Qualcomm faces an existential risk.

Not only is Qualcomm facing a major challenge from the partnership between Intel and AMD in the laptop chip market, but it also risks losing its market share in the smartphone chip market after Arm canceled its technology agreement.

Yesterday (October 23), Bloomberg reported that Arm (UK) is in the process of canceling the agreement that allowed Qualcomm to use its chip design architecture patents.

Survival risk

Recently, the two sides have been embroiled in a tense legal dispute. This stems from Qualcomm's acquisition of Nuvia in 2021 for $1.4 billion. Nuvia is a startup founded by former Apple employees. Following this acquisition, Qualcomm developed several lines of chips with the Oryon core, featuring numerous breakthroughs for use in both smartphones and laptops.

However, Arm argues that Qualcomm is not allowed to use Nuvia's technological advancements without Arm's consent. According to Arm, the agreements that the company granted to Nuvia included preferential treatment because it was a startup, and when Qualcomm acquired Nuvia, it no longer had the "startup" nature, so the details of the agreement had to be changed.

Meanwhile, Qualcomm's key chip products in recent years have all relied on Arm's architecture. Therefore, if Qualcomm truly cannot use Arm's architecture, the entire Snapdragon chip platform of Qualcomm could cease production. At the same time, Qualcomm's Snapdragon chips are an indispensable component in most Android smartphones and many laptops integrating various artificial intelligence (AI) technologies in collaboration with Microsoft.

Qualcomm is facing many challenges.

If Qualcomm has to stop supplying chips with the Arm architecture, it will affect the new product launch plans of many smartphone brands such as Samsung, Oppo, Xiaomi… And of course, laptop manufacturers like Dell, HP, Asus, Lenovo, Microsoft… will also be affected, especially with regard to their Copilot+ AI laptops that integrate Snapdragon X Plus and X Elite chips.

All of that means the risks associated with Arm could now become a "fatal blow" to Qualcomm.

Misfortune never comes alone.

Meanwhile, Qualcomm is facing another challenge in the laptop processor market. Over the past few years, Qualcomm has focused on developing laptop processors based on the Arm architecture, rather than the x86 architecture used by Intel and AMD.

In late 2023, Qualcomm garnered significant attention with its Snapdragon X Plus and X Elite platforms based on the Arm architecture for AI laptops. Qualcomm also partnered with Microsoft to enhance AI support for these laptops, pioneering the Copilot+ generation of laptops. However, Qualcomm's efforts are facing significant opposition from Intel and AMD, especially now that these two leading developers of x86-based chips are collaborating.

Last week, AMD's Lisa Su and Intel's Pat Gelsinger appeared together at a technology event in the US. There, the two rivals agreed to form an alliance to jointly develop chips based on the x86 architecture, aiming to open up a new future for this architecture. This is seen as a coordinated move to counter Qualcomm's strategy.

The aforementioned alliance includes many big names in the technology industry such as Microsoft, Google, Meta, and Lenovo. Speaking at the event, AMD CEO Lisa Su and her Intel counterpart Pat Gelsinger reaffirmed that the x86 architecture "is still alive and thriving."

Meanwhile, AI laptops with integrated Snapdragon X Plus or X Elite chips still have many limitations when running popular applications. For example, the Google Drive application can only be used in its web version.

Due to numerous limitations, after laptops equipped with Snapdragon X Plus and X Elite processors officially went on sale in mid-June, investors reacted negatively to Qualcomm. On the US stock market, as of yesterday, Qualcomm's share price was at $169.5, down about 25% from its peak of over $227 reached when laptops running Snapdragon X Plus and X Elite were released in mid-June.

Qualcomm launches new chip, in collaboration with Google.

On October 22, Qualcomm announced a long-term strategic partnership with Google to deliver AI-generated digital cockpit solutions to drive digital transformation in the automotive sector.

Building on a long-standing relationship, the two companies will leverage complementary technologies from Snapdragon Digital Chassis, Android Automotive OS, and Google Cloud to create a new set of standards to support the development of AI-generated cockpits.

Earlier, at the opening session of the Snapdragon Conference on October 21st, Qualcomm Technologies, Inc. launched the Snapdragon 8 Elite Mobile Platform for mobile devices, which is said to have the most powerful processing capabilities and the fastest speed in the world to date.

Source: https://thanhnien.vn/qualcomm-doi-mat-rui-ro-song-con-185241023231054995.htm