Qualcomm
We have already seen the global shortage of chips reaching cars, computers and consoles. Next, Qualcomm? A new report from Reuters brings together many quotes from the mobile industry that basically say, “Yes, we’re running out of chips.”
Qualcomm is working hard against it now. First, like everyone else in the electronics industry, the pandemic has increased demand for all types of household appliances and entertainment products, while occasionally forcing the factories that manufacture these items to close.
In addition, Qualcomm has to deal with rising demand thanks to ongoing sanctions against Huawei. Huawei’s HiSilicon division was one of Qualcomm’s few Android SoC competitors (along with Samsung’s Exynos line), and Huawei has been working for a long time to eliminate all American chips from its supply chain. U.S. sanctions against Huawei have made it impossible to supply chips steadily and its market share has plummeted (even in China). Companies moving to Huawei’s former land are mostly Qualcomm homes that have no problem sending US chips, so demand is high.
Qualcomm’s third problem is the weather in Texas. February’s record cold brought down the state’s power grid for several days, and one of many victims was a Samsung Electronics smelter in Austin. The smelter produces $ 3.7 billion in chips a year and has Qualcomm and Tesla among its largest customers. Thanks to the power outage, however, the plant has been shut down since February 16 and is expected to remain shut down until mid-April. Reuters says it is not clear whether this extra problem has already affected smartphone manufacturing.
The report checks with Samsung’s phone division, saying: “One person at a Samsung supplier said that the lack of Qualcomm chips was hitting production of Samsung mid-range and low-end models. The second person, at another supplier, said there was a shortage of Qualcomm’s new flagship chip, the Snapdragon 888, but did not say whether it was affecting Samsung’s next-generation phone manufacturing. “Samsung had previously warned of a shortage of smartphone chips in January.
Then Reuters spoke with “a senior executive at a contracted manufacturer of several major smartphone brands” (I will guess and call this company “Foxconn”) and wrote that this anonymous company “was experiencing a shortage of a range of components Qualcomm and would reduce handset shipments this year. “
Xiaomi also joined the conversation, with Vice President Lu Weibing writing last month at Sina Weibo: “It is not a shortage, it is an extreme shortage”.
As everyone in the furniture industry knows that a shortage is coming, the result has been the mobile equivalent of accumulating toilet paper. Reuter’s report says that “panic buying” has taken over the industry, and this is “driving up the cost of even the cheapest components in almost all microchips”. Simon Wan, co-founder of robotic vacuum cleaner company Roborock, told Reuters: “Everyone is placing orders like crazy, when in fact they can’t even use all of their chips.”