Rumor: Qualcomm exits the server chip market

Qualcomm has reportedly decided to exit the server chip market. The company wanted to compete with Intel with ARM chips, but will probably refrain from doing so to cut costs.

Qualcomm would look into closing or selling its server chips division, Bloomberg writes, citing a source familiar with the company’s plans. The reason for the discontinuation of development is unknown. However, the CEO of Qualcomm already announced last month that Qualcomm will reduce its costs at divisions that do not focus on the core activities, such as Snapdragons and modems.

The American chip designer is under pressure from shareholders to improve its profitability, after a takeover by Broadcomm was narrowly prevented. The US government blocked the takeover for security reasons.

Qualcomm introduced the Centriq 2400, a 10nm chip with 48 ARM cores, at the end of 2016, and the chip came on the market a year later. In particular, the company emphasized the energy efficiency and low cost advantages over Intel’s Xeon processors. The market for data center chips is seen as lucrative because companies can charge relatively high prices for them, but in terms of numbers, the market for mobile chips is larger and the development of complex server chips is also associated with high costs.