Qualcomm to buy Nuvia, a chipmaker founded by ex-Apple engineers, for $1.4 billion  

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Qualcomm to buy, Nuvia, a chipmaker founded by ex-Apple engineers, for $1.4 billion.
Image: Qualcomm

Qualcomm announced it would acquire Nuvia, a chip startup founded by three former ex-Apple engineers, for $1.4 billion.

The corporation did not offer a time frame for its purchase of the firm but did note that it would apply its technology across its lineup. It also said the company’s leaders, Gerard Williams, John Bruno, and Manu Gulati, will be joining its ranks.

Last year, Nuvia raised $240 million on the strength of its high-performance computing (HPC) data center processors.

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Why Qualcomm Bought Nuvia for $1.4 Billion

Qualcomm explained it purchased Nuvia to broaden its technological resources and knowledge base.

Before being acquired, the startup made its name designing central processing units (CPUs) with robust efficiency, remarkable density, and low cost of ownership. Last September, the firm detailed plans to take on the semiconductor industry’s largest providers with its server silicon. In addition, Williams, Bruno, and Gulati helped design Apple’s well-regarded A-series mobile processors prior to founding Nuvia.

By snapping up the startup’s assets and expertise, Qualcomm will be better positioned to take on its rivals and win new business.

The corporation indicated it had an interest in leveraging Nuvia’s brain trust to improve its 5G offerings. The chipmaker’s CEO-elect, Cristiano Amon, recently said fifth-generation networking technology represents “one of the single largest opportunities” for his employer. Qualcomm highlighted smartphones, extended reality (XR), notebooks, automotive systems, and networking infrastructure as areas of interest in a press release.

Near-Term Implications

Given the amount of capital involved, Qualcomm will likely have Nuvia’s staffers apply their skills across its various businesses. That said, the corporation probably intends to immediately focus the group’s attention on developing smartphone and HPC data center processors.

Since the fabless chipmaker makes the bulk of its revenue from designing handset parts, it needs to maintain its leading position in the space. Ideally, Williams, Bruno, and Gulati will spearhead to help the firm launch integrated mobile CPU akin to Apple Silicon’s offerings. That would enable the company to maintain its lucrative business relationships with mobile device makers like Samsung, Oppo, and Vivo.

Qualcomm could secure new deals with notebooks bookmakers Acer, HP, and ASUS if it creates new best-in-class laptop CPUs. Thus far, the corporation’s personal computer processors have been underwhelming, but that could change with Nuvia’s engineers driving development.

The semiconductor company also wants to establish a solid foothold in the data center field because of recent developments.

Traditionally, Intel has maintained a tight grip on that sector because of the outstanding quality of its HPC chips. But its ongoing manufacturing problems have created a window of opportunity for rivals like Nvidia and Advanced Micro Devices (AMD). Qualcomm, which is not a major server component vendor, wants a piece of that $200 billion market. Based on its pre-acquisition roadmap, the Nuvia team can help it realize that goal.

Long-Term Plans

The chipmaker likely intends to use its new talent to grow its business in other segments in the long-term.

The company also wants to be a dominant player in the increasingly digitized automotive sector. If it can develop digital cockpits with leading infotainment and advanced driver-assistance systems, that will happen. It has already piqued the interest of auto industry titans like General Motors, Bosch, Continental, and Renault as those corporations praised Qualcomm’s new acquisition in its buyout press release.

As an independent operation, Nuvia seemingly did not have an interest in shaking up the worldwide automobile industry. But Qualcomm could utilize the architecture foundations used in its HPC data center chips to design new automotive processors or vehicle-to-infrastructure components. The acquiring firm could earn lots of money by landing government contracts to establish self-driving car networks in various major cities.

The semiconductor vendor probably should not task Nuvia’s executives on any XR project right away. At this point, that market’s growth is severely hamstrung by a lack of popular hardware and digital infrastructure. If Apple, Microsoft, Google, or Facebook mainstreams the technology by deploying a connected eyewear solution, the landscape will be different.

Regardless of what happens next, Qualcomm’s purchase of Nuvia will likely have major implications for its future. Potentially, the firm’s acquisition could be the catalyst for a major multi-industry expansion that puts it on the same footing as the semiconductor industry’s leading providers.

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