Besides being the world’s biggest smartphone chipmaker, Qualcomm is also the number one supplier of processors for nearly all standalone VR headsets on the market today. According to a Bloomberg report, those chips could be getting a lot more expensive.
The News
According to email seen by Bloomberg sent to customer on Friday, Qualcomm is slated to raise chip prices by a percentage in the double digits, set to take effect September 1st, 2026.
Qualcomm explained in the letter that, despite its best efforts to secure alternative components from new sources, the company can no longer absorb higher costs from suppliers.
This adds to the already beleaguered RAM and storage crisis largely caused by the uptick in AI data center construction, which has seen consumer electronics skyrocket in price.
As Bloomberg points out, Taiwan Semiconductor Manufacturing Co (TSMC) has become the major chokepoint, as the it’s a major provider for outsourced chipmaking, with customers including Qualcomm, Samsung, Xiaomi, and Meta.
Outside of Apple Vision Pro, which is based on Apple-developed silicon, most standalone VR headsets rely on Qualcomm chips, including a slate of upcoming devices.
Valve’s Steam Frame is likely to be affected alongside other standalone VR headsets centered around Qualcomm SoCs, with Pico’s ‘Project Swan’ compute puck-tethered headset and undoubtedly also Meta’s next headset in the crosshairs too.
My Take
With rapidly raising component costs now including mobile processors, consumer VR is probably going to be even more difficult to price aggressively in the near future. Most worrying to me is Steam Frame, which Valve still hasn’t given a price or release date yet.
It’s impossible to say whether Qualcomm’s price hike is the main reason why this is the case, but you can bet Valve is now having to think long and hard about how to rolls out the headset, which could be any day now.
I see it going one of a few ways: Valve could eat the cost and make a little less money. Valve could raise its internal price target (again) and sell at its new expected price target. Valve could also raise the headset’s price shortly after launch with a big “sorry guys, we tried” letter to the community. Whatever the case, Frame’s bill of goods has effectively just increased a few more dollars thanks to its Qualcomm Snapdragon 8 Gen 3.
That’s in the near term. In the longer term, I’d expect the price hike to touch smart glasses, AR glasses, as well as in-development VR headsets—with all constituent companies probably now having to weigh whether they really actually need a cutting edge processor to meet market expectations.
