It seems to be like the huge international semiconductor scarcity is lastly going to hit the smartphone business in full pressure, and the most important identify that’s going to really feel the warmth is Qualcomm. As per a Reuters report, Qualcomm is having a tough time making an attempt to satisfy the demand for its cell processors, particularly the flagship Snapdragon 888 SoC that powers some high-profile telephones such because the Samsung Galaxy S21 sequence.
Nonetheless, Qualcomm’s issues are additionally intertwined with Samsung, because the Korean electronics big’s chipmaking division is accountable for supplying some key components to Qualcomm. Plus, the 5nm fabrication course of on which the Snapdragon 888 relies on, comes with scalability limitations of its personal. Moreover, Samsung’s manufacturing facility in Texas that makes parts reminiscent of radio frequency transceivers for Qualcomm was hit by an outage as a consequence of snowstorms within the area lately.
The HUAWEI issue
One more reason why the demand for Qualcomm’s chips has abruptly gone by way of the roof is the misfortunes of HUAWEI. As extra persons are transferring away from HUAWEI smartphones – since they not provide entry to important Google companies reminiscent of Gmail, Maps, and Play Shops – the demand for Android telephones powered by Qualcomm chips has gone up. And that’s as a result of HUAWEI geared up a number of its telephones, particularly the flagships, with its personal HiSilicon Kirin household of processors.
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And now that these telephones are not a pretty choice for a lot of patrons, the demand for telephones pushed by Qualcomm (and MediaTek) chips has abruptly skilled a surge. Within the high-end phase, this has immediately put a pressure on the availability of Snapdragon 888 SoC that powers flagships from Samsung and different Chinese language manufacturers reminiscent of OPPO and Xiaomi, all of which try to fill the void left by HUAWEI.
A tightly-knit provide chain can be accountable right here
Qualcomm’s new CEO appointee Christiano Amon lately advised traders that the demand it’s experiencing for processors outweighs the availability. Nonetheless, the scarcity just isn’t reliant on a single issue, however the entire semiconductor business as a complete through which the shortage of 1 element disturbs the equilibrium – the results of a tightly built-in international provide chain.
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For instance, Qualcomm’s processors make use of energy administration chips, however owing to the scarcity, the corporate is transferring the inventory of those chips in the direction of the manufacturing of its flagship Snapdragon 888 SoC. Whereas the technique is sound from a monetary perspective, it has negatively affected the manufacturing of Qualcomm’s low-end and mid-range smartphone processors.
Nonetheless, the scenario won’t enhance within the rapid future. And that’s as a result of the semiconductor scarcity has additionally catalyzed panic shopping for and the costs have additionally skyrocketed for sure parts. And given how the availability chain responds to such lopsided adjustments, the entire business – together with the area of smartphones – must address the scarcity.
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