Qualcomm Unable To Keep Up To Surge In Smartphone Chip Demand: Reports

The global chip shortage that first hit the global auto industry is now getting into other sectors of the electronics business and chip maker Qualcomm Inc is current finding it hard to meet up the demand for its processor chips that are used in smartphones and gadgets, said reports quoting industry sources.

A shortage of Qualcomm’s application processors, which is at the heart of smartphones, is being experienced by the largest smartphone maker of the world Samsung Electronics Co., said reports based on sources at two suppliers for the South Korean firm.

With Android phone makers trying to secure customers who are abandoning the smartphones made by the Chinese company Huawei Technologies Co Ltd due to sanctions from the United States, there has been a significant increase in demand for Qualcomm’s chips in the past months. A shortage in the supply of some subcomponents used in its chips is partly responsible for Qualcomm finding it difficult to meet the higher than expected demand for its chips.

The production of mid- and low-end Samsung models was being because of a Qualcomm chip shortage, said reports quoting a sources at a Samsung supplier. A shortage of Qualcomm’s new flagship chip, the Snapdragon 888, was also reported by another source of another supplier of Samsung in reports, even though whether that shortage was affecting the production of the high end phones of Samsung was not mentioned.  

No comments on the issue were available from Samsung Electronics/.

The public comments by Qualcomm executives earlier in the week was pointed out by a company spokesman in which the company had said that it would be able to achieve the sales target it had given itself in February for the fiscal second quarter sales.

A source in a top contract manufacturer for several major smartphone brands also reportedly  told the news agency Reuters that the company was facing a shortage of a range of components from Qualcomm and would have to curb shipments of handsets this year.

The chip crunch was lamented last month by Lu Weibing, a vice president for Chinese handset maker Xiaomi. “It’s not a shortage, it’s an extreme shortage,” he wrote on Weibo, China’s Twitter-like social network.

Car companies have been forced to scale back production because of the global chip shortage which has been driven by a surge in demand for consumer electronics during the pandemic as people stayed back home and worked or attended classes form home. According to reports, the current smasrtphone chip shortage is mainly related to chips made using older technology instead of the more advanced phone processors that are designed and made by Qualcomm.

However the current issue being faced by Qualcomm show that an issue in the complex chip supply chain of chip making can propagate into other areas as well. It also shows how chip companies can be pushed into trouble because of fast-changing market dynamics as mass production for chips has to be planned and executed years in advance.

“We still have our demand basically higher than supply,” Qualcomm incoming Chief Executive Cristiano Amon told investors during the company’s annual meeting.

(Adapted from TheHindu.com)

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