US EditionQualcomm, Arm Bear Brunt of Memory Shortage as Smartphone Chip Sales Disappoint
Qualcomm's forecast cut follows big data-center memory orders that limit supply for smartphones, impacting chip sales despite a 3% handset sales increase, executives said.
- On Wednesday, Qualcomm reported fiscal first-quarter results that beat expectations but its forecast came up short, with shares plunging nearly 10% in after-hours trading.
- Big orders for data-center memory are taking production capacity away from smartphone customers, who are cutting purchases and shipments due to limited memory allocations.
- Against analyst estimates, Qualcomm posted adjusted EPS of $3.50, revenue of $12.25 billion, handset sales of $7.82 billion, and net income of $3 billion for the quarter ending in December.
- Arm Holdings' Chief Financial Officer Jason Child said royalty revenues could fall by 2% next year, while Counterpoint Research projects a 7% decline in global shipments of advanced smartphone chips in 2026.
- Despite the shortage, Qualcomm's data-center AI chips are planned for launch in the second half of this year, with meaningful revenue in fiscal 2027, the company says.
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10 Articles
Qualcomm shares slide 9% as memory chip shortage hits smartphone market
Chip maker Qualcomm anticipates lower revenue and profit. A global memory chip shortage is affecting smartphone sales. This shortage is expected to continue for several quarters. Qualcomm's smartphone chip sales are projected to decrease. However, its data center business remains unaffected. The company is expanding into new areas to diversify.
Qualcomm posts Q1 increase as memory shortage looms
Qualcomm reported revenue of $12.2 billion for its fiscal Q1 which marked a 5 per cent year-over-year increase, but its forecast for the current quarter was below analyst expectations due in part to a global memory chip shortage. For Q2, Qualcomm forecast revenue between $10.2 billion and $11 billion, which was below analysts’ projection of $11.2 billion, according to data compiled by Bloomberg. CEO Cristiano Amon stated the company’s near-term…
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