QUALCOMM

Semiconductor giant may return to server processor segment

Qualcomm is about to make another attempt at returning to the server processor segment - a $28 billion market will help the company reduce its reliance on smartphones. The assets of startup Nuvia, which was absorbed last year, will help the chipmaker in this, and Amazon's cloud division has already agreed to familiarize itself with Qualcomm's proposal, Bloomberg learns.

The company's CEO, Cristiano Amon, is trying to make Qualcomm a major supplier of semiconductor products for a wide range of products - the role of just a leading smartphone chip maker no longer suits him. Four years ago, Amon's predecessor abandoned the idea of ​​conquering the server market, and then it was an understandable decision: the company cut costs and calmed investors after it managed to fend off a hostile takeover by Broadcom. Now Qualcomm has Nuvia and its people, including people at Apple. By buying Nuvia for $1.4 billion, Amon said it would help Qualcomm strengthen its position in the smartphone and PC segments, but Nuvia was created as a developer of server solutions.

Returning to the server market will require Qualcomm to reconnect with potential customers that the company last tried to win over, even though the industry has changed a lot in recent years. Amazon started releasing its own server processors, and startup Ampere Computing became a big player and had Microsoft backing it. Even so, the direction remains promising: Smartphone chips are estimated at tens of dollars, while a server processor can cost as much as $10,000. According to analysts at IDC, total spending on cloud infrastructure last year increased 8.8% to $73.9 billion. And the data center processor market alone is valued at $28 billion a year, calculated Mandeep Singh, an analyst at Bloomberg Intelligence.

Cloud providers today are not just using Intel and AMD chips, but increasingly solutions based on the Arm architecture. In the mobile device segment, Arm processors are valued for their low energy consumption, but with the expansion of cloud infrastructure and the strengthening of the “green” agenda, the issue of energy consumption also gains relevance for the data center. Amazon, as the largest cloud provider, has solved this problem with Graviton's own ARM chips, although it continues to work with products from Intel, AMD and NVIDIA in parallel - so Qualcomm hopes to carve out its own niche among other vendors.

Qualcomm made its last attempt to establish itself in the server market in 2017, introducing the Centriq 2400 chip - it was produced by Samsung Electronics and outperformed Intel Xeon processors in some respects. The announcement was also attended by potential buyers of the solution, including Microsoft. But less than a year later, the company's management began to curb the project, and former Intel manager Anand Chandrasekher, who led it, left Qualcomm. The company's return to the server business and increased competition here will hit Intel, which once dominated this market, is now reducing its share due to AMD and its own cloud provider solutions.

Source: Qualccomm