Ripple effect: As rising memory costs drive up prices across PCs, smartphones, and gaming consoles, another major hardware supplier has announced it can no longer delay price increases. This time it is Qualcomm, with an imminent adjustment that will make smartphones, tablets, wearables, and some laptops even more expensive.
Qualcomm sent a letter to its customers on Friday warning that its chips will soon become more expensive due to rising supply costs. The company develops processors that power most Android devices, numerous wearables, automotive systems, and a growing share of Arm-based laptops, so the impact is expected to be widespread.
Bloomberg, which obtained the letter, reports that price increases will rise by an unspecified double-digit percentage and would apply to components shipped after September 1. Qualcomm has been unable to escape the surging supply costs that have already affected Microsoft, Apple, Sony, and many other manufacturers.
Memory and storage are the primary culprits, having quintupled in price since late last year as AI data center construction absorbs most of the available production capacity from DRAM and NAND manufacturers. RAM prices could rise by another 40% to 50% in the third quarter of this year, followed by a further 30% to 40% in Q4. This ripple effect has also pushed up the costs of CPUs, printed circuit boards, and other components. Qualcomm at least partially attributes its upcoming price hike to the need to find alternative suppliers.
Samsung phones, which are powered by Qualcomm’s Snapdragon processors, would be among the most affected products. However, wearable devices such as smart glasses and VR headsets also use chips from the same family. Additionally, Microsoft and various PC manufacturers are pushing to sell an Arm-based version of Windows through new lineups of more powerful Snapdragon SoCs.
Qualcomm’s adjustment could also impact Google’s plans to launch a lineup of Snapdragon-based laptops running a new Android-based operating system later this year. Qualcomm’s products even extend to the AI data centers partly responsible for the component shortages. The company recently unveiled ambitious plans to compete with Nvidia in the server CPU market.
The situation is expected to worsen next year due to additional price increases from the manufacturer that Qualcomm, Apple, Nvidia, Google, Amazon, Arm, and MediaTek all depend on: TSMC. Recent reports indicate that the chipmaker will raise prices for most of its semiconductor nodes at least once next year by approximately 10%, creating an even broader ripple effect throughout the industry.
