Emir BardakçıShares of semiconductor giants Qualcomm and Arm plummeted more than 8% in after-hours trading following a sobering revelation in their quarterly earnings: the mobile phone industry is hitting a hard ceiling, not due to lack of demand, but due to a severe shortage of memory chips.
The Core Cause: AI vs. Mobile
The root of th e crisis lies in the unprecedented expansion of Artificial Intelligence infrastructure.
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Capacity Shift: The world’s three largest memory manufacturers—Samsung Electronics, SK Hynix, and Micron—are aggressively diverting production capacity toward High-Bandwidth Memory (HBM) chips, which are essential for AI data centers.
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The Squeeze: This strategic pivot has significantly reduced the manufacturing capacity available for standard mobile DRAM and NAND flash. As a result, fewer smartphone components are being produced, leading to reduced handset availability and higher prices for consumers.
Industry Voices & Warnings
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Qualcomm (Cristiano Amon): The CEO bluntly stated that memory shortages will determine the “overall upper limit” of the global smartphone market this year. He revealed that Chinese OEMs have already signaled that their actual production volumes will be lower than originally planned due to the inability to source sufficient memory.
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Intel (Li-Wu Chen): The outlook is grim, with Intel leadership suggesting the shortage shows “no signs of easing” and could persist until 2028.
The Silver Lining: High-End Prioritization
Despite the volume constraints, there is a strategic shift protecting revenue. Smartphone manufacturers are prioritizing the production of high-end flagship models over budget devices to maximize margins on the limited memory supply available. This mix-shift benefits Qualcomm (selling premium Snapdragons) and Arm (higher royalty fees per unit), offering a glimmer of hope amidst the manufacturing crisis.
