Qualcomm to raise prices during memory crunch as chipmaker issues light earnings guidance

Qualcomm reported its fiscal third-quarter results on Wednesday, showing performance in line with expectations. Despite steady revenue, the company issued light earnings guidance for the coming quarter. Management points to a significant supply crunch for computer parts, specifically memory components, as a major hurdle.

CEO Cristiano Amon confirmed that Qualcomm intends to raise chip prices across its portfolio starting September 1. This move addresses increased input costs in wafer fabrication, assembly, testing, and packaging. While demand remains stable, the cost of manufacturing continues to rise, pressuring margins for the semiconductor firm.

Handset chip sales remain the largest revenue source, though this segment saw a 20 percent year-over-year decline. The company notes this decline reflects a bottoming out in the China market. Consumers are increasingly shifting toward mid-range and older device models due to affordability concerns linked to higher memory prices.

Qualcomm is actively pursuing diversification to reduce reliance on the smartphone sector. The company aims for non-smartphone products to account for 60 percent of its revenue by next year, focusing on automotive, smart glasses, and robotics. Automotive sales reached 1.59 billion dollars this quarter, supported by a new supply deal with BMW.

Looking toward future growth, the company expects to reach 5 billion dollars in data center revenue by next year. It also recently completed the acquisition of Modular to bolster its programming technology for artificial intelligence. Despite these growth prospects, current supply constraints remain a central focus for the company as it navigates the remainder of the year.