Highlights:

  • Qualcomm aims to improve its revenue growth goal by a return to the server market.
  • Last quarter, the firm exceeded analysts’ revenue forecasts by boosting revenues by 37% year-over-year to USD 10.93 billion.

Four years after leaving the server chip market, Qualcomm Inc. is intending to make a comeback.

Sources have confirmed that the company is seeking clients for a new processor developed to power servers. According to them, Amazon Web Services (AWS) Inc. has agreed to analyze the processor. AWS, the top cloud provider in the business, is a significant purchaser of processors and other data center gear.

According to recent reports, the server processer is built on a technology Qualcomm acquired via the acquisition of chip startup Nuvia Inc. which cost it USD 1.4 billion. Nuvia began operations in 2019 and obtained more than USD 290 million in investment before being acquired by Qualcomm.

Before its acquisition by Qualcomm, Nuvia engaged itself in developing a server CPU based on the chip designs developed by Arm Ltd. In the August of 2020, the young company made available some preliminary technical data that it had compiled from simulations of its processor design. Nuvia claimed that its design has shown to be capable of delivering peak performance between 50% and 100% higher than competitor goods while consuming less power.

Since Nuvia based its chip on Arm specifications, Qualcomm may adopt the same strategy for its upcoming server CPU. The business has already established its flagship Snapdragon smartphone chip on Arm specifications.

It is unknown if Qualcomm’s server processor is a Central Processing Unit (CPU) or a system-on-chip, like the Snapdragon series. SOC is a type of processor that combines a CPU with specialized components, such as circuits tailored to execute Machine Learning (ML) software. Qualcomm released a SOC for servers in 2017 but shut down the business unit responsible for the chip’s development the following year.

With its Cloud AI 100 processor, Qualcomm continues to retain a foothold in the data center market. The Cloud AI 100 may be connected to servers to help with an inference or the task of running ML models in production. Qualcomm claims that the processor can perform up to 400 trillion computations per second.

Qualcomm has endeavored to extend outside the mobile sector into other markets to accelerate revenue development. The business announced a chip series geared for smart vehicles in 2020. Later, it paid USD 4.5 billion to purchase automotive technology provider Veoneer Inc. Last June, Qualcomm debuted a computing module for powering 5G carrier networks.

Qualcomm’s attempts to broaden its scope outside the mobile sector are paying dividends. Last quarter, the firm exceeded analysts’ revenue forecasts by boosting revenues by 37% year-over-year to USD 10.93 billion. Qualcomm’s automotive chip sales increased by 38%, while revenue from its connected device division increased by 31%.

Qualcomm aims to improve its revenue growth goal with a return to the server market. Concurrently, such a move would increase competition for Intel Corporation and Advanced Micro Devices Inc., the two market leaders in server CPUs.

Intel and AMD are facing competition from other firms as well. Ampere Computing LLC, a chip firm with USD 426 million in investment, offers a range of Arm-based server CPUs. Nvidia Corporation debuted its own Arm-based server CPU in April of last year.