Qualcomm told customers Friday it is raising prices by a double-digit percentage, citing costs it can no longer absorb. The San Diego-based chipmaker sent a letter to clients informing them the increases will apply to products shipped after September 1.
QCOM stock dropped 2.42% following the Bloomberg report. Taiwan Semiconductor Manufacturing Co (TSM) also slid 2.93% on the day.
Qualcomm said it had exhausted its ability to offset rising supplier costs and had already tried to source alternative components from new suppliers. Neither effort was enough to avoid passing costs on to customers.
The chipmaker is one of TSMC’s biggest customers. TSMC is the world’s top provider of outsourced chipmaking.
A surge in AI data center construction has placed heavy strain on memory chips and other semiconductors. That pressure has rippled out to more everyday components, squeezing supply chains across the tech industry.
Qualcomm has been feeling that pressure in the smartphone market, where a memory chip shortage has hit demand while investment flows toward AI infrastructure instead.
The company is the largest maker of smartphone processors in the world. Its chips power devices from major Android manufacturers globally.
Qualcomm is set to report third-quarter results on July 29. The timing of the price hike letter — just days before earnings — puts added focus on its cost structure and margins.
Qualcomm declined to comment on the Bloomberg report. Reuters said it could not independently verify the letter’s contents.
The price increases mark a notable shift. Qualcomm had previously been absorbing supplier cost increases rather than passing them along.
It is not yet clear how customers have responded to the letter or whether any have pushed back on the new pricing terms.
The double-digit increase applies to products shipping from September 1 onward, giving customers a narrow window before the new pricing kicks in.
QCOM stock entered Friday already under pressure from broader semiconductor market concerns. The 2.42% drop on the news added to recent volatility in the stock.
With earnings just days away on July 29, investors will be watching closely for more detail on the company’s cost pressures and whether margins held up last quarter.
The post Qualcomm (QCOM) Stock Falls as Company Warns of Double-Digit Price Hikes appeared first on CoinCentral.
