Reuters reports Qualcomm Inc (NASDAQ: QCOM) is struggling to keep up with the demand for its smartphone and gadget processor chips as the auto chip crisis extended to the electronics business,
Smartphone manufacturer Samsung Electronics is plagued by Qualcomm’s application processor crisis which formed the heart of smartphones. Qualcomm chip crisis impacted the production of mid-and low-end Samsung models.
Demand for Qualcomm’s chips has climbed in the past months as customers abandoned phones produced by Huawei Technologies Co Ltd due to the U.S. trade war.
Qualcomm has found it hard to fulfill the abnormal demand surge partly due to a chip subcomponent crisis. It also faced a shortage for its new flagship chip, the Snapdragon 888. Interestingly, the company expected to accomplish the Q2 sales forecast provided in February.
However, a top smartphone contract manufacturer admitted a crisis regarding a range of Qualcomm components, followed by a potential cut in handset shipments in 2021.
Key parts of Qualcomm’s Snapdragon 888 processors were produced by Samsung’s separate chipmaking division utilizing a five-nanometer manufacturing process that is hard to scale quickly.
A Texas Samsung factory that manufactured some of Qualcomm’s radio frequency transceivers was forced to halt operations last month due to power shortages caused by winter storms whose impact is still unclear.
QCOM shares fell $1.96, or 1.5%, to $129.78.
