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Qualcomm to accelerate the transformation of the road, back to the server chip market how good?

Qualcomm to accelerate the transformation of the road, back to the server chip market how good?

June 11 , 2024 0

Although Qualcomm tried to enter the high-end server CPU market very early, it stopped the ARM architecture server CPU business in 2020 for various reasons. However, in the following years, Qualcomm was still called back to the server market from time to time, until Qualcomm CEO Cristiano Amon made a positive response at the recent Coputex 2024 show - choosing to try again in a more mature technology and market environment.

At this exhibition, Qualcomm joined hands with Microsoft and other partners to launch a series of AI PCS based on their own Nuvia kernel Snapdragon X series platform. Amon also said that in addition to mobile devices and PCS, Qualcomm will also launch a Nuvia-based Snapdragon processor platform for data centers and automobiles in the future. This also seems to mean that Qualcomm will accelerate the pace of returning to the server chip market.

Back In The Server Chip Market

Although Qualcomm has a leading edge in the field of mobile phone chips, over-reliance on a single market has also brought growth difficulties to a certain extent. To this end, Qualcomm accelerated its transformation several years ago, eyeing the lucrative server chip market.

Qualcomm has tried to bring ARM's technology to the server core chip market to break Intel's monopoly. In 2017, Qualcomm announced that the first Arm server chip Centriq2400 was officially listed and manufactured by Samsung. Although Microsoft and other technology giants have been interested in this chip, but because of the weak Arm server ecosystem at that time, Qualcomm's Arm server chip can not compete with Intel, AMD X86 server chips. Qualcomm has been quiet about the chip's progress.

At the same time, Qualcomm also encountered a hostile takeover bid from Broadcom. Although Broadcom's acquisition was halted by the US government, Qualcomm was forced to make a series of financial cuts in order to satisfy shareholders. However, after the acquisition dispute ended, Qualcomm tried to cut costs to appease investors, especially by cutting spending in non-core product areas.

In May 2018, Qualcomm began studying whether to shut down the server chip unit or find a buyer for it. However, despite Qualcomm's layoffs in the server division, Amon denied giving up the server chip business and said the server chip unit would operate normally.
Entering 2021, Qualcomm acquired Nuvia, a chip company founded by Apple's chip designer. Although Nuvia has provided technical support for the development of high-end chips for smartphones and PCS, it was founded as a technology supplier to the server industry. This has undoubtedly caused the industry to return to the reverie of Qualcomm server market.

In fact, although Qualcomm has always been obsessed with server chips, compared with x86 competitors such as Intel Xeon and AMD Xiao Long, both technology and ecology are the shortcomings of its business. However, after the acquisition of Nuvia, Qualcomm gradually made up for its technical shortcomings, and with the support of Apple's "insiders", it soon released a "Snapdragon X" platform - "Snapdragon X Elite" - for AI PC products in October 2023.

In April this year, foreign media reported that after releasing the Snapdragon X Elite/Plus processor, Qualcomm is developing an internal server processor code-named SD1. The processor will be manufactured using TSMC's 5-nanometer process (N5P), equipped with 80 Oryon cores developed by Qualcomm subsidiary Nuvia, with a maximum frequency of 3.8GHz, 16-channel DDR5 memory, and a maximum transfer rate of 5600MHz. In addition, there are 70 PCIe 5.0 ports, and support for CXL v1.1,9470 pin LGA sockets, suitable for dual-slot configuration servers and more.

Amon's latest statement also proves Qualcomm's confidence in returning to the server market.

Optimistic About AI PC Market Opportunities

In the era of the explosion of AI applications, Qualcomm is trying to return to the server market, not only stepping on the nodes of the development of generative AI, but also meaning that there is innovation and progress in technology.

At Coputex 2024, Amon also highlighted the new replacement cycle opportunities that generative AI brings to the PC market. He said, "We want to improve the CPU, GPU, NPU and other features, while improving battery life, which will be the key to defining the PC market leadership."

Amon believes that the Snapdragon X Elite and Snapdragon X Plus developed by Qualcomm have the best NPU performance and the best battery life.

According to Qualcomm's official data, Snapdragon X Elite based PC can provide five times the performance at lower temperatures. In terms of CPU performance, the Snapdragon X Elite is 51% faster than its competitors (AMD Ryzen 9 7950HS and Intel Core Ultra 9 185H) in Geekbench single-threaded testing, while consuming 65% less power.

The Hexagon NPU on Qualcomm's Snapdragon X series processors delivers up to 45 TOP performance, which is 2.6 times better per watt than the Apple M3 processor and 5.4 times better than the Intel Core Ultra 7 155H processor.

In terms of battery life comparison, the Snapdragon X Elite PC products can last up to 30 hours, compared to the Intel Core Ultra 7 PC, video playback time can be extended by 60%, video call time can be extended by 70%, and when playing streaming video, the battery life is doubled.

Amon is very optimistic about new opportunities for AI PCS. "When a new version of Windows on Arm appears in the PC market, it will take a while to be adopted, but given that Microsoft has discontinued support for Windows 10 and users can switch to the new Copilot+ PC, I believe adoption will be much faster than before," he said.

It is reported that the first batch of Snapdragon X Elite and Snapdragon X Plus AI PC more than 22 models, launched by Acer, Asus, Dell, HP and other 7 OEM manufacturers, is expected to 2025 market penetration will continue to increase.

2024 will be the first year of AI PC. Canalys predicts that by 2027, more than 175 million AI PCS will be shipped worldwide. IDC also predicts that AI PCS will account for about 60% of total global PC shipments in 2027. In addition, Canalys also pointed out that global AI PC shipments will exceed 100 million units in 2025, accounting for 40% of total PC shipments.

However, in addition to AI PC, Amon is also optimistic about the future application prospects of Nuvia kernel in mobile phones, data centers, automobiles and other applications, "data centers are a good opportunity to transform to Arm's architecture, and I believe that there are more opportunities for edge computing in the future."

Big Challenges Remain

However, although Qualcomm vigorously promotes the technology research and development and market promotion of Arm architecture server chips, there is still greater competitive pressure compared with Intel's dominant position in the PC market and ecology. Data show that Intel is still the top PC market, occupying more than 70% of the market share of the laptop CPU market. At the same time, in response to the needs of AI, Intel also launched Meteor Lake series of chips.

At the same time, in the transformation process from X86 to ARM architecture, a number of technology giants have also joined the battle for the AI PC market, and rely on TSMC's advanced chip process, the gap between each other will rapidly narrow. Mediatek, for example, has partnered with Nvidia to develop ARM-based processors for Windows PCS; AMD also plans to use ARM technology to develop new PC processors.

It can be seen that Qualcomm will also bear no small pressure on the Arm architecture server.

However, like Qualcomm, chip architecture giant Arm also has similar growing pains, and the new business target is to PC. Recently, Rene Haas, CEO of British chip designer Arm, said on several occasions that the company's goal is to gain more than 50% of the Windows PC market within five years. Arm's focus on the layout of PC chip architecture is bound to further disrupt the Wintel ecosystem.

It is also gratifying that in the software ecology, Qualcomm has been supported by Microsoft. Microsoft is also understood to be pushing the shift of the Windows operating system to the ARM architecture, in particular in May this year unveiled an ambitious plan to launch a new generation of AI-enabled PCS to compete with Alphabet and Apple. Therefore, at Coputex 2024, the two giants also joined hands to launch a series of AI PCS based on the Nuvia kernel Snapdragon X series platform.

In addition, Qualcomm has long been expanding to target large customers such as Amazon AWS to promote its latest server chips. Amazon's cloud computing business AWS, one of the world's largest buyers of server chips, has agreed to study the performance of chip products provided by Qualcomm.