Qualcomm to ship customized server chips

Qualcomm Inc said it expected to start shipping China-customized server chips around mid-2018, as the US tech giant ramped up its resources to tap into opportunities brought by the mainland's growing demand for internet data centers.

Qualcomm President Derek Aberle told China Daily in an exclusive interview that 2018 would be a very important year for the company's joint venture in Guizhou province, whose initial investment hit 1.85 billion yuan ($280 million).

The joint venture, called Guizhou Huaxintong Semiconductor Technology Co, was set up in January, with the Guizhou government owning a 55% stake and Qualcomm holding the remaining interest. It will start making tailor-made sever chips next year.

The joint venture unveiled a new research and development center in Beijing on Friday, which will help make chips commercially available. The move is part of Qualcomm's broader efforts to build up a presence in the server chip sector, which is currently dominated by Intel Corp.

"We've provided all the licensed technologies to the joint venture," Aberle said, adding the US group would send samples of its server chips to some customers at the end of the month and expected to initially sell them next year in the US market.

"The chips will have a customized security element for the China market that will be different from what is used outside of the country," Aberle said.

Qualcomm's move is an example of how international companies are adjusting their strategies in China, where State-owned firms are embracing homegrown IT products amid increasing concern about cyber security.

Aberle said earlier that the Huaxintong joint venture would be one of its biggest growth engines in five years, as China's Internet Plus initiative fuels an explosive growth of internet data centers.

According to research firm International Data Corp, the country consumed about 3.7 million units of server chips in 2015, and demand is expected hit 8.6 million units by 2020.

Roger Sheng, a senior analyst at research firm Gartner Inc, said Qualcomm was the first major company to build server chips based on the ARM architecture, a chip design that is widely used in smartphones and tablets.