Qualcomm plans to hike smartphone processor prices by double digits — Who will be impacted?

Qualcomm Inc., the largest maker of smartphone processors, plans to raise prices by double-digit rates; This move is expected to affect much of the technology industry.

The San Diego-based company sent a letter to customers on Friday informing them of the price increases, according to a copy of the document seen by Bloomberg News. Qualcomm told customers that this increase will apply to products shipped after September 1.

The company said it had exhausted its ability to absorb higher costs from suppliers and was attempting to source alternative components from new sources.

Like the rest of the tech industry, Qualcomm is suffering from historic supply shortages; It’s a crisis that affects everything from smartphones to supercomputers and vehicles. The massive surge in AI data center construction has pushed the production of memory chips and other semiconductors, but it has also made more mundane components harder to obtain.

Qualcomm is one of the largest customers of Taiwan Semiconductor Manufacturing Co., a leading provider of outsourced chip making. It is a leading supplier to South Korea’s Samsung Electronics Co. and major Chinese phone makers including Xiaomi Corp. Qualcomm’s chips are also used in Meta Platforms Inc.’s wearable devices.

Qualcomm shares, which fell as much as 2.7 percent on Friday as part of a broader tech downturn, hit a session high on the news; This is a sign that investors expect an increase in revenue. As of 12:47 a.m. New York time, it fell 1.5% to $168.49.

The company has seen sales decline this year as a shortage of memory chips has hurt the smartphone industry’s ability to produce enough devices. Wall Street predicts that this crisis will continue into next year.

Qualcomm, Apple Inc., Nvidia Corp. and many of the leading semiconductor designers are trying to secure more supply from TSMC, which has said it expects shortages to continue even as it tries to ramp up production.

The Taiwanese company is partly owned by Samsung and Intel Corp. It has become a gateway for the global electronics industry as potential competitors such as have yet to convince customers that their facilities can produce high-end chips in the volume and quality needed.