It hasn't gone unnoticed by the broader market that Shares of Qualcomm (NASDAQ:QCOM) fell sharply in early February, coinciding with a noticeable shift in retail investor sentiment on platforms like Reddit and X from cautiously optimistic to decidedly bearish. The chipmaker reported Q1 revenue of $12.3 billion, a record for the quarter, yet the stock has tumbled 18% year-to-date. The disconnect stems from weak forward guidance, driven by a global memory chip shortage that's constraining smartphone manufacturers and forcing them to scale back production plans.
Stock prices jump as demand continues Shares in several memory chip makers traded on U.S. markets are currently up in premarket trading this morning. The companies include Micron and Sandisk, as well as Western Digital Corporation (Nasdaq: WDC) and Seagate Technology Holdings (Nasdaq: STX). As of this writing, Micron shares are currently up 2.9%, Sandisk shares are up 6.2%, Western Digital shares are up 3%, and Seagate shares are up 2.5%.
The ongoing memory chip shortage is about to lead to a drastic drop in smartphone shipments this year. According to the latest forecast from TrendForce, the market will see a 10% drop in global smartphone shipments, which would result in an estimated 1.135 billion units shipped for the calendar year. There is, however, an even worse turn of events, which could see the drop go as low as 15%, which TrendForce describes as the "Bear-case scenario".
The increasing demand for AI among tech companies is one of the reasons why the global shortage of memory chips remains an ongoing issue. And while it's expected to adversely affect the production of smartphones, Samsung Electronics co-CEO T M Roh has warned that TVs and home appliances may also be hit by shortages and increased prices. "As this situation is unprecedented, no company is immune to its impact," said Roh via Reuters.
