Daijiworld Media Network - San Diego
San Diego, Jul 28: Smartphone chipmaker Qualcomm has informed its customers that it will increase prices for its products by a double-digit percentage from September 1, citing rising supplier costs, according to a Bloomberg News report.
The report said Qualcomm sent a letter to customers on Friday stating that the revised prices would apply to products shipped on or after September 1. The company said it had reached the limit of what it could absorb in increased supplier costs and had explored sourcing components from alternative vendors before deciding on the price hike.
The increase is expected to have the greatest impact on smartphone manufacturers that use Qualcomm's Snapdragon processors, including Samsung, Xiaomi, OnePlus and several other Android device makers.
Qualcomm chips are also widely used in Windows-based personal computers, wearable devices, including Meta wearables, automotive systems and Internet of Things (IoT) products.
Manufacturers will now have to decide whether to absorb the higher component costs or pass them on to consumers through increased retail prices. As a result, premium Android smartphones launching later this year, particularly those shipping after September 1, could become more expensive.
According to the Bloomberg report, Qualcomm attributed the decision to continued increases in supplier costs, saying it could no longer absorb the additional expenses despite efforts to diversify its supply chain.
The report noted that demand for memory chips and other key semiconductor components has risen sharply as companies continue to invest heavily in artificial intelligence infrastructure and data centres. The surge in demand has tightened semiconductor supplies across the broader electronics industry, affecting products ranging from smartphones and computers to automobiles.
Qualcomm is one of the largest customers of Taiwan Semiconductor Manufacturing Co. (TSMC), the world's leading contract chipmaker. Like Apple and Nvidia, the company relies on TSMC's advanced manufacturing capacity for its high-end processors.
Bloomberg reported that TSMC continues to experience strong demand for advanced chip production as AI-related manufacturing competes for capacity, contributing to shortages of several semiconductor components.