[News] Sluggish Mobile Market, Reports of Significant Price Reduction in Qualcomm Chips

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According to a report by Taiwan’s Economic Daily, the revival of the smartphone market has fallen short of expectations. Industry sources have indicated that in order to stimulate customer demand and expedite inventory clearance, Qualcomm has recently initiated a price war, targeting mid- to- low-range 5G smartphone chips. The price reduction is substantial, ranging from 10% to 20%. It is anticipated that Qualcomm’s price reduction strategy will extend into the fourth quarter.

The consumer electronics market began to slump in the fourth quarter of last year. Downstream inventory levels began to visibly dissipate in the first half of this year, gradually returning to normal. There was optimism in the market that the Chinese smartphone market would improve in the second half of this year, and there were even reports of a slight resurgence in Qualcomm’s chip shipments during the second quarter.

However, even after China’s 618 shopping festival, the downturn in the consumer electronics market has not shown significant improvement. This has led to Qualcomm’s inventory levels rising to nearly two quarters’ worth.

With low order visibility and high inventory, the supply chain has reported that Qualcomm has recently decided to initiate a price war, primarily focusing on the mid- to low-range market segment. If the pace of inventory clearance falls short of expectations, there is a possibility of further intensifying the price reduction efforts.

Industry analysts suggest that Qualcomm’s extensive price cuts underscore the challenging situation in the mid- to low-range 5G smartphone market, where demand has been lackluster.

(Photo credit: Qualcomm)