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Behind Qualcomm’s Retreat From Data Center Business

Three years ago, Qualcomm mounted an attack on Intel in the market for server chips used in the highly profitable data center business. By June the effort was a shambles. As the company laid off hundreds of workers in the data center unit in North Carolina, a collection of tech giants—including Microsoft, Intel, Samsung and Nvidia—swooped in to recruit chip engineers freshly let go from Qualcomm, meeting with them at a hotel across the street.

While Qualcomm has publicly acknowledged cutbacks in the unit, it has maintained its data center efforts are merely “refocused,” not dead. Yet several people familiar with the matter said the company’s retrenchments go deeper than previously reported, including the cancellation of an unannounced new server chip that the team had begun advanced work on, raising questions about the future of the unit. Meanwhile, outside bids to acquire the business have collapsed—including one by Qualcomm’s former leader Paul Jacobs and another from Ampere Computing, according to several people. Neither bid has been reported before.

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