It's a different competitive landscape in servers, despite analysts calling Centriq 2400 the best ARM server chip to date. Intel dominates servers with Xeon chips, and companies won't easily change over from x86 to ARM because it would require wholesale changes in the hardware and software infrastructures.
Moreover, ARM servers haven't caught on despite being around for more than three years. Qualcomm could rekindle some interest in ARM servers with Centriq 2400, which has 48-cores and high levels of I/O and networking interface integration.
Qualcomm has said it will take a wait-and-watch approach with server chips. The goal is to avoid mistakes made by other ARM server makers like Calxeda, which folded, and AMD, which is re-focusing on x86 after putting ARM on the back burner. Other ARM server chipmakers Cavium and AppliedMicro are struggling.
The server chip is targeted at large cloud server installations, and Qualcomm is working with a few unnamed customers. If cloud companies believe custom software and Qualcomm chips will cost less than Intel Xeon chips, they may switch over. The competition could also provide bargaining power to Intel's server customers, who could acquire chips at cheaper prices.
But a few server installations won't be enough to dent Intel's server dominance. Qualcomm will also compete with IBM's Power9, which is aiming for a double-digit market share in servers by 2020.
The market for ARM chips has also declined with applications like machine learning, which require brawnier processor cores like x86. ARM is considered a "wimpy" core that provides strength in numbers. Intel has a wide lead over Qualcomm in machine learning with an assortment of deep-learning chips like the Xeon Phi and FPGAs (field programmable gate arrays) in its arsenal.
There is a separate competition brewing in the IoT market, in which Qualcomm has a big advantage over Intel. Qualcomm dominates in telematics, and is spending US$47 billion to buy NXP Semiconductor, which provides circuitry for cars, IoT devices, and other low-power devices. Intel is trying to grow its profile in the market and has made numerous acquisitions.
The mobile market should be a long-term strength for Qualcomm, but it is facing competition from MediaTek and companies like Samsung and Apple that design chips internally.
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