Qualcomm Stakes Its Claim in PCs

SAN DIEGO – Qualcomm Inc. (Nasdaq: QCOM) is not mincing words about its Snapdragon X chips, now powering laptop computers from Microsoft, Samsung, Dell, HP and other makers.

“The PC Reborn” was the title of CEO Cristiano Amon’s talk during June’s Computex show in Taipei, Taiwan – and it remains Qualcomm’s slogan.

“We’re really making history together and the industry is starting to take notice … ,” the CEO said, acknowledging the work of Microsoft and the company’s other partners. “I believe it’s as significant as Windows 95.”

Qualcomm’s chip for PC laptops is different. It is based on technology from Arm Holdings PLC (Nasdaq: ARM), which is a departure from the x86 architecture of most other PCs.

What’s more, Qualcomm-powered high-performance laptops have AI, or artificial intelligence. The Snapdragon X system-on-a-chip features not just the conventional PC components of a central processing unit and a graphics processing unit, but a third component.

That is the neural processing unit or NPU – the seat of AI.

“Our belief continues to be that the PC hasn’t seen innovation in many years,” said Qualcomm’s Kedar Kondap. The new breed of PCs has Qualcomm excited, he said, and is “a very natural progression from where we are on our mobile side.” Kondap is senior vice president and general manager of compute and gaming at Qualcomm Technologies Inc., the chipset unit of the corporation.

An AI Name to Know

Qualcomm seems to be a rising star in the AI chip space – a good place to be in the five weeks since the stock of Santa Clara-based Nvidia Corp. (Nasdaq: NVDA) split 10-for-1.Since mid-May, shares of Qualcomm have traded mostly north of the $200 mark. The stock’s 52-week range has been $104.33 to $230.63, with the high point reached in mid-June. Shares closed Wednesday (July 10) at $208.80.

Qualcomm has had an NPU on its mobile platform “for more than seven years now,” said Kondap, who has been with the company since 2007.

“We’re very much leading the way with respect to on-device AI,” Kondap said. “And we feel like we have a strong hold. We have invested in this for many years. I think a lot of the competitors today have AI in the cloud, and I assume they’re going to have AI on the device very soon. For us, we’ve had the assets for a while.”

Qualcomm’s partnership with Microsoft is strong, he added.

45 Trillion Operations Per Second

Qualcomm boasts the fastest and most efficient NPU for laptops, capable of 45 trillion operations per second (also known as TOPS). The TOPS rate of Apple’s M3 chip is “significantly lower,” Kondap said.

The NPU brings an artificial intelligence capability and powers the Copilot+ function in the computer, which runs the new Windows 11 operating system from Microsoft.

The capability of achieving 45 TOPS “puts Qualcomm in a favorable position relative to Intel and AMD, at least for now,” wrote Michael Rubin of Moor Insights & Strategy in a paper commissioned by Qualcomm. The two traditional PC chipmakers are expected to bring their next-generation chips to market later this year.

Qualcomm’s CPU, called Oryon, is used in the X series platform. Snapdragon Elite has a dozen cores, including dedicated heterogeneous cores such as a graphics core, an audio-video core and a camera core. “That’s what makes the X-series platform very compelling,” Kondap said.

‘From the Ground Up’

Qualcomm is a fabless semiconductor maker, meaning that it outsources its manufacturing. Taiwan Semiconductor Manufacturing Co. (TSMC) produces the Snapdragon X chips in the 4-nanometer process, meaning that the width of individual electrical pathways is 4 nanometers (approximately 0.00000016 inches).

Snapdragon X was “built from the ground up,” Qualcomm said. The chips contain much Qualcomm intellectual property, though the company declined to give a patent count for the typical Snapdragon X chip.

Some parts of the chip were designed “a couple years in advance,” Kondap said in a recent interview. Silicon and software teams in San Diego, the San Francisco Bay Area and other dispersed locations drew up plans for Snapdragon X. The team included former members of Nuvia, a company Qualcomm acquired in March 2021 for $1.4 billion, and since integrated into the company.

The Nuvia angle may pose trouble for Qualcomm. Arm announced in August 2022 that it is suing Qualcomm over Arm technology that had been licensed to Nuvia. A Reuters report said the contract dispute was one discussion topic at the June conference in Taipei.

Elite and Plus and Possibly More

For now, Qualcomm produces two models, Snapdragon X Elite and Snapdragon X Plus. It looks as though it will broaden its line.

“Let’s just put it this way … ,” Kondap said regarding internet rumors of additional Snapdragon X models. “We’re investing in this business for the long term. So, it’s only fair to say that we’ll have something more coming out in the future, but I’m not at liberty to share exactly what. … I think right now is the moment for us to celebrate the launch of the X-series platforms, more specifically the X Elite and the X Plus platforms.”

The chip was designed for optimal battery life, which is evidence of its Qualcomm heritage. The San Diego company, just shy of its 40th birthday, got ahead in the smartphone world by designing products that conserve power.

“We come from this DNA,” Kondap said. “When we design chips …, we obviously think of power first.”

A Development Like the Internet PC

The introduction of the AI PC is as groundbreaking as the “Internet PC” of the late 1990s, wrote Rubin of Moor Insights & Strategy. He pointed out the introduction of the Ethernet port at a time when desktop computers were isolated, and people didn’t venture out onto the World Wide Web.

“Tens of millions of Internet PCs were sold with Ethernet ports that remained mostly unused, sometimes for years, until high-speed internet was universally available,” Rubin wrote. “The Copilot+ PC is similarly positioned, but with a much larger potential scale of transformation in terms of user experience.”

Computer users of 2024 may not know what to do with AI. That doesn’t faze Kondap.

“The most interesting part is that humans don’t even understand what AI really is yet, but they are soon going to be able to benefit from this,” the executive said.

Consider background block for video calls. “We all used it during COVID,” Kondap said.

“When we were on remote calls, we had background block on all the time. Believe it or not, those features started getting developed on our NPU through Microsoft experience packages. Simple things such as case correction, eye contact – you could be looking down at your script but the person on the other side thinks you’re actually looking at the camera.” All of those AI features come from the NPU.

More change is on its way, Kondap said.

“You look at things out in time, almost everything is going to change with the world of AI. For example, there isn’t a single industry that’s not going to get transformed with AI. We can talk about manufacturing, we can talk about AI in operations, AI in business, AI in law, AI in entertainment. You name it. There isn’t a single industry that will not benefit from it. And it’s just going to be part of business.”

As for this summer’s arrival of Snapdragon X?

“I think overall the PC’s going to get a lot more exciting with the launch that we just had,” Kondap said.n

Qualcomm Inc.FOUNDED: 1985CEO: Cristiano AmonHEADQUARTERS: Sorrento Mesa, San DiegoBUSINESS: Fabless semiconductor maker, specialist in developing and commercializing foundational technologies for the wireless industryREVENEUE: $38.5 billion in fiscal 2023STOCK: QCOM (Nasdaq)WEBSITE: qualcomm.comCONTACT: 858-587-1121NOTABLE: Qualcomm has had a neural processing unit (NPU) for artificial intelligence on its mobile platform for more than seven years