Qualcomm inks $1.4B deal for chip startup Nuvia to boost processor lineup
Qualcomm Inc. said today it has signed a $1.4 billion deal to acquire Nuvia Inc., a chip startup led by Apple Inc.’s former top central processor unit engineer.
The deal marks a quick exit for Nuvia, which emerged from stealth less than two years ago. Qualcomm’s $1.4 billion offer also represents a rapid and possibly significant return for the startup’s investors, which have provided it with about $293 million in funding.
Nuvia Chief Executive Gerard Williams III (pictured, center) headed Apple’s CPU architecture team for close to a decade before launching the startup with co-founders Manu Gulati and John Bruno. Earlier, Gulati (right) was the lead system-on-chip architect at Google LLC’s consumer hardware unit. Bruno (left) also worked at the search giant as a system architect.
The track record of Nuvia’s founding team isn’t the only reason it managed to raisemore than $290 million in under two years. Another factor was the startup’s technology: Nuvia last year detailed a server CPU under development that it says significantly outperforms the competition. According to internal simulations, the CPU could provide higher speeds than current chips using less power.
It’s notable that Qualcomm didn’t discuss its plans for the server market in its acquisition announcement today. The company did, however, said that it will apply Nuvia’s technology in mobile devices. Qualcomm intends to integrate Nuvia CPUs into its flagship Snapdragon processors, which power a big percentage of the world’s Android devices.
Qualcomm’s vision for the Nuvia acquisition is likely not limited to consumer hardware. The company said the startup’s technology is “expected to be integrated” across its “broad portfolio of products, powering flagship smartphones, next-generation laptops, and digital cockpits, as well as Advanced Driver Assistance Systems, extended reality and infrastructure networking solutions.”
Qualcomm’s mention of infrastructure networking solutions may be a reference to 5G carrier gear. The company not long ago announced plans to make chips for 5G base stations.
Given Nuvia’s original focus on making server chips, it’s not out of the question that Qualcomm could eventually use its technology to target the data center market as well. Demand for data center chips is surging thanks to the growth of the public cloud. Plus, Qualcomm had already made an attempt to enter this segment once before, though it abandoned the initiative in 2018.
The deal could give Qualcomm a strong starting position in the server market, if some of Nuvia’s most recent publicly released product specifications are an indication. The startup disclosed last August that, in simulations, its CPU core design managed to provide 50% to 100% higher peak performance than certain chips from Advanced Micro Devices Inc. and Intel. Nuvia claimed its CPU could require as little as a third the power of Intel silicon under certain conditions.
Other major chip industry players besides Qualcomm have also turned to acquisitions to speed up their market expansion plans. Nvidia Corp.’s proposed $40 billion purchase of Arm Ltd. is the highest-profile example. There was also Intel’s $2 billion acquisition of Habana Labs Ltd. last year, a deal that bought the company high-speed chips for training and running artificial intelligence models.
Given the increased acquisition activity in the chip market recently, it’s possible that another factor behind Qualcomm’s steep $1.4 billion offer for Nuvia was that there were other bidders who drove up the price.
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