More signs the Qualcomm Centriq is in trouble

Qualcomm is preparing to lay off almost 280 employees, most of which are in the data center group.

More signs the Qualcomm Centriq is in trouble
Martyn Williams/IDG

Last month there were rumors that Qualcomm was looking to exit the data center business and abandon the Centriq processor, an ARM-based 48-core chip designed to take on Intel in the enterprise server market. The news seemed surprising, given Qualcomm had put years of work into the chip and had only just launched it a few months earlier.

Now Bloomberg adds further fuel to the fire with a report that the company is preparing to lay off almost 280 employees, and most of them are in the data center group. Bloomberg got wind of the layoffs due to filings with the state governments in North Carolina and California, which require advanced notice of significant layoffs.

The total number of cuts, including those not covered by such notices, will represent a third to half of the server-chip unit’s employees, according to a person familiar with the process. These layoffs come on top of previously announced layoffs of about 1,500 workers across the company.

Qualcomm can't compete with Intel

Bloomberg said Qualcomm evaluated future opportunities for the data center business before deciding that it would take too long to gain ground on Intel, which owns 99 percent of the enterprise server market, according to Mercury Research. Hell, I could have told them that.

The division will now concentrate on providing chips to some of the largest operators of cloud computing centers and Chinese customers, since Qualcomm has a joint venture to make the chips in that country, with customers such as Alibaba Group, Tencent, and Baidu.

Qualcomm President Cristiano Amon told Reuters last week that the company “remains committed to data center opportunities and is not divesting the assets. We are reducing our investments in the data center business but remain committed to our China JV and to refocusing our R&D efforts for upcoming compute opportunities.”

But that runs counter to what CEO Steven Mollenkopf said and didn’t say on the quarterly earnings call with analysts. He made no mention of Centriq and discussed the company’s commitment to reducing costs by $1 billion, partially by spending reductions “in our non-core product areas.”

At this point, they might as well pull the plug because these reports will only harm the Centriq in the eyes of potential customers. No one in their right mind invests in a technology that appears to be on its deathbed.

Meanwhile, Cavium scores a big win

This is the second win for Cavium, the last man standing in the ARM server business. Besides the 800-pound-gorilla giving up, it just scored a huge win with the deployment of the largest ARM-based supercomputer, Astra, at Sandia National Labs.

HPE announced that Astra, a 2.3 petaflops peak system, is on track for deployment at Sandia National Labs later this year as part of the National Nuclear Security Administration (NNSA) Vanguard project and will be the largest ARM-based system ever built, according to HPE.

Astra is based on the Apollo 70 ARM servers announced by HPE last year and all told, will feature 2,592 dual-socket servers with 5,184 Cavium 64-bit ARMv8-A ThunderX2 28-core, 2.0 Ghz processors, arranged in a dense 2U form factor for a total of 145,000 cores. The processors will have eight DDR4 memory channels vs. six channels in a Xeon for a total of 332TB of memory.

Now I ask you, who would you choose: Qualcomm or Cavium?


Copyright © 2018 IDG Communications, Inc.

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