Qualcomm faces existential risk

Washington [US], October 24: Not only facing a big challenge from the handshake between Intel and AMD in the laptop chip segment, Qualcomm is also at risk of losing its position in the smartphone chip segment when Arm canceled its technology agreement.
Yesterday (October 23), Bloomberg reported that British company Arm is canceling the agreement allowing Qualcomm to use its chip design architecture copyright.
existential risk
Recently, the two sides have been in a tense legal dispute. The reason is that in 2021, Qualcomm acquired Nuvia Company for 1.4 billion USD. This is a startup company founded by former members of Apple. From this deal, Qualcomm has developed a number of Oryon core chip lines with many breakthroughs for use in both smartphones and laptops.
However, Arm argues that Qualcomm cannot use Nuvia's technological achievements without Arm's consent. According to Arm, the agreements that the company gave to Nuvia had incentives because it was a startup company. When Qualcomm acquired Nuvia, it was no longer a "startup" and so the details of the agreement had to be changed.
Meanwhile, Qualcomm's key chip products in recent times have all relied on Arm's architecture. Therefore, if Qualcomm really cannot use Arm's architecture, all of Qualcomm's Snapdragon chip platforms may stop production. Meanwhile, Qualcomm's Snapdragon chips are an indispensable component in most Android-based smartphones and many laptops that integrate many artificial intelligence (AI) technologies in collaboration with Microsoft.
If Qualcomm has to stop supplying Arm-based chips, it will also affect the new product launch plans of many smartphone brands such as Samsung, Oppo, Xiaomi... And of course, laptop manufacturers such as Dell, HP, Asus, Lenovo, Microsoft... will also be affected for the AI ​​Copilot+ laptop lines that integrate Snapdragon X Plus and X Elite chips.
All of that makes the Arm-related risk now potentially a "fatal blow" for Qualcomm.
Misfortunes never come singly.
Meanwhile, Qualcomm is facing another challenge in the laptop processor segment. Over the past few years, Qualcomm has been pushing to develop laptop processors based on the Arm architecture, rather than the x86 architecture used by Intel and AMD.
In late 2023, Qualcomm made a big splash with its Snapdragon X Plus and X Elite platforms based on Arm architecture for AI laptops. Qualcomm also partnered with Microsoft to enhance AI support for these laptops, pioneering the Copilot+ laptop generation. However, Qualcomm's efforts are facing strong opposition from Intel and AMD, especially when the two leading names in chip development on x86 architecture cooperate with each other.
Last week, AMD CEO Lisa Su and Intel CEO Pat Gelsinger appeared together at a technology event in the US. Here, the two rivals agreed to form an alliance to coordinate the development of chips based on the x86 architecture, aiming to open a new future for this architecture. This is considered a move to coordinate Qualcomm's strategy.
The alliance includes many names in the technology industry such as: Microsoft, Google and Meta, Lenovo. Speaking at the event, AMD CEO Lisa Su and Intel counterpart Pat Gelsinger reaffirmed that the x86 architecture is "alive and growing".
Meanwhile, AI laptops with integrated Snapdragon X Plus or X Elite chips still have many limitations when running many popular applications. For example, with the Google Drive application, you can only use the web version.
Due to many limitations, investors have reacted negatively to Qualcomm after the Snapdragon X Plus and X Elite laptops were officially sold in mid-June. On the US stock market, as of yesterday, Qualcomm's stock price was at $169.50, down about 25% from the peak of more than $227 when the Snapdragon X Plus and X Elite laptops were sold in mid-June.
Source: Thanh Nien Newspaper