Technology

Global chip shortage is reportedly affecting phones as Qualcomm struggles to meet demand

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Why it matters: We know the global semiconductor shortage has been affecting everything from PC hardware and gaming consoles to automakers, but the smartphone industry appears to have escaped the worst of the crisis. However, according to new reports, Qualcomm is struggling to meet demand for its chips, including the flagship Snapdragon 888 found in most of today’s premium handsets.

Reuters reports that Samsung is experiencing a shortage of Qualcomm’s SoCs, which is mainly affecting the South Korean company’s low- to mid-range models. A different supplier said there is also a shortage of Snapdragon 888 chips found in the Galaxy S21 series, but it’s unclear whether this has affected the manufacturing of the flagship line.

The publication reports that “a senior executive at a top contract manufacturer for several major smartphone brands” said it was facing a shortage of Qualcomm components and would be forced to slash handset shipments this year as a result.

Lu Weibing, a vice president for Chinese handset maker Xiaomi, wrote, “It’s not a shortage, it’s an extreme shortage,” on Chinese social network Weibo last month.

Earlier this month, we heard the winter storm that hit Texas had forced several chip makers in the area to shut their plants temporarily, resulting in weeks-long delays before production reaches normal levels. One of the affected factories belongs to Samsung Electronics, the company’s chipmaking arm, which makes some of Qualcomm’s radio frequency transceivers and parts of the Snapdragon 888.

The semiconductor shortage is dominating headlines right now. It was recently reported that TSMC auctioned off excess wafer capacity at a 15 – 20 percent premium, while the Biden administration is taking steps to address the problem.

There were fears that a drought in Taiwan could exacerbate the chip shortage issues, given how much water fabs require every day, but the country says its TSMC-led semiconductor industry has enough to last until May. Qualcomm’s incoming CEO believes the worst of the crisis will be over later this year, though some think it will last well into 2022.

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