Qualcomm to acquire server chip startup NUVIA for $1.4 billion

The deal is expected to face regulatory challenges due to potential antitrust implications

Leading chipmaker Qualcomm announced on Wednesday that it has entered into a definite agreement to acquire server chip startup NUVIA for about $1.4 billion, excluding working capital and other adjustments.

Qualcomm plans to integrate NUVIA processors with its current portfolio of products which includes mobile chips for high-end smartphones, digital cockpits, next-generation laptops, extended reality, advanced automobile systems and infrastructure networking solutions.

Analysts believe NUVIA's acquisition could have a big impact on Qualcomm's future as the company looks for new opportunities to expand in the PC, mobile and server chip markets. The acquisition will also give Qualcomm the ability to better match Apple's A-series mobile chips, which have delivered class-leading specs for tablets and smartphones.

Qualcomm said the growth of 5G technology, which is further accelerating the convergence of computing and mobility, is one of the main reasons for the NUVIA acquisition.

Server chipmaker NUVIA employs some leading industry veterans, including Manu Gulati and John Bruno, led by ex-Apple chip architect Gerard Williams, who founded the firm in 2019 after leaving Apple. A non-compete agreement prohibited Williams from competing directly with Apple, so he went into the performance-focused server market after founding NUVIA.

Last year, Apple filed a lawsuit against Williams, accusing him of breaching the terms of his contract. The iPhone maker said that Williams began planning a rival business while he was still working at Apple. Williams rejected Apple's accusations in a counterclaim, accusing the firm of attempting to steal NUVIA staff in an effort to stifle the startup.

In the past year, NUVIA had recruited a lot of top talent from various CPU design teams and had planned to enter the high-performance computing market with a new server SoC.

However, being a new entity in the chip industry, it was fighting a tough battle against the established chipmakers.

Qualcomm's press release on Wednesday included statements from Qualcomm's partners such as Microsoft, Google, Samsung, ASUS, Xiaomi, HMD Global, ASUS and General Motors, who all expressed their support for Qualcomm's proposed acquisition of NUVIA.

"It's exciting to see NUVIA join the Qualcomm team," said Panos Panay, chief product officer at Microsoft.

"Our partnership with Qualcomm has always been about providing great experiences on our products. Moving forward, we have an incredible opportunity to empower our customers across the Windows ecosystem."

Hiroshi Lockheimer, SVP platforms & ecosystems at Google, commented: "Compute performance, connectivity and power efficiency are critical ingredients that make the billions of Android and Chrome OS devices shine."

"The addition of NUVIA extends Qualcomm's capabilities in these three areas, and we're excited to see the next generation of Snapdragon with NUVIA."