Recently, global chip giant Qualcomm officially announced a new round of price adjustments for its product line. Effective September 1st, the entire series of chip products will see double-digit percentage price increases, with the new flagship Snapdragon 8 Elite Gen 6 Pro seeing the highest increase of up to 18%.
Following MediaTek's announcement of price hikes for its Dimensity series chips in late June, Qualcomm has now followed suit. This brings a new wave of cost pressure to the already strained mobile terminal industry.
It is reported that Qualcomm issued price increase notifications to global customers on July 24th local time. The new prices will uniformly apply to all chip products shipped after September 1st, covering multiple product lines including smartphones, tablets, wearables, and automotive chips. Qualcomm CEO Cristiano Amon confirmed the adjustment plan during the earnings call, stating that the core reason for the price increase is to hedge against rising costs across the entire industry chain, repair the company's declining gross margin, and drive profitability back to historical normal levels.
Data shows that Qualcomm's Q3 FY2026 revenue was $9.947 billion, a year-over-year increase of 4%, but net profit plummeted by 25% YoY. Revenue from the mobile handset business plunged by 20% YoY, hitting the lowest record since 2021. The main reason cited is industry-wide price increases triggered by the AI boom.
As demand for AI computing power surges, memory manufacturers like Samsung and SK Hynix have significantly increased production capacity for HBM memory, leading to an imbalance in the supply and demand for general-purpose memory chips.
According to data from TrendForce, general-purpose DRAM contract prices increased by 93%-98% quarter-over-quarter in Q1 2026, while NAND Flash contract prices rose by 55%-60% QoQ. The share of memory costs in mobile phone material costs has skyrocketed from 10%-15% to over 30%. At the same time, the wafer cost for TSMC's 2nm advanced process has exceeded $30,000, coupled with a price increase of over 20% for advanced packaging, pushing chip costs to a historical high.
The cost pressures on chip giants have ultimately been passed down to downstream smartphone manufacturers, trapping the industry in a vicious cycle.
Previously, continuous price increases for memory chips had already squeezed the profit margins of terminal manufacturers. To control costs, brands like Xiaomi, OPPO, and vivo have significantly reduced orders for mid-range and low-end models in 2026, with cuts up to 20%. Some manufacturers are also compressing costs by simplifying hardware configurations and even resorting to using older-generation chips.
Reportedly, the Snapdragon 8 Gen 5 Ultimate Edition (SD 8E5) released last September has "been forced" to become a long-lasting workhorse chip. Qualcomm is set to release a downclocked version specifically for sub-brand iterative new models in the second half of this year, offering performance not inferior to the standard SD 8E5 but at a price significantly lower than the concurrently released SD 8E6.
Under heavy cost pressure, the Android smartphone market continues to be sluggish. IDC data shows that domestic smartphone shipments in Q2 2026 fell by 4.3% year-over-year, marking five consecutive quarters of decline. The market shares of major Android brands like OPPO, vivo, Xiaomi, and Honor have all dropped significantly. In contrast, Huawei and Apple, which do not rely on external high-end SoC chips, have seen noticeable growth in market share, leveraging their advantages in self-developed chips and stable pricing.
Compared to smartphone manufacturers, Qualcomm could potentially pass on cost pressures even without raising prices.
Currently, Qualcomm is accelerating its business diversification transformation, focusing on new sectors like automotive, IoT, and data centers. Its automotive business has achieved 23 consecutive quarters of double-digit year-over-year growth, and it recently secured a ten-year chip supply agreement with BMW. However, the scale of these new businesses is still limited and cannot fully offset the gap left by the handset business.
Industry insiders predict that as the rising costs of chips and memory are fully reflected in the second half of the year, price increases for new Android flagship models may exceed market expectations. The decline in domestic smartphone market shipments in 2026 could further widen.
This article is sourced from the WeChat public account "镁客网", author: 镁客网
