Qualcomm has issued weaker-than-expected earnings guidance and signalled that it will raise chip prices to offset surging memory costs, underscoring the pressure facing the smartphone-chip giant as a global memory crunch tightens supply chains.
The company projected quarterly profit below Wall Street expectations, citing rising component costs and an accelerating decline in revenue tied to Apple, which continues to shift toward developing its own modem chips.
“Cost went up, prices are going to go up,” Chief Executive Cristiano Amon said in an interview, framing the increases as a direct response to the higher price of memory components essential to modern processors.
The memory squeeze has rippled across the semiconductor industry, driven by soaring demand for data-centre hardware and artificial-intelligence applications that has strained the supply of high-performance chips.
Qualcomm’s warning marks a continuation of headwinds the company flagged earlier this year, when it cautioned investors about a tightening memory market that has weighed on margins across the sector.
The anticipated drop in Apple-related revenue is expected to intensify as the iPhone maker phases out Qualcomm modems in favour of in-house designs, removing a long-standing pillar of the chipmaker’s business.
To reduce its reliance on smartphones, Qualcomm has been expanding into automotive chips, personal computers and connected devices, seeking new revenue streams as its core handset market matures.
The company has also leaned heavily on demand from Chinese smartphone manufacturers, a segment that has helped cushion earlier revenue declines from its shrinking Apple partnership.
Higher chip prices could ripple through to device makers and, ultimately, consumers, at a time when the broader electronics industry is already contending with elevated component costs.
Investors will be watching closely to see whether Qualcomm’s diversification strategy and planned price increases can offset the twin pressures of the memory crunch and the fading Apple business in the quarters ahead.