Qualcomm said it’s making strides in developing semiconductors for data centers – a key growth area for the San Diego firm as the smartphone market matures.
While still in the early stages, Qualcomm said last week that it is delivering sample system-on-a chip products to data centers for testing. The announcement comes a year after Qualcomm revealed it aimed to make energy efficient chips for computer servers that run data centers – putting it in direct competition with Intel.
“We are in the investment phase of this business” said Pete Lancia, a Qualcomm spokesman. “We are talking about it partially to show that we are making progress. We are getting to the point where we are running real server workloads based on this development platform.”
The company did a live demonstration of a 24-core system-on-a-chip processor, and it announced that it is working with data center suppliers Xilinx and Mellanox Technologies to make sure its processors perform well with their technologies.
For Qualcomm, the move into data centers is a challenge to Intel, which holds a dominant market share for server processing chips.
Qualcomm and Intel have been on a collision course for some time. Intel has spent billions over the years trying to pry loose Qualcomm’s grip on the smartphone chip market.
Meanwhile, Qualcomm has seen growth slow dramatically as the smartphone market matures and its top Android customer — Samsung — opted to use its own internally developed processor in its flagship Galaxy S6 phone this year.
Qualcomm hopes to win back Samsung next year. But the company also is looking for new, growing markets where it can use its smartphone chip design expertise.
The company’s server processors are based on architecture licensed from ARM Holdings, which specializes in low power processors.
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ARM-based processors are common in smartphones but haven’t been used much in computer servers, where raw processing power is most valued, said Will Strauss, head of industry research firm Forward Concepts.
But as cloud computing expands, data center operators are searching for ways to the cut power consumption and the heat coming off their server racks, said Strauss.
That creates an opening for Qualcomm, which has deep pockets to invest in developing power-saving processors for cloud computing, said Strauss.
Still, it likely will take time for Qualcomm to make headway in the computer server market, in part because it’s a new business for the company.
“My guess is they’ll deliver prototypes next year,” said Strauss. “There will be trials and so on. So it’s going to take five years to get any traction.”