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Qualcomm is raising phone chip prices starting September 1st
Qualcomm has confirmed it will raise prices across its phone processor line-up from 1 September, a move CEO Cristiano Amon flagged during the company's earnings call. The increase, previously rumoured to be a "double-digit percentage," comes as Qualcomm reported a 20% year-on-year drop in handset revenue, its lowest since 2021, which it attributes to soaring memory prices and supply constraints affecting the wider electronics industry. Rather than absorb the squeeze on margins, Qualcomm is passing the cost on to device makers, meaning phones using its chips are likely to become more expensive for consumers.
The company is also bracing for a further hit as its modem share in the upcoming iPhone is expected to fall "materially," and executives suggested growth in its data centre and automotive divisions would help offset declining phone revenue, which it expects to fall to half its total revenue soon and just a third by 2029. Qualcomm also announced a ten-year chip supply deal with BMW, and its finance chief noted some manufacturers are already switching to older, cheaper Qualcomm chips to manage rising costs.
In short
- Qualcomm to raise phone chip prices from 1 September, likely double digits
- Handset revenue fell 20% year-on-year, lowest since 2021, blamed on memory costs
- Firm is pivoting toward data centres and automotive, signing a 10-year BMW deal
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Qualcomm can argue that higher prices are necessary to reflect rising memory and supply costs, rather than absorbing them at the expense of margins and investment. Passing costs to device makers may help sustain chip development and supply, while manufacturers retain choices such as using older, cheaper processors or negotiating how much of the increase reaches buyers.
The case against
Device makers can argue that a double-digit price rise adds pressure to an industry already facing expensive memory and constrained supply, with consumers ultimately likely to pay more for phones. They may also contend that Qualcomm’s scale and position in the market give it room to share more of the cost burden, rather than passing it on so directly.
Explained simply
Qualcomm is the world's largest designer of mobile phone processors, the chips that power most smartphones. From 1 September, the company is raising prices across its phone chip line-up, a move that will likely result in more expensive phones for consumers since device makers typically pass these costs on.
The price increases are due to surging costs in semiconductor manufacturing, particularly for memory chips, combined with supply shortages across the wider electronics industry. Device makers such as Samsung and Xiaomi will need to decide whether to raise their own prices or accept lower profit margins.
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