I just noticed that Qualcomm's latest earnings report is quite interesting. Quarterly revenue hit a record high of $12.3 billion, with automotive chips surpassing $1 billion for two consecutive quarters—looking very impressive. But then Wall Street slapped it back, and the stock price plummeted 9% after hours. The only reason? Memory shortages.

Qualcomm CEO Cristiano Amon was very straightforward: "I'm very satisfied with the business; I just wish there was more memory." The second-quarter guidance was cut from $11.12 billion to a range of $10.2 billion to $11 billion, and earnings per share also fell short of expectations, all due to tight memory supply and soaring prices.

The biggest impact was on smartphone manufacturers. Chinese brands, Japanese brands, and Korean manufacturers are all reducing inventory because memory costs are too high. Phone brands prefer to order less rather than get locked into high costs. Naturally, Qualcomm’s processor demand also declined accordingly.

Interestingly, high-end smartphones have become a safe haven. Because memory is expensive, manufacturers prioritize allocating resources to flagship models with the highest profit margins. Qualcomm’s chips are mainly used in these premium devices, so they are actually more resilient to declines.

From a broader perspective, Qualcomm’s earnings warning actually reflects the awkward situation facing the entire industry. AI smartphones and AI PCs are demanding more and more memory, while HBM capacity is squeezing out standard DRAM, leading to a complete supply chain imbalance. In the short term, mobile chip business will be affected by inventory adjustments, but Qualcomm is clearly preparing for the future—record-breaking automotive revenue, recently acquiring Alphawave Semi to enter the data center market. These moves are all reducing dependence on the mobile business.

So, this memory crisis might actually accelerate Qualcomm’s diversification efforts.