UPDATED 16:44 EDT / AUGUST 18 2022


Report: Qualcomm plans to return to the server chip market

Qualcomm Inc. plans to return to the server chip market four years after exiting the segment, Bloomberg reported today.

Sources familiar with Qualcomm’s plans told Bloomberg that company is seeking customers for a new processor built to power servers. According to the sources, Amazon Web Services Inc. has agreed to evaluate the processor. AWS, the industry’s leading cloud provider, is a major buyer of chips and other data center hardware.

Qualcomm’s server processor is reportedly based on technology that it obtained through the $1.4 billion acquisition of chip startup Nuvia Inc. last year. Nuvia launched in 2019 and raised more than $290 million in funding prior to its acquisition by Qualcomm. The startup’s chief executive officer, Gerard Williams III, previously worked at Apple Inc. as the head of its central processing unit architecture team.

Before Qualcomm’s acquisition, Nuvia was working on a server processor based on Arm Ltd. chip blueprints. In August 2020, the startup released early technical data collected from simulations of its processor design. Nuvia claimed that its design had demonstrated the ability to provide 50% to 100% higher peak performance than competing products using less power. 

Today’s report didn’t detail how the server processor that Qualcomm is developing makes use of Nuvia’s technology. Given that Nuvia based its chip on Arm blueprints, it’s possible that Qualcomm is taking the same approach with the new server processor. The company already uses Arm blueprints as the basis of its flagship Snapdragon mobile chips.

It’s unclear whether Qualcomm’s server processor is a CPU or a system-on-chip like the products in the Snapdragon series. A system-on-chip, or SOC, is a type of processor that combines a CPU with more specialized components, such as circuits optimized to run machine learning software. Qualcomm introduced an SOC for servers in 2017 but shuttered the business unit that developed the chip a year later. 

Qualcomm continues to maintain a presence in the data center market with its Cloud AI 100 chip. The Cloud AI 100 can be attached to servers to help with inference, or the task of running machine learning models in production. According to Qualcomm, the chip is capable of carrying out up to 400 trillion computing operations per second. 

In recent years, Qualcomm has sought to expand beyond the mobile market to other segments as part of an effort to accelerate revenue growth. The company introduced a chip series optimized for smart cars in 2020 and later acquired vehicle technology supplier Veoneer Inc. through a $4.5 billion deal. Last June, Qualcomm debuted a computing module for powering 5G carrier networks.

Qualcomm’s efforts to extend its focus beyond the mobile market are paying dividends. Last quarter, the company topped analysts’ revenue projections by increasing sales 37% year-over-year, to $10.93 billion. Qualcomm’s automotive chip sales grew 38%, while its connected device business logged a 31% revenue increase.

Returning to the server market could help Qualcomm advance its revenue growth strategy. At the same time, such a move would create more competition for Intel Corp. and Advanced Micro Devices Inc., the two leading players in the server CPU market.

Intel and AMD are also facing competition from other companies. Ampere Computing LLC, a chip startup backed by $426 million in funding, offers a line of server processors based on Arm designs. Last April, Nvidia Corp. introduced an Arm-based server processor of its own.

Photo: Qualcomm

A message from John Furrier, co-founder of SiliconANGLE:

Your vote of support is important to us and it helps us keep the content FREE.

One-click below supports our mission to provide free, deep and relevant content.  

Join our community on YouTube

Join the community that includes more than 15,000 #CubeAlumni experts, including Amazon.com CEO Andy Jassy, Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger and many more luminaries and experts.

“TheCUBE is an important partner to the industry. You guys really are a part of our events and we really appreciate you coming and I know people appreciate the content you create as well” – Andy Jassy