revenue of $7.53 billion, based on Qualcomm’s forecast of $1.55 to $1.75 a share on revenue of $7.1 billion to $7.9 billion.

Shares steadily traded more than 2% higher in after-hours action, following a 1.1% rise in the regular session to close at $142.44.

Chip companies have seen profit and revenue spike amid the chip crunch that has been slamming supply chains for months. As the COVID-19 pandemic hit, the companies that make silicon wafers were flooded with customers that made chips for high-demand products like laptops and mobile devices. On the other hand, demand for things like autos fell, so the companies that made chips for cars dropped capacity and were unable to get it back when car demand rebounded.

Qualcomm’s chip designs go into cellphones, cars and much more, so access to foundries and how it would improve gross margins was of interest to analysts on the call. Chief Executive Cristiano Amon, in his first earnings call as CEO, emphasized that the company was on track for annual revenue of $10 billion for non-smartphone products.

“We have the history of being a phone company, but over the past couple of years we invested and developed all these new markets,” Qualcomm’s Palkhiwala told MarketWatch.

The majority of Qualcomm’s sales came from the traditional wireless and mobile business, which includes 5G chips and sales for handsets, with a 57% gain from a year ago to $3.86 billion. The company’s inroads to diversify, however, accounted for about a third of revenue, and made up its fastest growing businesses.

Sales of chips for RF front-end products — the crucial circuity that converts data back and forth between a device’s antenna and the data the device uses to function — more than doubled to $957 million from a year-ago; Internet-of-Things, or IoT, products surged 83% to $1.4 billion, and automotive products also gained 83% for $253 million, all told accounting for $2.6 billion in revenue. The expansion into new non-phone markets comes as more and more smart products become like phones, in that they communicate over wireless channels.

Qualcomm forecast adjusted third-quarter earnings of $2.15 to $2.35 a share on revenue of $8.4 billion to $9.2 billion, while analysts were estimating $2.03 a share on revenue of $8.46 billion.

Over the past 12 months, Qualcomm shares are up 56%, compared with a 59% gain for the PHLX Semiconductor Index
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  a 37% rise by the S&P 500 index
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 and a 42% gain by the tech-heavy Nasdaq Composite Index
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