Qualcomm has notified customers that its chip prices will increase by a double-digit percentage, adding further pressure to a consumer electronics market already dealing with rising component costs.
Qualcomm told customers in a letter dated Friday, July 24, obtained by Bloomberg, that higher supply costs are driving a price increase. The new pricing will apply to components shipped after September 1. While the company didn’t provide a specific percentage, it said the increase will be in the double digits.
Because Qualcomm chips are found in so many devices, the impact won’t be limited to smartphones. Snapdragon processors also power wearables, cars, and more Arm-based Windows laptops than ever before, so the price increase could be felt across a wide range of products.
Qualcomm isn’t the only company dealing with rising costs. Microsoft, Apple, Sony, and other hardware makers have all been squeezed by the same problem. Memory prices have surged about five times since late last year because AI data centers are using up much of the available supply. Analysts also expect RAM prices to keep climbing, with another 40% to 50% increase in the third quarter and 30% to 40% more in the fourth.
The supply crunch has increased the cost of CPUs, printed circuit boards, and other components. Qualcomm said its upcoming price increase is partly due to the higher expense of working with alternative suppliers in a market where supply remains limited.
Many Samsung smartphones depend on Qualcomm’s Snapdragon processors, making them likely candidates for higher production costs. Wearables, including smart glasses and VR headsets built on the same platform, could also see price increases.
The PC market is likely to feel the effects as well. Microsoft and several manufacturers are expanding their lineup of Arm-based Windows laptops powered by Snapdragon chips, but rising silicon costs could make those devices more expensive. Google’s rumored Snapdragon-powered laptops, expected later this year with an Android-based operating system, may also face higher manufacturing costs.
Qualcomm is also part of the market that’s creating the shortage. The company recently revealed plans to compete with Nvidia in server processors for data centers, meaning it’s dealing with the supply crunch while also helping drive demand for the same components.
Things may get even more expensive next year. TSMC, the company that manufactures chips for Qualcomm, Apple, Nvidia, Google, Amazon, Arm, and MediaTek, is expected to raise prices across most of its production lines. Reports suggest an increase of about 10%, which could drive up costs for nearly every major tech company that depends on its factories.
As costs continue to increase across memory, logic chips, and semiconductor manufacturing, higher prices for smartphones, wearables, and laptops are likely to persist in the coming years.
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