Qualcomm: We're not withdrawing from ARM server chip development

Chipmaker might try to bypass Intel rather than compete with the server chip behemoth

Qualcomm president Cristiano Amon has scotched rumours that it is planning to withdraw from ARM server-chip development.

"We are not looking at strategic options. We are not selling. We are still focused on it," Amon told Reuters in a bid to put the rumours to bed.

However, Amon did admit that Qualcomm had made staff cuts in the company's ARM server-chip development unit, following a cost-cutting decision to roll it into the company's CDMA Technologies unit, which designs and sells mobile phone chips.

The company only entered the market in 2015, when it released a 24-core ARM-based CPU targeted at the server market. However, the concept of powering servers with ARM-based chips hasn't yet caught on, while a number of start-ups have either shut down or scaled back their developments.

Intel's arm-lock on the server chip market therefore remains undisturbed, with only AMD posing anything remotely approximating to a challenge with its Epyc server CPUs, based on the Zen chip architecture.

AMD developed the standard x86-64 64-bit extension to Intel's x86 architecture in 2000, trumping Intel, which later licensed the technology to make it the de facto standard.

Given the lack of market headway for ARM-based servers, rumours mounted this year that Qualcomm planned to withdraw from the market entirely. In May, a person purporting to be 'familiar with the situation' told newswire Bloomberg that the chipmaker was looking to get out of the server space by either shuttering the division or selling it.

Qualcomm had initially pushed into the server chip arena as a means to diversify away from mobile, a market where it enjoys a commanding lead.

But the aggressive takeover bid from Broadcom forced Qualcomm executives to promise cost cuts to satisfy investors looking for increased profitability, with the server chip business identified as a prime target for such cuts.

Instead, Amon indicated that Qualcomm plans to focus its efforts on particular workloads and sectors where ARM-based CPUs can make the biggest difference for prospective customers, and where software architected to run on the x86-64 architecture isn't a barrier.

That means eschewing intensive corporate workloads and more narrowly focusing on internet and cloud computing companies in the US and China, in particular, that can make big savings in their server farms with ARM's more power-efficient architecture.

Reuters cited Alibaba, Tencent and Baidu, with whom Qualcomm has a joint venture in China, as particular sales prospects.

"It's very clear to us that the ARM opportunity is focused on a few players where you don't have the software x86 barrier to entry," Amon told Reuters.