Qualcomm Server Chips to Get Google Seal of Approval, Intel in Danger

Bloomberg reports that Qualcomm may have just gotten a seal of approval from Google. Sources close to the matter stated that Google will publically support Qualcomm's server chips at an investor event next week. In an Intel dominated market, a move like this will be a major PR boost for Qualcomm.

Google uses server chips to run the highly profitable business, and it routinely buys processors to run its power-guzzling servers.

Since these plans have not been made public yet, according to sources, the two companies have already met over some design work. Moreover, Google will only move ahead with the partnership if it finds Qualcomm's processors powerful enough for its search engine. Hopefully, no overheating issues will arise this time around.

This is a rather strange shift in the server plates as Intel previously wrestled with Advanced Micro Devices (AMD) in 2006 to supply 99% of chips used in Google's data centers in the US and around the world. Similarly, Qualcomm, Inc. (NASDAQ:QCOM) has been diversifying into other categories such as drones and servers due to the stagnating smartphone market that's negatively affecting profits around the world.

Bidness Etc believes that this move will help Google cut down the expenditure on its equipment. As per Bloomberg, the search engine giant buys as much as 300,000 processors every quarter to help sustain the growing search business. Since AMD has been out of the picture, Intel Corporation (NASDAQ:INTC) has had an open hand in pricing its server chips. However, Qualcomm's entry into the field is likely to displease Intel, considering that its selling power may decrease. However, this will be good news for Google as it can then negotiate the prices of future equipment.

Subsequently, Intel is also going to feel the crunch as the company has been hedging the losses of falling PC sales through its server chip division. Now, in the case Qualcomm does get a spot in the search engine giant's ledger, things may look good for the semiconductor company and possibly gloomy for Intel.