Chip shortages affecting Qualcomm's ability to produce Android processors

Credit: Qualcomm

Demand for Qualcomm chips have soared in 2021 as Android makers close in on market share left by Huawei in the wake of U.S. sanctions. However, Qualcomm is finding it hard to meet the demand, partly because of a shortage of subcomponents used in its application processors.

Because of that, Samsung is currently experiencing a shortage of Snapdragon chips, according to Reuters. That could impact production of mid- and low-end Samsung models, though another source said there was also supply concerns surrounding Qualcomm's new Snapdragon 888 processor.

A senior executive at a top contract manufacturer for several major smartphone brands told Reuters it is also facing shortages of critical components from Qualcomm, and could cut handset shipments in 2021.

The global processor shortage has been ongoing for several months. It first hit the automotive industry and has now spread to the consumer electronics market. In February, Xiaomi vice president Lu Weibing said that the situation is "not a shortage, it's an extreme shortage."

Back in February, President Joe Biden took steps to boost the U.S. manufacturing of silicon to strengthen the international supply chain and mitigate the global shortages.

For the most part, the supply situation is only affected Qualcomm's older processor technologies because it's currently directing resources toward newer silicon options. The shortage is also driving up the price of specific chip components.

At this point, Qualcomm's supply troubles will likely have little effect on Apple. Although the Cupertino tech giant uses Qualcomm modems in its iPhone lineup, it designs and develops its own A-series chips that are produced by third-party contract manufacturer TSMC.

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