Qualcomm to raise chip prices, adding pressure on smartphone costs

Qualcomm has informed customers that it will raise chip prices by a double-digit percentage from September 1, citing higher supplier costs, a move that could make smartphones and other devices more ex

Smartphone chipmaker Qualcomm has informed customers that it plans to 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 that Qualcomm sent a letter to customers on Friday saying the higher prices would apply to products shipped after September 1. The company said it had reached the limit of what it could absorb in terms of higher costs from suppliers and had also tried sourcing components from alternative vendors before deciding on the increase.

Who will be affected?

The biggest impact is likely to be on smartphone makers that rely on Qualcomm's Snapdragon processors. These include Samsung, Xiaomi, OnePlus and several other Android device manufacturers. Qualcomm chips are also used in Windows PCs, wearable devices including Meta wearables, automotive systems and Internet of Things (IoT) products.

 

Manufacturers will now have to decide whether to absorb the higher chip costs or pass them on to consumers through higher retail prices.

 

The increase could therefore affect buyers of premium Android smartphones launched later this year, particularly devices that begin shipping after September.

Why is Qualcomm raising prices?

According to Bloomberg News, Qualcomm said it could no longer absorb rising supplier costs. The company also said it had explored sourcing components from new suppliers before deciding to raise prices.

 

Demand for memory chips and other key semiconductor components has surged as companies invest heavily in artificial intelligence infrastructure and data centres. That has tightened supplies across the broader electronics industry, affecting products ranging from smartphones and personal computers to vehicles.

 

Qualcomm is among the largest customers of Taiwan Semiconductor Manufacturing Co (TSMC), the world's biggest contract chipmaker. Like several other leading chip designers, including Apple and Nvidia, Qualcomm depends on TSMC's manufacturing capacity for advanced processors. Bloomberg News said TSMC continues to face strong demand as AI-driven chip production competes for manufacturing capacity, contributing to shortages of several semiconductor components.