Technology News

Global smartphone chip shortage is imminent, Qualcomm warns

A global smartphone chip shortage is imminent but will hopefully be resolved come summer, industry giant Qualcomm warned as part of its latest quarterly earnings report.

Which manufacturers are most at risk?

In other words, the effects of all of the unexpected logistical challenges arising from 2020 are still going strong. And despite its undisputed status as an industry leader in terms of both turnover and volume of high-end chipsets, Qualcomm anticipates the incoming shortage will affect it as much as anyone. Not least because it still depends on foundry businesses from TSMC and Samsung to manufacture its acclaimed system-on-chip designs for mobile devices. Ultimately, smaller smartphone players such as Sony and OnePlus might be the most affected by the shortage. As their chip orders weren’t a priority, to begin with. Ditto for LG, which was reportedly pondering exiting the smartphone market completely even before supply issues over key components seemed as certain as they do now.

Lost business is lost business, however, which is a large part of the reason why the mood at Qualcomm is far from celebratory, even as it just reported a massive 62% revenue increase over the final three months of 2020. In total, Qualcomm generated in excess of $8.2 billion, with approximately $2.45 billion in profit. The latter figure is even more impressive as it illustrates how Qualcomm managed to keep bolstering its profit margins in an aggressive fashion. The chip giant attributed this achievement to strong momentum in the 5G segment that smartphone manufacturers were rather eager to embrace in recent times. As for this year’s chip shortage, San Diego said anticipates things to return to normal in the second half of the year.