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Chip Shortage Reportedly Expands to Mobile as Qualcomm Faces Supply Issues

Qualcomm stock image
(Image credit: Shutterstock)

The chip shortage has expanded to the smartphone market, Reuters said Thursday, with Qualcomm reportedly struggling to make enough processors for its clients. That struggle could affect the availability—and pricing—of Android phones in the future.

This shortage reportedly stemmed from two problems: increased demand for Qualcomm processors and decreased availability of the parts used to make them. Sound familiar? It’s the same duo affecting the automotive and tech industries.

Reuters said the increased demand was partly caused by companies rushing to fill the void left by Huawei after the U.S. government sanctioned it. The rise of 5G has also helped, according to IDC, as has “pent-up demand” caused by COVID-19.

5G phones need 5G-capable processors, of course, which is where Qualcomm comes in. The company announced the flagship Snapdragon 888 5G Mobile Platform in December 2020; numerous manufacturers have already built phones around it.

Reuters said that, per an anonymous source, there’s a Snapdragon 888 shortage. Other sources reportedly told the publication that Qualcomm hasn’t been able to meet the demand for the processors used in low-end or mid-range smartphones, either.

That essentially means the entire band of Android smartphones, from budget models to flagship products, could be affected by the Qualcomm processor shortage. But the problem might actually start with another company: Samsung.

Qualcomm used Samsung’s 5nm process in the Snapdragon 888; it’s possible that production of that process hasn’t scaled enough to meet demand. Reuters said the company also relies on a Samsung factory in Texas for some of its radio frequency transceivers.

You might have guessed where this is going. In February, Samsung was asked to shut down that Texas factory to conserve power while the state responded to a winter storm that left millions of people without electricity, heat, or running water.

Samsung has struggled to get that fab running again because it needs to inspect, clean, and reconfigure all of its equipment. (All while making sure COVID-19 safety protocols are being followed, of course.) This could lead to even more delays.

This means Samsung can’t make smartphones without Qualcomm’s products, but Qualcomm can’t make those products without Samsung, either. It’s like an ouroboros that’s starving even as it consumes itself, but with 5G networking. 

  • bigdragon
    Things are going from bad to worse, to even worse, and then even more worse.

    I'm super happy no one will face accountability for any of this. In fact, they'll all be rewarded with higher prices, record profits, and record stock prices. Wonderful.
    Reply