Qualcomm reportedly planning to return to server market with new chip

Qualcomm Reportedly Plans Return to Server Market With New Chip

Bloomberg News on Thursday, citing people familiar with its plan, said that Qualcomm is considering a return to the server market with a new chip to reduce reliance on smartphones. Qualcomm shares rose nearly 3 per cent in afternoon trading. The chipmaker is seeking customers for the product stemming from its purchase of Nuvia, the report said, adding that Amazon.com’s cloud division, Amazon Web Services (AWS), to take a look at Qualcomm’s offerings has agreed.

Last year, the chipmaker acquired Nuvia, a chip startup founded by Apple veterans, with plans to infuse the firm’s technology into its smartphones, laptops and automotive processors.

Amazon confirmed it has agreed to take a look at the offering, while Qualcomm said it does not comment on the rumors and directed Reuters to its press release when it closed the Nuvia deal in March last year. Had done it.

San Diego-based Qualcomm forecast fourth-quarter revenue below Wall Street targets in July, thanks to a tough economy and a slowdown in smartphone demand that could hurt its core handset chip business.

At the time of earnings, Chief Financial Officer Akash Palkiwala said, “We expect customers to be careful in managing their purchases in the second half with the increased uncertainty in the global economy and the impact of COVID measures in China.”

The Ukraine crisis and China’s lockdown have also caused supply-chain disruptions and damaged demand, forcing many phone makers to cut orders for chips.

The company now expects smartphone sales to decline by 5 per cent this year, compared to flat growth expected earlier. IDC had forecast a 3.5 per cent decline in smartphone shipments.

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More than half of Qualcomm’s total sales come from the handset segment, which makes modem chips for Apple iPhones and the chips that power some models of Samsung’s Galaxy S series.

Company officials reiterated that Qualcomm’s focus on supplying chips to premium phones and its emphasis on diversifying into other sectors such as automotive will reduce demand for cooling smartphones.

© Thomson Reuters 2022


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