Qualcomm Plans to Return to Server Market with New Chips

For many years, Qualcomm has been a trusted name in smartphone chips. In fact, these chips have been powering millions of the world’s most popular smartphone models for years. Recently, however, Qualcomm has announced plans to return to the server market with a brand new chip that will diversify the brand’s offerings and potentially open new doors of opportunity.

More About Qualcomm’s New Chips

Qualcomm has attempted to manufacture server chips in the past, but it has been years since the brand had any involvement in this realm. Specifically, 2017 was the last year that Qualcomm attempted to sell a server chip known as the Centriq 2400; this was a short-lived venture, however, as the project screeched to a halt less than a year later. From there, the former Intel executive who had been spearheading the project suddenly left the company — and there has been no talk about future server chip development since. That is, until now.

Ever since smartphones began to see sweeping popularity across the globe, Qualcomm has differentiated itself as a producer of phone chips — allowing their manufacturing of server chips to fall by the wayside.

Things are changing for the brand, however. In 2021, Qualcomm purchased a startup chip company known as Nuvia, which had been founded by a group of veteran Apple engineers. When established, Nuvia planned to create server chips, but this plan was abandoned shortly after Qualcomm purchased the company. Now, in September of 2022, plans to manufacture server and computer chips appear to be back on the table.

Why the sudden pivot? For starters, Qualcomm CEO Cristiano Amon has stated in the past that the brand would like to diversify its revenue sources — so branching back off into server chips makes sense in this regard. Furthermore, likely, some technology and development may already exist from Nuvia’s developers; this information could be applicable and reduce the need for further (costly) development on Qualcomm’s part.

Of course, a lot of this also boils down to money. Currently, Qualcomm’s smartphone chips are bringing in just a fraction of what server chips could bring in for the company. It is not unheard of for a high-end server chip to sell for $10,000 or more. At the end of the day, offering server chips in addition to the existing smartphone chips will help Qualcomm build its brand while also bringing in significantly more revenue.

Meanwhile, investors are buying the idea (literally). After the company announced that it intends to pursue server chips as a new venture, shares of the company rose 3% over the course of just a few hours.

What This Means for The Industry

For the industry, Qualcomm’s throwing its hat into the server chip ring will likely be beneficial over time. Currently, there isn’t a lot of diversity when it comes to server chip manufacturers. Combine this with supply chain issues that have been plaguing the industry for the last few years, and it’s easy to see how options are somewhat limited in the server chip field.

With Qualcomm as a new but trusted player in the game, experts are hopeful that Qualcomm’s new chips may alleviate some supply chain issues while also driving down prices as a whole. Qualcomm is already a trusted brand in the smartphone chip segment, so if the company can bring that same level of quality and trust to the server chip field, this could bring a lot of positive changes to the industry. Of course, only time will tell whether this will be the case.

Potential Applications to Amazon Web Services

In addition to its planned development of server chips, there have also been rumors that Qualcomm may be partnering with Amazon Web Services (AWS). As of September 2022, however, Qualcomm has not made any official announcements in this regard, so we’ll have to see what the future holds. As for now, it has at least been confirmed by Bloomberg that Amazon has agreed to take a look at Qualcomm’s chip offerings in consideration of an AWS partnership.

If plans for this partnership turn out to be true, however, this could be big because it would demonstrate that Qualcomm is not planning to start small with its new chip offerings. Instead, the brand would be busting into the industry and immediately partnering with one of the largest companies in the world. This would say a lot about the brand’s confidence in its new technology, which is a good sign for consumers.

The Bottom Line

The future is looking promising not just for Qualcomm, but for the computing industry as a whole — which could probably benefit from a new player in the server chip game. Still, because Qualcomm so quickly abandoned its earlier efforts at developing a server chip several years ago, some experts are understandably skeptical about this latest news. With a lot more at stake this time around, however, many are confident that we’ll see these chips come to fruition and actually hit the market.

Qualcomm has not yet announced a release date for its first server chip, as the brand appears to still be in the early stages of development and is likely still working with Nuvia’s existing team. Still, it will be nonetheless interesting to see how this whole thing unfolds in the coming years. Likewise, we will eagerly await to see if any kind of partnership comes to fruition between Qualcomm and Amazon — as this could mean even bigger things that go well beyond the computing industry.