Chip design firm Qualcomm says it’s in “advanced discussions” with a hyperscale customer who wants its silicon to use in datacenters but may lose a major mobile customer to Samsung. Qualcomm has teased a serious run at the datacenter market for years and in May CEO Cristiano Amon told the Computex conference in Taiwan that he sees “CPU changed for the age of AI" as one way into the market.

On Wednesday, Amon used Qualcomm’s Q3 earnings call to deliver an update on the company’s datacenter ambitions.

“As inference games scale, cloud service providers are building dedicated inferencing clusters focused not only on performance, but also efficiency, specifically tokens per dollar and tokens per watt,” the CEO said. “These factors combined with the shift from merchant x86 CPUs to custom ARM compatible CPUs for both cloud computing and AI head node create an entry point for Qualcomm.”

Later on the call, Amon said Qualcomm is developing “a general purpose CPU” and is “very focused on hyperscalers” because “They have first party workloads for ARM compatible CPU.”

He then described another datacenter product Qualcomm is working on as “the head unit for inferencing clusters,” then added “we have been building accelerator cards and we will be building a rack as well.”

Amon said Qualcomm’s recently-announced acquistition of connectivity specialist Alphawave Semi “will complement our Orion CPU and Hexagon NPU processors and help accelerate our roadmap.”

“While we are in the early stages of this expansion, we are engaged with multiple potential customers and are currently in advanced discussions with a leading hyperscaler,” he said. “If successful, we expect revenues to begin in the fiscal 2028 timeframe.”

For what it’s worth, rival chip designer Broadcom says it has several hyperscale clients who want a million or more custom accelerators starting in 2026, meaning Qualcomm may be late to the AI infrastructure party.

Qualcomm also looks to have a fight on its hands in the premium smartphone market, as Samsung on Thursday announced it will focus on improving the competitiveness of its Exynos systems-on-chip (SoC) “to ensure its adoption in 2026 flagship mobile lineups of a major customer.” The company also said its foundry business “will ramp up mass production of a new mobile SoC with the 2nm GAA process” in the second half of 2025.

Samsung didn’t identify that customer, but the Korean giant is the only smartphone manufacturer that regularly uses Exynos in flagship devices.

This year’s Galaxy S25 range, however, used only Qualcomm’s Snapdragon SoCs. Samsung talked up those phones’ AI capabilities, so presumably making Exynos more competitive means improving its AI performance – which building on a 2nm process could enable.

Samsung needs better products that catch the AI wave because, as the company predicted, revenue and profits fell in the second quarter of 2025.

The company posted ?74.6 trillion revenue (down 5.8 percent from last quarter) and operating profit of ?4.7 trillion. Those figures were in line with guidance.

The company promised to prioritize production of high-density memory products in the second half of 2025, to meet demand from cloud providers.

But the company warned its chipmaking business “remained weak due to the impact of inventory value adjustments that stemmed from US export restrictions on advanced AI chips to China, as well as a continued low utilization rates at mature nodes.

Meanwhile, back at Qualcomm

Qualcomm’s results were rather happier. The company’s revenue grew ten percent year-over-year to $10.35 billion, and net income climbed 25 percent to a devilishly good $2.666 billion.

Revenue from products used to make smartphones grew seven percent to $6.8 billion, and automotive revenue grew 21 percent to $984 million. Internet of things products were the star of the show, producing 24 percent growth to $1.68 billion.

Amon said Qualcomm’s PC business is “steady”, over 100 laptops will use its PC processors by 2026, and added that the company has won around nine percent of the market for Windows laptops sold for $600 or more at US retailers.

The CEO also expressed optimism about the growing market for smart glasses, which Qualcomm currently dominates.

Investors weren’t impressed as Qualcomm’s share price dived from around $159 to $149 in after-hours trading, before rebounding to $151.

By: DocMemory
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