Qualcomm is betting on a new chip to make a comeback in the server processor market. In particular, the company is betting that it can tap into a $28 billion industry and reduce its reliance on smartphones.
Last year, Qualcomm bought the chip startup Nuvia. And, according to people familiar with its plans, the company will be looking for customers for a product resulting from this purchase. These people preferred to remain anonymous, as apparently the discussions are private. Amazon, one of the giants of server chip purchasing, has agreed to take a look at these new Qualcomm chip deals. However, representatives of each company declined to comment.
After Bloomberg broke the news, Qualcomm gained as much as 2.9% to $152.91 in New York trading. In fact, Qualcomm CEO Cristiano is no longer content with being the leading smartphone chipmaker. He plans to make the company a broader supplier of semiconductors.
Qualcomm gets more powerful with chip startup Nuvia
Qualcomm now owns Nuvia, which is made up of enterprise chip designers such as Apple Amon. Apple Amon acquired Nuvia for $1.4 billion in 2021. Since then, it has declared that its work will help revitalize Qualcomm’s high-end offerings for smartphones and personal computers. However, Qualcomm’s return to the server market requires restoring the confidence of its former potential customers. What’s more, much has changed in the industry since then. By way of example, Amazon has deployed in-house processors for servers. Also, startups like Ampere Computing have won contracts with customers like Microsoft. On the other hand, the potential rewards of Qualcomm’s new 0-server project could be substantial. In fact, the company’s phone offerings typically cost tens of dollars. On the other hand, its most high-end server processors are priced at over $10,000 per chip.
Qualcomm’s new chip makes inroads into data centers
Data center processors alone generate $28 billion a year. This is a statement from Mandeep Singhanalyst at Bloomberg Intelligence. “Qualcomm’s return to the Arm server market extends its reach into one of semiconductor’s strong points”he said.
Owners of giant cloud data centers have always relied on Intel chip technology for their servers. However, they are increasingly adopting processors based on ARM designs. The latter, based in San Diego, is a key partner in telephone chips for Qualcomm. Amazon, for its part, still uses chips from Intel, Advanced Micro Devices and Nvidia. And Qualcomm sees an opportunity to find a place for itself among these suppliers. For Intel, Qualcomm’s return would bring even more competition to a sector it once dominated.