Qualcomm warns of Snapdragon chip shortage

 

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By Ændrew Rininsland

Posted on 19 Apr 2012 at 17:48

Qualcomm is running out of its mobile Snapdragon processors, the chip maker said.

The company told investors that its subcontractor TSMC wasn't able to keep up with industry demand for the 28nm mobile processor, used in tablets and smartphones.

“We have taken [the] approach to spread the supply across all of the customers as best we can, and so I think everybody is dealing with this issue,” said Qualcomm president and COO Steven Mollenkopf in a conference call to investors. “We're really focused very much on getting additional supply throughout the year.”

While Qualcomm is telling manufacturers use its Fusion 2 lineup instead, it suspects some customers will move to competitors.

“In any constrained environment, people look for any alternative they can in order to solve the problem,” said Mollenkopf. “We do expect to see some alternative non-Qualcomm chipsets being used to solve that issue.”

Mollenkopf added that Qualcomm was working to bring on additional sources and that the company was hoping to ramp supply through latter part of the year to ensure demand was met in time for the December shopping season.

Positive side

“On the positive side for Qualcomm, this isn’t just an issue of the supply not being there, it’s that demand for these products is very strong,” said Gartner research director Jon Erensen. “For Qualcomm, it’s about trying to keep these customers happy and give them alternatives, and then to keep them around so that when they start to ramp up, they have the supply that they need towards the end of the third quarter this year and into the fourth quarter.”

According to Erensen, the question for phone makers right now is where to focus efforts given the chip shortage.

“It depends on the customer — it’s certainly not the ideal situation,” he said. “The question is for other designs. Do you ramp up and put more volume behind other models that use other processors — from Qualcomm and potentially Qualcomm’s competitors — where the supply issues aren’t there?”