Qualcom, the largest maker of mobile-phone chips, will accelerate the introduction of faster semiconductors to put more pressure on Intel Corp. (INTC) and Nvidia Corp. (NVDA), which are targeting the wireless market.
Chief Executive Officer Paul Jacobs showed off the new Snapdragon 800 and 600 processors yesterday in a keynote speech opening the International Consumer Electronics Show in Las Vegas. The chips, which will make their way into phones and tablets by the middle of this year, perform 75 percent faster, according to Chief Operating Officer Steve Mollenkopf.
San Diego-based Qualcomm climbed IHS iSuppli’s rankings of the largest chipmakers in 2012, jumping three places to trail only Intel and Samsung Electronics Co. (005930) by revenue. Benefiting from surging demand for mobile phones, Qualcomm has amassed a 42 percent slice of the mobile-application processor market, according to market researcher Strategy Analytics.
“The pace of mobile is really accelerating and we think we’re driving it,” Mollenkopf said in an interview yesterday. “The game is getting more challenging, and the benefit to the consumer is that you’re going to see much more exciting devices in the market.”
Mollenkopf said that Qualcomm, which licenses ARM Holdings Plc (ARM) technology and designs its own processors, is able to beat its competitors on efficiency, delivering the same performance with half the power in a phone or tablet. The new chips are already in 50 different handsets and mobile computers, he said.
The new 800-series chip has four processors, each capable of running as fast as 2.3 gigahertz, the company said. It also offers the ability to integrate the latest cellular modem standard, called long term evolution, or LTE, something that no other manufacturer can do, according to Mollenkopf.
Suwon, South Korea-based Samsung is the second-largest maker of applications processors, since it supplies Apple Inc. (AAPL) and manufactures the Exynos chip for its own handsets. It’s also one of Qualcomm’s largest customers.
Intel, the largest maker of processors for computers, got its start in phone processors last year, featured in smartphones from Google Inc. (GOOG)’s Motorola Mobility Holdings and Lenovo Group Ltd. (992) The company has yet to grab more than one percent of the mobile processor market.
Executives from Intel yesterday outlined plans to introduce new lower-power computer and tablet chips, as it targets the shift to smartphones and tablets. Intel is stepping up efforts to compete in the mobile market as investors bet that Qualcomm is better placed to capture growth. Qualcomm last year surpassed Santa Clara, California-based Intel for the first time to become the largest chipmaker by market value.
Qualcomm, whose shares rose 13 percent last year, is trading at a 18 percent premium to the S&P Information Technology Sector Index on a price-to-earnings basis. Intel, which declined 15 percent in 2012, trades at a 40 percent discount on the same basis.
Intel also plans to offer a quad-core version of its tablet chip lineup, code-named Bay Trail, for devices to be sold during the end-of-year holiday shopping season.
Nvidia Corp., whose Tegra components power phones and Microsoft Corp. (MSFT)’s Surface tablet, also announced plans to upgrade that product at the show.