Qualcomm cannot secure enough supply to meet the increasing demand

Apr 20, 2012 08:21 GMT  ·  By

Bad news from radio chip supplier Qualcomm who is reportedly having trouble meeting demand for smartphone chips. The company produces the LTE radio chips found in Apple’s new iPad, and the next iPhone is on track to get them as well - only not very soon, it seems.

If rumors that Apple might eventually return to its summer refresh cycle had any credibility up until now, it is becoming increasingly apparent that the next iPhone will debut sometime in fall, just like its predecessor.

Qualcomm makes the cellular chips inside Apple’s portables, and the company has encountered some hurdles in production of LTE solutions, according to Qualcomm Chief Executive Paul Jacobs.

Jacobs told analysts at a conference call yesterday, “At this stage we cannot secure enough supply to meet the increasing demand we are experiencing.”

Also interviewed yesterday, Qualcomm’s Chief Financial Officer Bill Keitel said that constraints had caused the company to increase operating expenses:

“Demand went so far ahead of availability that we’ve decided to start spending more money to get more supply as soon as possible,” he said. “Any time we can’t make a customer totally happy I’m going to worry. You don’t want to give a customer a reason to go elsewhere.”

It was reported recently that Apple was testing a prototype iPhone internally with 1GB of RAM and an A5X processor. A new iPod touch is also said to be in testing.

To be noted that Apple relies on dozens of companies to meet its demand for components in the next iPhone, and ultimately on Foxconn and Pegatron, whose hundreds of thousands of workers will assemble the phones for shipping.

For example, Samsung alone supplies the A4, A5 and A5X application chips in the current hardware, as well as the NAND Flash memory modules and the Retina display.