Storage chip shortage affects mobile phone supply chain; Qualcomm and Arm's performance guidance unsettles the market

Glonghui, February 5th｜The share prices of Qualcomm and Arm plunged sharply after the release of their quarterly earnings reports, mainly due to market concerns that a shortage of memory chips will suppress growth in the electronics industry. In after-hours trading on Wednesday night, both companies saw their stock prices drop by more than 8%. Qualcomm is the largest manufacturer of smartphone processors, while Arm mainly relies on royalties from the mobile phone industry. Management from both companies signaled that memory chip supply constraints will limit smartphone production. Currently, the unprecedented expansion of artificial intelligence infrastructure is causing a shortage of memory chips, as these components help computers manage data. Manufacturers are now focusing their capacity on supplying AI data centers, resulting in insufficient production capacity for mobile phone components. This means that the number of products ultimately reaching consumers will decrease, and prices will be higher. Other companies have also sounded the alarm about the memory chip shortage. MediaTek stated in a conference call this week that the situation is "evolving." Intel's CEO said the shortage could last for years, with suppliers telling him that the situation may not improve until 2028.