Qualcomm issues dire memory shortage warning

Qualcomm Shares tumbled 10% after the chipmaker issued disappointing guidance as skyrocketing demand for AI data centers depleted the supply of memory chips for consumer electronics.

On the earnings call with analysts, Qualcomm CEO Cristiano Amon said the weakness was “100% memory-related.”

The availability of dynamic random access memory, widely used in smartphones, computers and wearable technology, is down from a year ago.

He said phone demand remains strong, but memory supply is decreasing as more resources are diverted to high-bandwidth memory used in data centers.

“I think the market will grow accordingly,” Amon said. “I think our customers are adjusting their build production based on the memory they have.”

The California-based company beat its first-quarter financial forecasts but forecast adjusted earnings per share of $2.45 to $2.65 for the quarter and revenue of $10.2 billion to $11 billion. Analysts surveyed by LSEG were forecasting sales of $11.11 billion and earnings of $2.89 per share.

Amon said in an interview that he wasn’t sure whether smartphone makers would raise prices, but he expected the shortage would negatively impact supply.

He also said that the company’s customers are focusing on higher-end devices, making them more capable of absorbing increases in memory prices.

Companies in the technology sector are starting to feel the pinch of memory lapse. Arm Earnings also fell after smartphone memory chip concerns. Apple It warned last week that it couldn’t get enough chips to meet strong iPhone demand.

The supply and demand imbalance is helping memory chip manufacturers. Micron Technology And Samsung Electronicsand contributes to rising prices.

Qualcomm said Wednesday it expects data center sales from new AI chips and other data center products to emerge in fiscal 2027.