Qualcomm shares plunge on restricted chip supply

Shares of Qualcomm Inc dropped 7.6% during their after-hours trade on Wednesday. The decline was mainly from the company’s struggling sales growth as restrictions seen in semiconductor supply heavily dragged the sector.

For the fiscal first quarter ended Dec. 27, the company’s sales reached $8.24 billion, with its adjusted profit advancing $2.17 per share. While sales placed lower than the $8.27 million forecast expected by analysts, its profit still came larger than the initial estimate of $2.10 per share, data from Refinitiv showed.

The weak performance came as chip shortages prompted automakers to reduce production. This drastically affected Qualcomm as it works with some of the same chip contract manufacturers. Moreover, the chip provider expects this restriction to persist through the first half of 2021.