Having been following semiconductor companies for years, “vote of confidence for Qualcomm from Intel” is a sentence I’d never thought I would write, but that is precisely the message in the Intel memo outlining a reorganization of its Sales, Marketing and Communications Group. In the leaked memo, the Global Strategic Account team led by Ryan McCurdy, who reports directly to the Chief Revenue Officer Michelle Johnston Holthaus, listed Qualcomm as a top strategic customer alongside Dell, HP Lenovo, Amazon, Microsoft, and Google. The rest of the names are not surprising as they are currently the largest buyers of Intel’s PC and server processors. Qualcomm, on the other hand, is a direct competitor to Intel in several markets.
The most reasonable explanation is that Intel is now treating Qualcomm less like a competitor in the processor market but more like a potentially significant customer for the new Intel Foundry Services business. At the “Intel Accelerated” event in July, the company announced that Qualcomm would be the first customer for the Intel 20A process node, previously known as Intel 5nm. However, the following week on the earnings call, Qualcomm CEO Christiano Amon appeared less enthusiastic about the potential collaboration and suggested they are still evaluating Intel’s technology.
“We are engaged. We are evaluating their technology. We don’t yet have a specific product plan at this point, but we’re pretty excited about Intel entering the space.”
Intel clearly has a big ambition for the leading-edge foundry business, but that can only happen if their process technology catches up to the current leader TSMC, and that is a big if for now. From Qualcomm’s perspective, they have the scale to leverage multiple foundry partners, and it only benefits them if they have a reliable second foundry outside of TSMC for stronger pricing power, if nothing else. Viewed as a strategic customer of Intel is a compelling vote of confidence for Qualcomm’s momentum in the market.
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