Qualcomm reportedly plans to re-enter the server chip market

After an aborted effort to enter the server chip market about five years ago, Qualcomm has decided to make another attempt, according to Bloomberg News.

Qualcomm has elected to build a new server chip from within its Nuvia unit, and is courting AWS as a potential client as it is searching for buyers, according to the report. The details are light, however, and it wasn’t clear whether Qualcomm planned to use an Arm-based core design for the chip, or even what type of data-center chip the company was aiming to produce.

Qualcomm and AWS declined to comment.

Nuvia was founded by several former Apple and Google chip engineers in 2019, and was developing a line of Arm-based server chips when Qualcomm acquired it in 2021 for over $1 billion. AWS uses Arm designs for its in-house Graviton chips, and startups such as Ampere have built server chips based on Arm tech that aim to break into the server-processor market, which has been dominated by Intel and AMD for years.

In a recent interview with Protocol, Arm CEO Rene Haas estimated that its technology makes up 5% to 10% of the data center market at this point. Chips based on the company's designs have a reputation for using energy more judiciously than rival x86 processors, and those chips — including ones made by Qualcomm — are already used extensively inside smartphones and tablets.

Arm declined to comment about Qualcomm’s possible server chips.

Qualcomm's last attempt to make a server chip launched in 2017, and several cloud computing providers such as Microsoft and Cloudflare expressed interest in adopting the design, which was called the Centriq 2400. Ultimately, the company shut down the project less than a year after its announcement, and former Intel veteran Anand Chandrasekher, who led the effort, departed Qualcomm.

Under the leadership of CEO Christiano Amon, Qualcomm has attempted to broaden its business beyond smartphones and wireless chips. The diversification efforts include a greater push into automotive and industrial chips, and PC chips based on Arm designs that aim to compete with Intel and AMD.

In recent months, the market for chips in consumer devices such as smartphones and PCs has softened considerably as inflation has led consumers to hold off on new purchases.