Qualcomm has warned that soaring memory prices will mean the smartphone industry will slow, news that so spooked investors they sent the company\u2019s share price sliding by 11 percent.<\/p>\n
CEO Cristiano Amon opened the chip design firm\u2019s Q1 2026 earnings call with news of $12.3 billion revenue, a company record, which he said came thanks to strong sales of premium smartphones and growing interest in smart glasses, automotive, and Internet of Things products.<\/p>\n
But he quickly turned pessimistic by warning \u201cIn the coming quarters, the handset industry will be constrained by the availability and pricing of memory, particularly DRAM.\u201d Those constraints, he said, stem entirely from memory-makers prioritizing memory for AI datacenters and reducing the amount of other memory they make. The laws of supply and demand have kicked in, sending the price of DRAM soaring.<\/p>\n
Amon said \u201cseveral\u201d handset-makers, especially in China, are therefore \u201ctaking a cautious approach in reducing their chipset inventory.\u201d<\/p>\n
CFO Akash Palkhiwala said that caution means Qualcomm\u2019s smartphone customers have \u201cscaled-back expectations for build plans\u201d and will make fewer devices, which means lower sales for Qualcomm.<\/p>\n
The news isn\u2019t all bad, because caution among smartphone-makers doesn\u2019t reflect lower demand for their devices. Instead, Amon said, it\u2019s a sign they just don\u2019t think they\u2019ll be able to source much memory and have therefore scaled back their ambitions. The CEO thinks Qualcomm won\u2019t struggle in this market over the long term.<\/p>\n
But this mess will hurt in the short term, because Qualcomm predicted Q2 revenue will be $10.2 billion to $11 billion, nasty numbers given the company won $11 billion of revenue in Q2 last year. $6.9 billion of that came from selling chips for handsets. This year, the company thinks that figure for Q2 will be $6 billion.<\/p>\n