Qualcomm is Pursuing Intel and AMD in This Profitable Market Sector
The dominance of Intel and AMD in the server CPU market, using their x86 architecture chips, has been undeniable for years. Rivals like IBM have had their moments, but x86 remains king in the data center. Qualcomm attempted to shake things up with its Arm-based Centriq server CPUs in 2017, but the offering failed to make waves, leading to a significant scale-back in their efforts.
Fast forward to today, and Qualcomm is giving it another go. Last year, they introduced their first Arm-based PC CPUs, although the reception was underwhelming due to compatibility issues. Despite the initial stumble, Qualcomm seems set on reentering the server CPU market, and if recent developments are any indication, they're serious about it.
Intel veteran Sailesh Kottapalli, a chief architect of the Xeon server processor family, recently joined Qualcomm after nearly three decades at Intel. In addition, Qualcomm's job postings reveal a data center team researching server products for data center applications. With Kottapalli's expertise, Qualcomm could stand a better chance of success this time around.
Qualcomm's PC chips have shown promise in terms of performance and efficiency – areas the company can build upon in the server market. However, they'll still face stiff competition from both Intel and AMD. As for Intel, they've bolstered their product lineup with powerhouse Granite Rapids chips and energy-focused Sierra Forest chips, while last year's release of its Turin family of server CPUs from AMD has been well-received by customers.
The server CPU market is seeing a resurgence of change, with Qualcomm's potential comeback creating both challenges and opportunities for Intel and AMD. One challenge is the increasing adoption of AI datacenters by tech giants like Microsoft, who are now designing their own Arm-based CPUs, adding momentum to the market. This shift to AI is also making energy efficiency and cost-effectiveness prevalent, leaving traditional x86 architecture trailing behind.
On the flip side, with these challenges come opportunities. Intel and AMD must innovate and effectively execute to stay competitive, building on already successful strategies like AMD's focus on performance per unit of energy. Custom chip designs made for specific industry needs can also create opportunities, while strategic partnerships with companies like Qualcomm or NVIDIA can help them offer a more comprehensive range of solutions to customers.
Intel's significant investment in its 18A process, promising advanced transistor density and efficiency, gives them an edge in regaining their market dominance. With these opportunities, it's not time to count Intel and AMD out just yet. The re-entry of Qualcomm in the server CPU market may disrupt their market share, but they're ready to fight back with both innovation and execution.
In an attempt to reclaim their position, Intel has significantly invested in its 18A process, aiming for advanced transistor density and efficiency. Recognizing the potential threat, Qualcomm is actively investing in finance and resources, constructing a data center team and hiring experienced professionals like Sailesh Kottapalli.
