Report: Qualcomm Ending Joint Server Chip Venture With China

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The Information reported today that the joint venture between Qualcomm and China’s Guizhou province will shut down by the end of the month. Qualcomm had already effectively killed the joint venture last year, when it cut its own workforce there by 95% and gave Guizhou the whole Centriq chip IP.

Qualcomm Calls it Quits

Executives at the Huaxintong Semiconductor (HXT) joint venture between Qualcomm and the Chinese Guizhou province seem to have said in internal meetings on Thursday that the venture will end on April 30. Qualcomm and Guizhou had already laid off 950 of the venture’s 1,000 employees back in 2018, so the shutdown isn’t a complete surprise.

The joint venture between Qualcomm and the Guizhou province was created in 2016 for the design and development of advanced server technology based on the Arm instruction set architecture (ISA). The joint venture members have invested a combined $570 million in HXT as of August 2018.

Qualcomm’s Centriq Potential to Disrupt Intel

With Intel dominating the server chip market and many customers looking for some alternative in the market - any alternative - Qualcomm had significant potential on its side. The Qualcomm Centriq 2400 had 48 cores, was built on a competitive 10nm process and cost a fraction of the equivalent Intel chips.

The only downside - perhaps too great of a downside - was that it used the Arm ISA, which is still in the early days of being adopted by server software. This negatively impacted adoption and, therefore, Qualcomm’s sales.

However, Qualcomm still stood a chance in succeeding in the market, due to high demand for an Intel alternative. Even Microsoft, which has been working with Qualcomm for the past few years to support Snapdragon chips in the full Windows 10 operating system, committed to using some Centriq 2400 chips in its data centers.

An EPYC Threat

Things should have been looking on the up and up for Qualcomm from that point forward, but then AMD announced its EPYC server chip. Suddenly, Qualcomm seemed less likely to be the one to dethrone Intel.

AMD’s server chip launched with even higher performance and also cost a fraction of Intel’s server chips. Even better, it was an x86 chip, so virtually all the software that worked on Intel’s chips also worked on the EPYC chip.

AMD was also better known than Qualcomm in the server chip space, so it was easier for the company to convince customers to switch away from Intel than it was for Qualcomm (it hasn't been a walk in the park for AMD either, though).

What's Next?

Qualcomm may have given up on the server chip market, but it’s only just beginning in the notebook and PC markets. Microsoft seems to keep making improvements for the support of Qualcomm’s Snapdragon processor in Windows 10, while Qualcomm itself is now doubling down on the design and performance of its chips for this specific market with the launch of the Snapdragon 8cx.

With the Snapdragon 8cx, Qualcomm is attempting to both compete with Intel on some metrics, such as performance, while also best it on others (power consumption, heat management, LTE/5G support, etc). However, it remains to be seen not just how this particular chip will fare on the market, but also how committed Qualcomm will remain to what is poised to be a multi-year battle against both Intel and AMD.

Lucian Armasu
Lucian Armasu is a Contributing Writer for Tom's Hardware US. He covers software news and the issues surrounding privacy and security.