Qualcomm competes with Apple and Intel with a $ 1.4 billion startup

Qualcomm Inc said on Wednesday that it will acquire Nuvia Inc, a chip startup founded by Apple veterans, for $ 1.4 billion, with plans to put the company’s technology into smartphone, laptop and auto processors.

The deal represents a major push by Qualcomm to re-establish a leading position in chip performance after several years of high-profile patent licensing litigation with rival Apple and regulatory authorities.

It also comes amid a leadership change as Qualcomm announced this month that Cristiano Amon, its current president and head of silicon, will replace outgoing CEO Stephen Mullenkoff, effective June 30.

Founded by three former Apple senior semiconductor executives in charge of iPhone chips, Nuvia is working on a special CPU design that it said will be used in the server chips.

However, Qualcomm plans to make widespread use of the Nuvia processors, saying it will power flagship smartphones, next-generation laptops, infotainment systems and driver assistance systems among other applications.

While laptop makers have traditionally switched to Intel Corp for processors, Qualcomm has been supplying computer chips for several years to companies like Samsung Electronics Co Ltd and Microsoft Corp.

“It’s exciting to see Nuvia join the Qualcomm team,” Panos Panay, Microsoft’s chief product officer, said in a statement about the deal.

“From now on, we have a great opportunity to empower our customers across the Windows ecosystem.”

The deal is also important because it could help reduce Qualcomm’s dependence on Arm Ltd, which competitor Qualcomm Nvidia Corp is buying for $ 40 billion.

Most of Qualcomm’s current chips use computing cores licensed directly from Arm, while Nuvia cores use the Arm core architecture but are custom designs.

For Qualcomm, using more custom core designs – a move Apple has also made – could lower some licensing costs for the Arm in the short term and facilitate the transition to a competitive architecture in the long term.

While Qualcomm and Apple have resolved disputes over Qualcomm’s patent ownership rights, Nuvia and Apple have been at odds.

In 2019, Apple filed a lawsuit against Gerard Williams III, CEO of Nuvia, alleging that Williams recruited employees for Nuvia while he was still working for Apple.

Apple Nuvia itself has not sued, has not claimed any intellectual property theft, and no trial date has been set.

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