Qualcomm this week warned that demand for its 28-nanometer Snapdragon processors used in a variety of mobile phones is outstripping supply and the problem might not get corrected until the end of the year.
The semiconductor firm told analysts during an earnings call that Snapdragon shipments had grown more than 70 percent year-over-year. There are now more than 370 announced Snapdragon-based mobile devices—including more than 150 which use Qualcomm's latest dual-core Snapdragon S4 chips—but the company indicated that some of those devices may wind up with chipsets from rival companies due to the supply constraints.
"As you know, we have made significant investments in recent years to establish a leadership position in LTE chipsets, and we believe we are succeeding," said Steven Mollenkopf, Qualcomm's president and chief operating officer. "In parallel, industry adoption of LTE technology is growing rapidly. And with our strong portfolio of products, we are at the forefront of this technology transition.
"As a result of these trends and as [Qaulcomm chairman and chief executive] Paul [Jacobs] mentioned, demand for our 28-nanometer chipsets continues to exceed available supply. To address 28-nanometer demand, we are increasing our related operating expenses and are working closely with our fab partners to bring up additional capacity."
Mollenkopf said the company was actively looking for other manufacturers with the capacity to supplement Snapdragon production from its main fab partner, Taiwan Semiconductor Manufacturing Company (TSMC). Qualcomm was also trying to support device makers with its own alternatives to desired Snapdragon chipsets that were in short supply, but the COO admitted that this would not completely solve the problem.
"[W]e've been helping customers to see how they can swap in our Fusion 2 chipset, which is the chipset that we have been ramping over the last eight months in production," Mollenkopf said. "Now in some cases also, our OEM partners are, of course, working with us very closely to try to help us accelerate our own supply, and that is primarily what we're seeing. And we do expect to see some alternative non-Qualcomm chipsets being used to solve that issue as well."
Among the OEMs who in recent months have announced Android and Windows devices powered by dual-core Snapdragon S4 chips are Asus, HTC, Huawei, Lenovo, and Panasonic. Qualcomm will also release quad-core S4 processors later in the year.
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