Communications technology provider Qualcomm is feeling the effects of a chip shortage that first hit the auto industry and is spreading across the electronics business.
According to a report from Reuters, the company is struggling to keep up with demand for its processor chips used in smartphones and gadgets.
Demand for Qualcomm’s chips has soared in the past months as Android phone makers seek to win over customers abandoning phones produced by Huawei due to US sanctions. Qualcomm has found it hard to meet this higher-than-expected demand, in part due to a shortage of some subcomponents used in its chips.
Two Samsung suppliers told Reuters that the smartphone maker is experiencing a shortage of Qualcomm’s application processors. One said a Qualcomm chip shortage was hitting production of mid- and low-end Samsung models. The other said there was a shortage of Qualcomm’s new flagship chip, the Snapdragon 888, but did not say whether this was affecting the manufacturing of Samsung’s high-end phones.
A Samsung Electronics spokesman declined to comment. A Qualcomm spokesman pointed to public comments by executives on Wednesday in which they reiterated they believe they can hit a fiscal second quarter sales forecast given in February.
Separately, a senior executive at a top contract manufacturer for several major smartphone brands told Reuters it was facing a shortage of a range of components from Qualcomm and would cut handset shipments this year.
Last month, Lu Weibing, a vice president for Chinese handset maker Xiaomi, lamented the chip crunch. “It’s not a shortage, it’s an extreme shortage,” he wrote on Chinese social network Weibo.
A surge in demand for consumer electronics has driven a global chip shortage that has idled car factories. The shortage has so far centred largely on chips made using older technology rather than the advanced phone processors Qualcomm designs.
“We still have our demand basically higher than supply,” Qualcomm incoming chief executive Cristiano Amon told investors during the company’s annual meeting on Wednesday.
Qualcomm’s entire line-up of application processors contain power management chips made with older technology by companies including China’s Semiconductor Manufacturing International Corporation and Taiwan Semiconductor Manufacturing Co. It is directing supply of these power management chips towards its Snapdragon 888 application processors, but that is hurting supplies of lower-end Qualcomm application processors, sources told Reuters.
