Qualcomm to Raise Prices on All Chips Starting September 1, Double-Digit Increases Expected

Qualcomm has announced that it will raise the prices of all its processors starting September 1, 2026. The company’s CEO, Cristiano Amon, confirmed the move in an interview with CNBC on July 29, stating that “prices are going up.” This development was first reported by Stevie Bonifield of The Verge. Speculation last week suggested that the price hike could reach “double-digit percentages.”

Reasons Behind the Price Hike

The immediate trigger for the announcement was the release of Qualcomm’s financial results for the second quarter of 2026. The company reported a 20% year-on-year decline in revenue from its handset business, marking the lowest level since 2021. In its quarterly presentation, Qualcomm attributed the drop to “unprecedented increases in memory prices and supply constraints.”

The surge in memory prices—dubbed “RAMageddon”—has driven up the costs of all kinds of electronic devices, from gaming consoles to laptops and even Raspberry Pi boards. To maintain its profit margins, Qualcomm has opted to address this challenge by raising the prices of its processors.

Reduced Apple Business

Another factor contributing to Qualcomm’s revenue decline is its reduced supply of modem chips to Apple. The company expects its share of modems for the next iPhone to “sharply decline,” forecasting an acceleration in revenue decreases from Apple products. Apple is believed to be transitioning to its own in-house modem chips, making Qualcomm’s reliance on Apple unsustainable.

However, Qualcomm’s management expressed confidence during two separate earnings calls that other business sectors would compensate for the decline in handset revenue.

Strategy for Business Diversification

Qualcomm plans to pivot its business structure toward three core areas: handsets, data centers, and automotive. CEO Amon stated that the revenue share from handsets will “soon drop to half” and set a goal for smartphone-related revenue to account for just one-third of the company’s total by 2029. Growth in the data center and automotive sectors is expected to drive this transition.

In fact, Qualcomm announced a 10-year chip supply agreement with BMW on July 29. In the data center space, the company’s AI accelerator, the “HBC (Hybrid Bonded Compute),” is gaining attention. As detailed in our previous coverage, “Qualcomm’s AI Accelerator ‘HBC’ with Compute Under DRAM,” the HBC architecture addresses data transfer bottlenecks by positioning compute circuits directly beneath memory stacks.

Changes in OEM Procurement Strategies

In response to the price increases, changes are also emerging in the behavior of OEMs (Original Equipment Manufacturers). Qualcomm’s CFO and COO, Akash Palkhiwala, noted that some OEMs are beginning to adopt older generations of Qualcomm chips as a cost-saving measure.

This shift could lead smartphone manufacturers to opt for previous-generation Snapdragon 8 or 7 series chips rather than the latest flagship SoCs. Particularly in the highly competitive Chinese market, where passing on rising component costs to product prices is challenging, such alternative strategies are expected to gain momentum.

Impact on the Industry

Qualcomm’s price hikes are poised to impact the overall pricing structure of the smartphone market. With rising memory prices coupled with increased processor costs, smartphone prices are expected to climb significantly from late 2026 into 2027. High-end models equipped with Qualcomm’s flagship chips will likely see the most pronounced price hikes.

At the same time, the move could prompt a shift toward competing options such as MediaTek, Samsung Exynos, or Apple’s in-house chips. Qualcomm’s strategy to reduce dependence on its smartphone business is expected to stabilize its business portfolio in the long term.

Editorial Opinion

In the short term, the average selling price of smartphones is expected to rise noticeably from the fourth quarter of 2026 through early 2027. Android flagship devices featuring Qualcomm’s Snapdragon 8 series will be directly impacted by the price hikes. OEMs may struggle to absorb the increased component costs, making price hikes for consumers inevitable. Additionally, the increased adoption of older-generation chips may result in stagnation in the performance improvements of entry- to mid-range devices.

In the medium to long term, Qualcomm’s transformation of its business structure will be closely watched. The goal of reducing smartphone revenue to one-third of total revenue by 2029 hinges on the market penetration of its AI accelerator “HBC” and the expansion of automotive chip orders, including its deal with BMW. While it remains uncertain whether the HBC can compete with NVIDIA and AMD in the data center accelerator market, Qualcomm’s expertise in low-power designs could serve as a differentiator. Simultaneously, if Apple completes its transition to in-house modems, Qualcomm’s handset business faces further contraction risks.

References

• “Qualcomm is raising phone chip prices starting September 1st”, by Stevie Bonifield — The Verge, 2026-07-29T21:41:56.000Z (ARR)
• Source URL: https://www.theverge.com/tech/972894/qualcomm-price-hikes-q2-2026-earnings