By Arsheeya Bajwa and Stephen Nellis
Feb 4 (Reuters) – Chip supplier Qualcomm forecast second-quarter revenue and profit below Wall Street estimates on Wednesday, expecting a global memory supply shortage to hit mobile phone sales.
The results from San Diego, California-based Qualcomm come at a time when global electronics supply chains are grappling with an acute shortage of memory chips – an essential fixture across devices from smartphones to data centers.
Qualcomm shares were down 9% in after-hours trading after the results. The company’s shares have fallen over 11% so far this year as Wall Street mulls market-share losses and the impact of sky-rocketing memory prices.
In an interview with Reuters, Qualcomm CEO Cristiano Amon said that the entire forecast miss was due to a memory chip shortage hitting Qualcomm’s smartphone customers.
“I’m very happy with the business – I just wish we had more memory,” Amon said. “Everything is basically OEMs, especially in China, bringing down their inventory levels to adjust to their memory supply,” Amon said.
The company expects revenue between $10.2 billion and $11 billion for the second quarter, compared with analysts’ average estimate of $11.12 billion, according to LSEG data.
It also forecast adjusted current-quarter earnings between $2.45 and $2.65 per share, compared with estimates of profit of $2.89.
“As with other companies producing chips for devices, Qualcomm’s expecting to be impacted by the worldwide memory crunch for the next several quarters, particularly via some of its Chinese customers, and that’s hurting their near-term outlook,” said Bob O’Donnell, chief analyst at TECHnalysis Research.
Qualcomm is among the largest smartphone chip providers in the world, counting major Android players and iPhone-maker Apple among its customers, with its financial results seen as an important indicator of demand-supply dynamics in the personal electronics semiconductor industry.
Global shipments of advanced smartphone chips are expected to decline 7% in 2026, partially due to rising memory prices, according to data from Counterpoint Research.
Within Qualcomm’s chip segment, sales of smartphone semiconductors in the December quarter stood at $7.82 billion, missing Visible Alpha estimates of $7.87 billion.
The company expects mobile phone chips to generate about $6 billion in sales in the second quarter, CFO Akash Palkhiwala said on a post-earnings call. This is below a Visible Alpha estimate of $6.85 billion.
However, at the same time, Counterpoint data shows that smartphone chip revenues are expected to grow in double-digit percentages this year driven by premier-tier demand.
Amon said that one factor helping Qualcomm’s chips is that its chips tend to go into the highest-priced Android devices on the market, whose sales have a better chance of withstanding memory price increases.
“OEMs are going to prioritize memory availability to the most profitable segments, which are the premium tier for them and the high tier for them,” Amon said.
In Qualcomm’s chip segment, the company forecast fiscal second-quarter sales with a midpoint of $9.1 billion, compared with analyst estimates of $9.60 billion.
UPCOMING DATA CENTER BUSINESS NOT HIT BY MEMORY SHORTAGE
Qualcomm has also been grappling with some of its largest customers – Apple and Samsung – increasingly developing in-house chips while competition against MediaTek in the Android space intensifies.
In an effort to diversify its business and reduce dependence on a handful of smartphone providers, Qualcomm has been expanding into areas such as personal computers, automotive and data centers.
The company has announced a new series of AI data center chips, saying that Humain, an AI firm founded by Saudi Arabia’s sovereign wealth fund, will be a customer.
Amon told Reuters on Wednesday that he does not expect the global memory shortage to affect the rollout of Qualcomm’s AI chips for data centers, which is expected in the second half of this year with meaningful revenue in the firm’s fiscal 2027.
For the fiscal first quarter ended December 28, 2025, Qualcomm reported revenue of $12.25 billion, beating estimates of $12.21 billion, according to LSEG data. Its quarterly adjusted profit of $3.50 per share also beat estimates.
In the December quarter, Qualcomm reported chip revenues of $10.61 billion, coming in just above estimates of $10.60 billion.
Within the segment, Automotive sales of $1.10 billion came in above Visible Alpha estimates while “Internet of Things” revenues were in line with expectations.
(Reporting by Arsheeya Bajwa in Bengaluru and Stephen Nellis; editing by Diane Craft)
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