We have already seen the global chip shortage affecting cars, computers and consoles. Next, Qualcomm? A new report from Reuters collects many quotes from the mobile industry that all say, “Yeah, we’re running out of chips.”
Qualcomm has a lot against it right now. First, like everyone else in the electronics industry, the pandemic increased the demand for all kinds of work-at-home gadgets and entertainment products, while also occasionally forcing the closure of the factories that make these items.
In addition, Qualcomm is facing increased demand due to ongoing sanctions against Huawei. Huawei’s HiSilicon division has been one of Qualcomm’s few Android SoC competitors (along with Samsung’s Exynos line), and Huawei has long worked to remove all US chips from its supply chain. The US sanctions against Huawei have prevented it from getting a steady supply of chips and its market share has plummeted (even in China). The companies settling on Huawei’s old premises are all mainly Qualcomm houses that have no problem shipping US chips, so demand has increased.
Qualcomm’s third problem is the weather in Texas. A record cold in February left the state’s power grid down for several days, and one of the many victims was a Samsung Electronics foundry in Austin. The foundry produces $3.7 billion worth of chips annually and counts Qualcomm and Tesla among its largest customers. However, thanks to the power outage, the plant has been down since February 16 and is expected to remain in place until mid-April. Reuters says it’s unclear whether this additional issue has already affected smartphone production.
Reporting to Samsung’s phone division, the report said: “One person at a Samsung supplier said a shortage of Qualcomm chips affected production of mid-range and low-end Samsung models. The second person, at a different supplier, said There was a shortage of Qualcomm’s new flagship chip, the Snapdragon 888, but did not say whether this would affect production of Samsung’s high-end phones.” Samsung warned in January about a shortage of smartphone chips.
Subsequently, Reuters spoke to “a senior executive at a top contract manufacturer for several major smartphone brands” (I’m guessing and call this company “Foxconn”) and wrote that this anonymous company “was short of a range of components from Qualcomm and would start shipping this year.” of handsets.”
Xiaomi has also agreed with Vice President Lu Weibing who wrote about Sina Weibo last month: “It’s not a deficit, it’s an extreme deficit.”
Since everyone in the mobile industry knows there will be a shortage, the result is the mobile equivalent of hoarding toilet paper. The Reuter report says that “panic buying” has gripped the industry, and that “the cost of even the cheapest components of almost all microchips is driving up”. Simon Wan, co-founder of the robot vacuum cleaner company Roborock, told Reuters: “Everyone is placing orders like crazy when in fact they can’t even use all their chips.”