Qualcomm warns rising memory prices are hurting phone sales: what it means for phone prices

The memory chip shortage is now showing up in the results of one of the biggest phone chip makers. Qualcomm, which supplies chips for many Android phones, reported its latest quarter this week and warned that rising memory prices are hurting smartphone demand. Its shares fell sharply, and the news matters if you plan to buy a phone soon.

What did Qualcomm report?

• Revenue: about $9.9 billion, above the roughly $9.67 billion analysts expected.
• Adjusted earnings per share: $2.21, just below the $2.23 expected.
• Forecast: adjusted earnings of $2.05 to $2.25 per share for the next quarter, well below the $2.36 analysts were looking for.
• Phones: Qualcomm said it expects its Android handset chip revenue to decline about 20% in fiscal 2026, which cuts annual earnings by more than $1.50 per share.
• Cars: automotive revenue is expected to grow about 60% year over year in the next quarter, a bright spot.

The stock fell about 6% before the market opened on Thursday and slid close to 10% early in the session. One market report said it was heading for its worst day since 2020, though the broader chip sell-off, covered in our Nasdaq correction report, added to the drop.

What does memory have to do with phones?

Qualcomm makes the main processor, but phone makers must also buy memory chips (RAM and storage). AI data centers are soaking up a huge share of the world’s memory supply, which pushes prices up and leaves less for phones. Qualcomm said unprecedented memory price increases and supply limits have created a major headwind for the global smartphone market this fiscal year.

This is not new. Back in February, Qualcomm’s chief executive said the weak outlook was linked to memory availability and not weak demand, and that phone makers, especially in China, were cutting build plans. Now the effect is showing up in actual results. See our explainer on the memory shortage and whether to buy now or wait.

What does it mean for phone prices?

• Higher prices or lower specs: phone makers can raise prices, cut RAM and storage, or build fewer models.
• Budget and mid-range Android phones feel it most. They have thin margins, so extra memory costs are hard to absorb. Premium phones have more room.
• Fewer choices: some makers may reduce production plans, which could mean fewer deals.
• iPhones are not immune: early leaks about the iPhone 18e already raise the question of whether prices will rise.

What should you do?

1. If your phone works, keep it longer. A new battery or a cleanup can extend its life.
2. If you need a new one, compare last-generation models, which often cost much less and still run well.
3. Check the specs, not just the price. Make sure the RAM and storage are what you need, since makers may trim them.
4. Watch for real deals. Our Black Friday guide explains how to spot fake discounts.

Frequently asked questions

Why did Qualcomm’s stock fall?

It gave a weaker-than-expected earnings forecast and warned that high memory prices are hurting phone sales, even though its revenue beat expectations.

Will phones get more expensive?

Memory costs are pushing prices up, and budget and mid-range Android phones are likely to feel it most. Prices vary by brand and country.

How long will the memory shortage last?

SK Hynix says demand will outpace supply through 2030, while some other forecasts expect an easing around 2028.

Does this affect only Android phones?

Qualcomm’s warning is about Android handsets, but memory costs affect all phone makers, including Apple.

Sources

• Rising memory costs are hurting smartphones, Qualcomm warns (Benzinga via Webull)
• AI and chip stocks plunge in broad selloff, with Qualcomm facing worst day since 2020 (Seeking Alpha)
• Tech pressure persists but broader market climbs (Schwab)
• Qualcomm stock tumbles on weak guidance following global memory shortage (TIKR)