Qualcomm’s ARM server chip inches forward, while AppliedMicro forges ahead

As Qualcomm develops, AppliedMicro's ARM server part is being called competitive with x86

Qualcomm’s long-awaited server chips may start going into systems in the second half of next year, judging from comments by the company's president.

In answer to an analyst’s question on Qualcomm's quarterly earnings call Wednesday, President Derek Aberle gave the most specific forecast yet for the chips, which will mark Qualcomm’s entry into server processors.

“Our assumption is that we will be shipping samples toward the end of the year, and revenue would be something that would flow through mid to late next year,” Aberle said.

But Thursday brought some bad news for Qualcomm if it hopes to become an early winner in the fledgling ARM server chip market. Research company Linley Group released a white paper that rated AppliedMicro’s X-Gene 3 ARM chip favorably against Intel’s Xeon E5.

“Based on what I have learned from AppliedMicro and observed in their labs, X-Gene 3 promises to be the breakthrough ARM-based processor that the data center market has long desired for general purpose computing and mainstream workloads,” Principal Analyst Linley Gwennap said in a statement.

Qualcomm has already provided a development platform with a pre-production version of its chip to tier-one data centers, which could become major customers. But the company has been vague about when its products will be widely available.

The ARM architecture, which ARM Holdings licenses to numerous chipmakers, is used in most mobile devices and is more energy-efficient than x86. In the past few years, vendors have started to explore using ARM for server chips, and the trend is growing slowly. Hewlett Packard Enterprise’s Moonshot servers can run on either x86 or ARM, and several system makers have adopted ARM server chips from Cavium, AMD and AppliedMicro.

So far, the trend is mostly isolated to large cloud and Web-scale companies. But Qualcomm, a big player in ARM-based mobile chips, has been slower than expected to try to gain a foothold in data centers.

A new market in servers could be just what the company needs. In the quarter that ended March 27, Qualcomm’s revenue fell to $5.6 billion, down 19 percent from a year earlier. Among other things, executives said the market for high-end smartphones, many of which use Qualcomm’s chips, was softer than expected. The company also forecast total device sales in the current quarter to fall by as much as 14 percent.

But there was good news, too. Qualcomm has signed several licensing agreements in China, where last year it resolved a monopoly probe by paying a $975 million fine and agreeing with the government on a set of licensing terms. More than 100 manufacturers in the country have now agreed to those terms, Qualcomm said.

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