Qualcomm to raise chip prices Sept 1 as memory costs surge

Qualcomm will raise chip prices across its product lines starting September 1, 2026, to counter rising input costs from a global memory supply crunch, the chipmaker said on July 29 while reporting fiscal third-quarter earnings in line with analyst expectations but issuing a weaker-than-expected current-quarter outlook.

The company forecast adjusted earnings per share of $2.05 to $2.25 on revenue of $9.7 billion to $10.5 billion, falling short of the $2.36 per share consensus among analysts polled by LSEG, though revenue guidance bracketed the $10.02 billion estimate.

Net income dropped 25% to $2 billion from $2.66 billion a year earlier.

Handset chip sales, its largest segment, plunged 20% to $5.1 billion. Cristiano Amon, chief executive officer, said even buyers of premium Android phones are gravitating toward lower-priced or previous-year models because memory-driven cost increases have made devices less affordable.

"Cost went up, prices are going to go up," Amon said, blaming broad-based cost rises across wafer fabrication, assembly, test, advanced packaging, memory and other materials. He described the margin pressure as temporary and being addressed with the price hikes.

QTL, the licensing arm, reported revenue of $1.28 billion, slightly ahead of StreetAccount's $1.26 billion estimate.

Automotive chip revenue climbed to $1.59 billion, and Qualcomm announced on July 29 a deal to supply BMW with digital cockpit chips. The company aims to hit $10 billion in automotive revenue by 2029 and $5 billion in data center revenue in 2027.

Internet of things sales rose 9% to $1.83 billion.

Qualcomm, which completed the acquisition of AI software firm Modular on July 29, plans to unveil its AI software platform in August. It is targeting non-handset sources for 60% of revenue in 2027.