Qualcomm, the US maker of smartphone processors. [Reuters]
Qualcomm, the US maker of smartphone processors. [Reuters]

Qualcomm, the US smartphone processor maker, issued a fourth-quarter earnings guidance below market expectations Wednesday as a memory chip shortage drove up its costs.

According to Bloomberg and CNBC, Qualcomm said Wednesday it expects fourth-quarter (ending September) adjusted earnings per share of $2.05 to $2.25 and sales of $9.7 billion to $10.5 billion. Even at the top of that range, the figures fall short of the average analyst forecast.

Qualcomm shares fell about 4 percent in after-hours trading on the news.

The company had earlier announced it would raise chip prices to smartphone manufacturers by a double-digit percentage starting Sept. 1, and said it is exploring other ways to streamline its supply chain.

CEO Cristiano Amon said "costs have gone up, and prices will go up," citing rising input costs across the semiconductor industry — including wafer manufacturing, assembly, testing, advanced packaging and memory chips.

A memory chip shortage triggered by surging demand for AI computers is the central driver of the cost pressure.

Structural headwinds compounded the strain. Qualcomm said Android smartphone sales are expected to decline about 20 percent in the current fiscal year, shaving more than $1.50 from earnings per share.

Apple is also accelerating its shift to in-house chip designs faster than expected, pulling further business away from Qualcomm.

Qualcomm relies on Taiwan's TSMC for contract chip manufacturing, and TSMC is itself stretched thin as it struggles to keep up with broad-based demand.

However, Qualcomm said sales tied to Chinese smartphone manufacturers are expected to bottom out in the third quarter and return to sequential double-digit growth starting in the fourth quarter.

The company also pointed to diversification into automotive and data center businesses as a path forward, with plans to raise the share of non-smartphone revenue from 24 percent this year to 60 percent next year.

Qualcomm signed a new contract to supply digital cockpit chips to BMW in the automotive segment, and set targets of $10 billion in automotive sales and $15 billion in data center sales by 2029.

Third-quarter results (ending June) were in line with consensus. Adjusted earnings per share came in at $2.21, while sales fell 4 percent year-on-year to $9.95 billion.

Qualcomm shares had rallied earlier this year on optimism over its data center business, but have pulled back over the past month as investor concerns about returns on AI investment weighed on semiconductor stocks broadly.


yckim6452@heraldcorp.com