Qualcomm To Snap Up Chip Startup Nuvia For $1.4B

Qualcomm has clinched a deal to buy chip startup Nuvia for about $1.4 billion, to help the supplier of mobile phone chips meet the demands of next-generation 5G computing.  With Read More... The post Qualcomm To Snap Up Chip Startup Nuvia For $1.4B appeared first on TipRanks Financial Blog.

Qualcomm To Snap Up Chip Startup Nuvia For $1.4B

Qualcomm has clinched a deal to buy chip startup Nuvia for about $1.4 billion, to help the supplier of mobile phone chips meet the demands of next-generation 5G computing. 

With this acquisition, Qualcomm (QCOM) will be able to put Nuvia’s processors into its portfolio of products, to power flagship smartphones, next-generation laptops, and digital cockpits, as well as advanced driver assistance systems.

Nuvia, which has developed a CPU (central processing unit) processor technology to be used in server chips, has expertise in Systems on a Chip (SoC) and power management for compute-intensive devices and applications.

“Creating high performance, low-power processors and highly integrated, complex SoCs are part of our DNA,” said Jim Thompson, Qualcomm’s Chief Technology Officer. “Adding Nuvia’s deep understanding of high-performance design and integrating Nuvia CPUs with Snapdragon - together with our industry-leading graphics and AI - will take computing performance to a new level and drive new capabilities for products that serve multiple industries.”  

The transaction is still subject to regulatory approvals and customary closing conditions.

The deal comes just shortly after Qualcomm this month announced the retirement of CEO Steve Mollenkopf, who will be succeeded by current President Cristiano Amon. Amon will take over the reins in June.

Meanwhile, Rosenblatt Securities analyst Kevin Cassidy reiterated a Buy rating on the stock with a $155 price target, and said that the move will help Qualcomm improve the performance of its Snapdragon SoC to differentiate its mobile apps processors from competitors.

"Overtime Nuvia architects may move Qualcomm's CPU performance up to be a serious competitor in personal computer and automotive applications," Cassidy wrote in a note to investors. "Our major concern is whether Qualcomm can retain the key Nuvia's CPU engineers through multiple product designs. (See QCOM stock analysis on TipRanks).

From the rest of the Street, the stock scores a cautiously optimistic Moderate Buy analyst consensus based on 17 Buys and 8 Holds. Meanwhile, the average price target stands at $165.59 and implies upside potential of about 6.2% to current levels.

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