Qualcomm has spent over two decades being synonymous with smartphone chips. Now, the company is making its boldest move yet to change that — and the numbers it just laid out are eye-catching.

The Big Numbers from Investor Day

According to Reuters, Qualcomm said it expects to generate $15 billion in sales from its data center business by 2029, sending shares more than 12% higher in after-hours trading. CFO Akash Palkhiwala told investors the company will be “truly diversified” going forward.

Metric	Previous Estimate	New Target (by 2029)
Non-handset chip revenue	$22 billion	$40 billion
Data center business revenue	—	$15 billion
Data center revenue (FY2027)	—	$5 billion
Smartphone share of chip revenue	Majority	~1/3

The shift means handsets — Qualcomm’s traditional bread and butter — will make up only about a third of its total chip revenue by the end of the decade, a dramatic rebalancing for a company long defined by Snapdragon smartphone silicon.

Why Qualcomm Is Moving Now

The push comes as the smartphone chip market faces real pressure. A memory chip shortage driven by surging AI infrastructure demand has squeezed margins across the industry — something we’ve tracked closely in our coverage of the realme P4 series price hike. On top of that, major customers like Apple and Samsung are increasingly designing their own chips in-house, shrinking Qualcomm’s addressable market over time.

Qualcomm’s New AI Chip Lineup

Qualcomm is entering the data center race with a distinct strategy — leaning on cheaper, smartphone-style memory rather than the pricier high-bandwidth memory used by Nvidia and SRAM-based chips from Cerebras.

Product	Purpose
High Bandwidth Compute (HBC) chips	Cost-efficient AI inference using mobile-grade memory
Dragonfly C1000	New CPU designed specifically for AI data centers
Custom ASICs	Built for two unnamed “hyperscaler” customers

Qualcomm’s data-center chief Tony Pialis called this a “tremendous value” proposition on performance-per-cost — directly targeting customers who don’t need Nvidia-grade horsepower for every workload.

Big-Name Customers Already On Board

Microsoft and Meta have both been confirmed as early adopters. Meta will use Qualcomm’s Dragonfly C1000 CPU for its AI infrastructure, while Microsoft is adopting the new HBC chip category. Qualcomm also claims to have secured two additional hyperscaler customers for custom chips, with revenue expected before the end of this calendar year — though those customers haven’t been named yet.

The Modular Acquisition

Alongside the investor day reveal, Qualcomm announced a roughly $4 billion all-stock deal to acquire AI software startup Modular. The move gives Qualcomm a software platform that can compete with Nvidia’s CUDA — the proprietary ecosystem that has locked in millions of AI developers and remains one of Nvidia’s biggest competitive moats.

For more chip industry coverage, check out our smartphones and semiconductors section on TechnoSports.

The Bottom Line

Qualcomm is making one of its most serious attempts yet to break free of smartphone dependency, backed by real customer wins in Microsoft and Meta and an aggressive $40 billion non-handset revenue target. The AI data center race remains brutally competitive, but Qualcomm’s cost-efficiency pitch and the Modular acquisition suggest it’s playing the long game rather than chasing a quick win.