Qualcomm reports lower sales and profits as memory prices rise

In short: Qualcomm reported lower revenue and profit for its June quarter as higher memory chip prices and weaker smartphone sales squeezed its handset business.

What happened

Qualcomm, a US company that makes chips used in many smartphones, said its revenue was $9.9 billion for the quarter ending in June. That was down 4% from a year earlier, although slightly above what analysts expected.

Profit fell more sharply. Qualcomm said net income was $2 billion, down 25% year on year.

The biggest hit came from its handset business. Revenue there fell 20% to $5 billion. CEO Cristiano Amon pointed to a “challenging memory and supply environment”, meaning key parts used in phones, especially memory chips (the parts that store data, like a phone’s short term and long term “workspace”), have become more expensive and harder to source.

Qualcomm is trying to rely less on smartphones by building businesses in areas like cars and AI data centres (large buildings full of computers that run online services). Amon said these non-smartphone areas could grow to $40 billion in revenue by fiscal 2029.

After the results, Qualcomm shares fell about 5% in after-hours trading.

Why it matters

Even as more companies spend heavily on AI equipment, rising chip and memory costs can still hurt phone makers and the suppliers behind them. If parts stay expensive, it can mean fewer phone upgrades and more pressure on prices, especially for lower-cost phone brands.

Source: Financial Times