"But he quickly turned pessimistic by warning "In the coming quarters, the handset industry will be constrained by the availability and pricing of memory, particularly DRAM." Those constraints, he said, stem entirely from memory-makers prioritizing memory for AI datacenters and reducing the amount of other memory they make. The laws of supply and demand have kicked in, sending the price of DRAM soaring."
"Amon said "several" handset-makers, especially in China, are therefore "taking a cautious approach in reducing their chipset inventory." CFO Akash Palkhiwala said that caution means Qualcomm's smartphone customers have "scaled-back expectations for build plans" and will make fewer devices, which means lower sales for Qualcomm. The news isn't all bad, because caution among smartphone-makers doesn't reflect lower demand for their devices."
"But this mess will hurt in the short term, because Qualcomm predicted Q2 revenue will be $10.2 billion to $11 billion, nasty numbers given the company won $11 billion of revenue in Q2 last year. $6.9 billion of that came from selling chips for handsets. This year, the company thinks that figure for Q2 will be $6 billion."
Qualcomm reported a record $12.3 billion in Q1 revenue driven by premium smartphone sales and growth in smart glasses, automotive, and IoT products. The company warned that rising DRAM prices and memory-makers prioritizing AI datacenter demand are constraining memory availability for handsets. Several handset manufacturers, particularly in China, are reducing chipset inventories and scaling back build plans, which will lower Qualcomm's handset-related sales in the short term. Qualcomm forecast Q2 revenue of $10.2–$11 billion and expects handset chip revenue around $6 billion, down from $6.9 billion a year earlier. Qualcomm expects the issue to be temporary and sees longer-term resilience.
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