Qualcomm (a global semiconductor company in the US) and Arm Holdings (a processor design company based in the UK) are facing increasingly obvious negative impacts from global memory shortages, amid smartphone sales continuing to decline.
Business leaders and analysts warn that the memory supply crisis could last until 2027, putting long-term pressure on the semiconductor and consumer electronics industries.
In its latest financial report, Qualcomm admitted that it is directly affected by customers not being able to ensure enough memory capacity to complete products. As a result, orders fell, forcing the company to lower its current quarterly revenue forecast below market expectations.
The memory shortage across the industry and rising prices may shape the overall scale of the mobile phone industry throughout this fiscal year," said Qualcomm CEO Cristiano Amon.
Mr. Amon also admitted that this is not just Qualcomm's problem, but a common difficulty for the entire smartphone supply chain.
Meanwhile, Arm Holdings' copyright revenue is at risk of declining due to slower smartphone chip sales.
Chief Financial Officer Jason Child of Arm Holdings predicts that the company's copyright revenue in the coming year may decrease by about 2% due to the impact of the memory crisis.
The reaction of the financial market shows the level of investor concern. Qualcomm shares fell nearly 10% in the trading session after closing, while Arm Holdings shares fell about 8%, reflecting a pessimistic sentiment about the short-term prospects of the two companies.
According to analysts from Morningstar (a reputable global investment research and rating company) and JP Morgan (the world's leading banking and investment group specializing in analyzing, forecasting and leading global financial trends), the memory supply shortage is likely to last until the end of 2027.
Data from global market research company Counterpoint Research shows that the amount of advanced smartphone chips shipped globally is expected to decrease by about 7% by 2026, partly due to sharply increased memory costs. This trend may also weaken the overall outlook for the consumer electronics industry.
Analyst Zavier Wong of eToro (a global online financial and investment trading platform), said that Qualcomm's disappointing business results largely reflect the general trend of the industry, rather than internal problems.
According to Mr. Wong, Qualcomm is facing similar memory limitations to other links in the smartphone supply chain.
Faced with the slowing growth of the mobile market, both Qualcomm and Arm are striving to reduce dependence on the smartphone chip segment by expanding into sectors with higher profit margins, especially data centers and artificial intelligence (AI).
Mr. Cristiano Amon said that Qualcomm does not expect the global memory shortage to affect the AI chip deployment plan for data centers.
The company is expected to launch a new AI chip line in the second half of this year, with significant revenue expected to be recorded from fiscal year 2027.
Observers assess that in the context of a saturated smartphone market and a supply chain facing many risks, adaptability and expansion to new fields will determine the long-term competitiveness of semiconductor giants such as Qualcomm and Arm Holdings.
