Google tipped to endorse Qualcomm’s server chips over Intel

JC Torres - Feb 5, 2016, 3:30 am CDT
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Google tipped to endorse Qualcomm’s server chips over Intel

Intel‘s server business, which is currently its strongest business, might soon be shaken up. And not directly by a rival chip maker. Instead, it will be Google‘s expected endorsement next week that could spell trouble for Intel. According to insider sources, Google, who is considered to be the world’s biggest buyer of server processors, will be publicly singing of Qualcomm‘s server chips at an investor event next week. Qualcomm, who already poses a threat to Intel because of its dominance in the mobile market, could soon be eating a huge chunk of Intel’s server pie as well.

If true, this could spell trouble for Intel more than any of its previous market problems, like its inability to quickly adapt and address the rapidly growing smartphone market. Its server business has helped save Intel and keeps it at the top of the processor food chain. Even AMD’s attempt to wrest the crown away without much effect. Now Intel faces even greater competition against ARM, traditionally accepted to be more power efficient. And one of the greatest proponents of that CPU architecture is Qualcomm.

In this case, the decision to endorse Qualcomm’s chips might be more about business than performance, though of course it’s difficult to separate the two in this context. In fact, the deal between that two hasn’t been finalized yet, with Google still waiting if the CPU design will meet its performance requirements. That might take a lot of work. While power-efficient, ARM chips don’t always stand head to head with x86 architecture. Even AMD’s new ARM server chips show as much.

The move, instead, might be a way to break Intel’s dominance in the server market. By being the top dog, Intel is able to drum up prices with confidence that customers will have little choice to object. Given how much Google purchases server processors yearly, it literally won’t be able to afford to keep the status quo.

That said, Google isn’t Intel’s only big customer either. Both HP and Dell also rank at the top and neither seem to have any inkling towards ARM-based server processors for the moment.

SOURCE: Bloomberg


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