Story
Qualcomm to Implement Double-Digit Price Hikes on Chips, Bloomberg Reports
Summary
The smartphone chipmaker reportedly informed clients of significant price increases effective September 1, citing the inability to absorb rising supplier costs amid a broader memory chip shortage.
Qualcomm Inc. has informed its customers of plans to implement a double-digit percentage price increase on its smartphone chips, citing rising supplier costs, according to a report from Bloomberg News on Friday. The price hike is scheduled to take effect for all products shipped after September 1.
Citing Rising Costs
According to the report, which cited a letter sent to clients, Qualcomm stated it could no longer absorb the escalating costs from its suppliers. The San Diego-based chip designer also noted it had sought alternative components from new suppliers to mitigate these pressures.
Reuters, which first reported on the Bloomberg story, said it could not independently verify the letter's contents. Qualcomm did not immediately respond to a request for comment on the matter.
AdMarket Impact and Industry Headwinds
The move to raise prices highlights the mounting pressure on the smartphone market. The industry is currently grappling with a memory chip shortage, partly due to a significant redirection of investment capital toward building out infrastructure for artificial intelligence (AI), which is tightening the supply of components for consumer electronics.
Following the news, shares of Qualcomm (QCOM) were trading down more than 1%. The announcement comes just days before the company is scheduled to release its third-quarter financial results on July 29, an event investors will be watching closely for further details on margins and demand.
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