(Reuters) – Qualcomm Inc has no plans to desert its efforts to create processors for information facilities, the corporate’s president, who oversees the chip division, stated.
Qualcomm, the most important maker of chips in cell phones, final yr launched chips that use expertise from Softbank Group Corp’s ARM Holdings to energy the workhorse laptop servers behind cloud-based providers similar to social networks.
Qualcomm’s push to enter the info middle market places it in direct competitors with Intel Corp, which dominates information facilities and now attracts half of its income from servers and different “information centric” chips.
However in Might, Bloomberg reported that Qualcomm was exploring whether or not to promote or shut down the server chip unit.
Qualcomm President Cristiano Amon instructed Reuters on Monday that the chipmaker is making employees reductions within the unit however intends to maintain working it, albeit with a narrower give attention to massive web firms in the USA and China.
“We aren’t taking a look at strategic choices. We aren’t promoting. We’re nonetheless targeted on it,” Amon instructed Reuters.
San Diego-based Qualcomm declined to say whether or not it had thought-about promoting the server chip unit in some unspecified time in the future up to now. The corporate as an alternative pointed to an April earnings name during which Chief Govt Officer Steve Mollenkopf stated Qualcomm was contemplating cost-cutting choices in areas that aren’t central to Qualcomm’s enterprise, which overwhelmingly comes from promoting chips and licensing expertise for cell phones.
Amon instructed Reuters that the server chip enterprise will probably be rolled into Qualcom’s Qualcomm CDMA Applied sciences unit, which designs and sells cell phone chips, to realize value efficiencies.
Amon stated the restructured server chip unit will give attention to massive cloud computing gamers. He wouldn’t title U.S. targets, however stated the corporate is hoping to promote to Chinese language web giants similar to Alibaba Group Holding Ltd, Tencent Holdings Ltd and Baidu Inc by way of a three way partnership in China.
Massive web firms have a tendency to jot down a lot of their very own inner software program and might customise it for Qualcomm’s chips. Meaning they won’t wrestle like smaller gamers to adapt off-the-shelf information middle software program that’s overwhelmingly written to run on Intel’s so-called x86 chips.
“It’s very clear to us that the ARM alternative is targeted on a number of gamers the place you don’t have the software program x86 barrier to entry,” Amon stated.
Reporting by Stephen Nellis; Enhancing by Leslie Adler