Smartphone chip supplier Qualcomm has told its customers it will raise prices by a percentage in the double digits, according to a report that cited a customer letter. The notice, delivered to clients on Friday, indicates the increases apply to products shipped after September 1.
The company has not immediately replied to a request for comment from Reuters. The report also said Reuters could not independently verify the letter's contents.
In the communication to customers, Qualcomm said it could no longer absorb rising supplier costs and that it had attempted to mitigate the pressure by seeking alternative components from new suppliers. The letter frames the price action as a response to supplier cost inflation rather than a change in product mix or demand.
The notice arrives as Qualcomm faces growing headwinds in the smartphone market. The company is contending with a memory chip shortage at a time when industry investment appears to be shifting toward AI infrastructure, a dynamic the report cited as intensifying pressure on the smartphone supply chain.
Market reaction was muted but negative on the report: Qualcomm shares were trading down by more than 1% after the news. The company is scheduled to release its third-quarter financial results on July 29, a near-term event that will provide updated revenue and margin context.
Details in the report include:
- The customer letter was sent on Friday and states the price increase will apply to products shipped after September 1.
- Qualcomm told customers it could not continue to absorb rising supplier costs and had looked to new component suppliers as part of its response.
- The report highlighted broader market strain in the smartphone sector as resources move toward AI-related infrastructure, contributing to a memory chip shortfall.
- Reuters noted it could not independently verify the report and that Qualcomm had not immediately responded to a Reuters request for comment.
Investors and supply-chain managers will likely watch Qualcomm's upcoming quarterly report for further clarity on how the company plans to manage supplier inflation and what impact the announced price adjustments may have on volumes and margins. For now, the company's client outreach and the timing of the price change - effective for shipments after September 1 - provide the most concrete information available.