Qualcomm Inc, the biggest maker of smartphone processors, plans to increase prices by a percentage in the double digits, a move that is likely to ripple through much of the tech industry.The San Diego-based company sent a letter to customers on Friday informing them of price hikes, according to a copy of the document seen by Bloomberg News. The rise would go into effect for products shipped after Sept. 1, Qualcomm said.The company said it had exhausted its ability to absorb higher costs from suppliers and had made attempts to secure alternative components from new sources.
A smartphone with a Qualcomm logo is placed on a motherboard in this illustration taken in 2023.
Like the rest of the tech industry, Qualcomm is suffering from historic supply shortages — a crunch that is hitting everything from smartphones to supercomputers to vehicles. A massive surge in artificial intelligence (AI) data center construction has placed a strain on production of memory chips and other semiconductors, but it has also made more prosaic components difficult to obtain.
Qualcomm is one of the biggest customers of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the top provider of outsourced chipmaking. It in turn is a top supplier to South Korea’s Samsung Electronics Co and major Chinese phone makers including Xiaomi Corp (小米). Qualcomm’s chips are also used in Meta Platforms Inc’s wearable devices.The company has suffered declining sales this year because shortages of memory chips have hurt the smartphone industry’s ability to build enough devices. Wall Street is estimating that crunch would drag on into next year.Qualcomm, Apple Inc, Nvidia Corp and most of the leading semiconductor designers are all trying to get more supply out of TSMC, which has said it expects shortages to continue even as it works to increase production.The Taiwanese company has become a chokepoint for the global electronics industry, partly because would-be rivals such as Samsung and Intel Corp have yet to convince customers that their plants are capable of producing high-end chips in the volume and quality needed.
