Qualcomm Lowers Forecast on Memory Chip Shortage

Forecast Miss Due to Supply Constraints

Qualcomm Inc. has issued a second-quarter revenue and profit forecast that falls short of Wall Street expectations. The company attributes this weaker outlook to a global shortage of memory chips, which is directly impacting the sales of its smartphone customers.

Market Overview and Figures

The chip supplier projects revenue between $10.2 billion and $11 billion, below the analyst consensus of $11.12 billion, according to LSEG data. Adjusted earnings are forecasted to be between $2.45 and $2.65 per share, compared to the estimated $2.89. CEO Cristiano Amon stated the entire forecast miss is due to this memory supply issue, noting he wishes the company had more memory available.

Industry Impact and Outlook

The shortage is causing smartphone manufacturers (OEMs), particularly in China, to reduce their inventory levels. While this presents a near-term challenge, Qualcomm notes that OEMs are prioritizing available memory for their premium-tier devices. This trend could cushion the impact on Qualcomm, as its chips are prevalent in high-end Android phones which are less price-sensitive to rising memory costs.

Summary

Qualcomm's lower-than-expected forecast highlights the significant impact of supply chain disruptions on the semiconductor industry. The market will closely monitor how memory chip availability evolves and its subsequent effect on smartphone production and chip demand throughout the year.

FAQ

Q: Why did Qualcomm lower its forecast?
A: The company lowered its forecast primarily due to a global memory chip shortage affecting its smartphone customers' ability to manufacture devices.

Q: What was Qualcomm's revenue forecast for the second quarter?
A: Qualcomm forecasted Q2 revenue to be in the range of $10.2 billion to $11 billion.

Source: Investing.com