Qualcomm to raise prices across the board from Sept 1 amid memory crunch

Qualcomm CEO Cristiano Amon delivers a keynote speech at Computex in Taipei, Taiwan, June 1, 2026. Ann Wang | Reuters

Qualcomm reported fiscal third-quarter earnings on Wednesday that were in line with analyst expectations, but provided light guidance for current-quarter earnings on in-line revenue, blaming the ongoing supply crunch for computer parts, especially memory.

Price Increases and Margin Strategy

Qualcomm is taking concrete measures to expand its margins going forward, CEO Cristiano Amon said in an interview. These include raising prices across the board starting September 1 for the company's chips—most of which currently go to smartphone makers—and exploring other ways to streamline the company's supply chain.

"Cost went up, prices are going to go up," Amon said.

Third-Quarter Results vs. LSEG Estimates

• EPS: $2.21, adjusted, versus $2.23 estimated
• Revenue: $9.95 billion versus $9.67 billion estimated

Current-Quarter Guidance

For the current quarter, Qualcomm expects adjusted earnings per share of between $2.05 and $2.25 on revenue between $9.7 billion and $10.5 billion. Analysts polled by LSEG were expecting $2.36 in adjusted earnings per share on $10.02 billion in sales.

"The semiconductor industry is experiencing a broad-based increase in input costs, across wafer fabrication, assembly, test, advanced packaging, memory and other materials," Qualcomm said in its release, although management noted that "revenues continue to be healthy."

Handset Business

The company's handsets business remains the largest slice of chip sales, although Qualcomm under Amon is looking to diversify into cars, smart glasses, and robots. The company is targeting non-smartphone sales to account for 60% of revenues next year.

Qualcomm reported $5.1 billion in handset chip sales, down 20% on an annual basis, which the company said reflected a bottoming in the China market.

Amon noted that dynamics in the smartphone market had made low-end and mid-priced phones less competitive due to affordability issues. He added that even premium Android phones, where Qualcomm is dominant, were seeing customers looking for lower prices.

"Consumer preference is within the premium category is changing towards preference to the lower end of the premium, as well to last year's phone, because of the memory price increases," Amon said.

"There's also a change in gross margin because of the high supply cost that you're all hearing about," Amon added. "It's a temporary, short-term thing we are addressing with price increases."

Automotive Business

Qualcomm's automotive business was a bright spot. The company reported $1.59 billion in automotive sales. In June, Qualcomm said it was looking to report $10 billion in automotive revenue by 2029. On Wednesday, it announced a chip supply deal with BMW for digital cockpit chips.

AI and Data Center Expansion

Qualcomm is also looking to enter the rapidly growing market for AI data center infrastructure. Amon said the company remains on track to report $5 billion in data center revenue next year.

On Wednesday, Qualcomm announced it had completed the acquisition of Modular, a software company making programming technology for AI. The company said it would unveil its AI software platform at a conference in August.

Internet of Things Revenue

Qualcomm's chips for low-power industrial uses and smart glasses are reported as internet of things revenue. The unit's sales rose 9% on an annual basis to $1.83 billion.

Net Income

Net income during the period was $2 billion, down 25% from $2.66 billion in the year-ago period.

QTL Licensing Division

Qualcomm makes significant profit through its QTL division, which licenses its intellectual property for cellular connections and other chip technology to other companies. QTL revenue was $1.28 billion, higher than the StreetAccount estimate of $1.26 billion.

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