- Qualcomm Inc QCOM took another run at the server processors market to tap a $28 billion industry and decrease its reliance on smartphones, Bloomberg reports.
- Qualcomm sought customers for a product stemming from last year's purchase of chip startup Nuvia.
- Leading server chip buyer Amazon.com Inc's AMZN AWS business has agreed to look at Qualcomm's offerings.
- Also Read: EXCLUSIVE: Qualcomm CFO Says Company Is 'Naturally Positioned' To Benefit From The Digital Transformation: 'The Opportunity In Front Of Us Is Unlimited'
- CEO Cristiano Amon aimed to turn Qualcomm into a broader provider of semiconductors rather than just the top maker of smartphone chips.
- Qualcomm has Nuvia, staffed with chip designers from companies like Apple Inc AAPL.
- Amon, who acquired the business for about $1.4 billion in 2021, saw it help revitalize Qualcomm's high-end offerings for smartphones and personal computers.
- The move implies Qualcomm has a much bigger-ticket item to sell. The highest-end server processors carry prices of more than $10,000 per chip.
- Spending on cloud computing infrastructure as Amazon, Alphabet Inc GOOG GOOGL Google, and Microsoft Corp MSFT used to whisk data totaled $73.9 billion in 2021 as per IDC.
- According to Bloomberg analyst Mandeep Singh, data-center processors generate $28 billion a year.
- "Qualcomm's re-entry to the Arm server market broadens its reach into one of the bright spots in semiconductors," he said.
- Giant cloud data centers are increasingly embracing processors using designs from Qualcomm's essential partner SoftBank Corp SFTBY Arm Ltd to Intel Corp's INTC dismay.
- Amazon has addressed the power consumption issue of data centers by building its chips based on Arm designs.
- But Amazon also still uses chips from Intel, Advanced Micro Devices Inc AMD, and Nvidia Corp NVDA, with Qualcomm seeing an opportunity to carve out a niche among those suppliers.
- Qualcomm's previous attempt to tap the market failed due to a critical executive exodus.
- Price Action: QCOM shares traded lower by 1.22% at $149.54 premarket on the last check Friday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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