Qualcomm Bolsters 5G Ambitions With Planned $1.4 Billion Acquisition
By Asa Fitch
Mobile-phone chip giant Qualcomm Inc. said Wednesday that it has
agreed to acquire a chip startup founded by former Apple Inc.
engineers, adding to a wave of deals remaking the semiconductor
Qualcomm said it plans to buy Nuvia Inc. and use the
two-year-old company's technology in its flagship smartphones,
driver-assistance systems, laptops and networking infrastructure.
The proposed all-cash transaction is valued at about $1.4 billion,
Qualcomm said, before working capital and other adjustments.
Nuvia's expertise in designing central processing units,
Qualcomm said, would help it boost chip performance and power
efficiency--characteristics that are vital to success in the hot
5G-networking market that Qualcomm has made a priority.
The San Diego-based chip company is also bolstering its talent
pool with the planned acquisition, adding Nuvia's staff and three
founders, Gerard Williams III, Manu Gulati and John Bruno. Mr.
Williams was lead chip architect at Apple before decamping to start
Nuvia two years ago. Mr. Gulati and Mr. Bruno both worked at Apple
and Alphabet Inc.'s Google unit before Nuvia.
"The Nuvia team are proven innovators," said Cristiano Amon,
Qualcomm's president who this month was named to replace Steve
Mollenkopf as chief executive at midyear.
A wave of deal making across the U.S. semiconductor landscape is
transforming the industry amid strong demand for laptops,
videogames and data centers. That demand has sent shares in some
companies surging, helping companies gain financial muscle to do
Nvidia Corp., whose shares more than doubled last year, has
overtaken Intel Corp. as America's highest-valued chip company. The
graphics-chip maker agreed last year to pay $40 billion for Arm
Holdings, the British designer of mobile-phone chips backed by
SoftBank Group Corp., in what would be the industry's biggest deal
if it goes through.
Nuvia's CPUs--and Qualcomm's chips, which power hundreds of
millions of mobile phones--are based on Arm technology.
Advanced Micro Devices Inc. has said it plans to buy rival chip
maker Xilinx Inc. in an all-stock deal valued at $35 billion. Those
proposed tie-ups landed after Analog Devices Inc. in July agreed to
pay more than $20 billion for Maxim Integrated Products Inc.
Qualcomm's stock has risen about 70% over the past year, fueled
in part by growing demand for superfast 5G phones.
The deal, which requires federal regulatory approval in the
U.S., is a pivot for Nuvia, which began in 2019 as a stealth
startup working on CPUs for computer servers that it expected would
challenge market leaders Intel and Advanced Micro Devices. The
company raised $240 million--a large amount for a chip startup--in
its second funding round in September and was expecting to start
testing its first silicon chips this year.
Qualcomm gave up development of server CPUs more than two years
ago after failing to generate significant revenue from the
business. The company has given no indication of reversing that
The San Diego-based company is emerging from a tumultuous period
and moved to put behind it years of legal trouble that included a
long-running legal feud with Apple over Qualcomm's patent-licensing
practices, an antitrust case brought by the Federal Trade
Commission, repelling an activist investor, averting a hostile
takeover and having a $44 billion acquisition scrapped amid
U.S.-China political tensions.
Write to Asa Fitch at email@example.com
(END) Dow Jones Newswires
January 13, 2021 08:14 ET (13:14 GMT)
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