Qualcomm's revenue dips 4%, profit plunges 25% — and chip prices are going up

Qualcomm just reported its fiscal 2026 third-quarter earnings, and the numbers are mixed. Revenue came in at $9.947 billion, down 4% year over year, while net income dropped 25% to $2.002 billion. Revenue slightly beat expectations, but adjusted earnings per share missed the mark.

The mobile chip business continues to drag things down. Handset chip revenue fell to $5.086 billion, a 20% decline — the lowest since 2021. Automotive revenue jumped 61% to $1.588 billion, and IoT revenue grew 9% to $1.83 billion, but neither was enough to offset the slump in smartphones.

Costs for wafer fabrication, packaging, testing, and memory are all going up. Starting September 1st, Qualcomm will raise chip prices, with specific increases negotiated per customer. Some reports suggest certain products could see double-digit percentage hikes.

Qualcomm also warned that its modems will make up a much smaller share of the next iPhone than the previously estimated 20%. The company's profit guidance for next quarter came in below expectations, and shares fell more than 4% in after-hours trading following the report.