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A Brief History of Qualcomm

A Brief History of Qualcomm
by Paul McLellan on 01-29-2014 at 12:48 pm

 Qualcomm is the largest fabless semiconductor company in the world. If you have a smarphone there is a good chance you have a Qualcomm chip in your pocket. It is headquartered in San Diego with offices pretty much everywhere.

Qualcomm’s roots are in Linkabit, which was founded by Irwin Jacobs and Andrew Viterbi. They, along with other Linkabit alumni founded Qualcomm in 1985. The story I heard is that one of the motivations was that Viterbi, who invented the Viterbi decoder in the 1960s, and which is widely used in cell-phones and disk drives, felt that they didn’t really make money from licensing the decoder given how widespread it was and wanted to create a company that could license technology much more profitably. Whether that story is true or not, it is certainly one aspect of how the story played out.

Qualcomm started with a radio system for truckers called OmniTracs. It remained part of Qualcomm until late last year. This was a CDMA-based satellite system. In that era you might remember that they also were the company that supplied the Eudora email system, that was part of OmniTracs but also available separately.

A couple of years later they developed all the technology for CDMA cell-phones and entered both the base-station business and (in a joint venture with Sony) the cell-phone business. They also sold CDMA chips to other manufacturers and licensed CDMA technology to other chip makers. They were pretty much a one-stop shop for CDMA. In 1993 the US Telecommunications Industry Association adopted Qualcomm’s CDMA as an industry standard. Initially Sprint and Verizon were both using CDMA while most other operators were using GSM.

 Qualcomm is today around a $25B company. Today the company is split into two main parts, a technology licensing division called Qualcomm Technology Licensing Division, and Qualcomm Technologies Inc which runs engineering and, in particular, their fabless semiconductor business.

I negotiated a technology licensing deal with Qualcomm in around 1997 when I was at VLSI Technology. Just to show you how fast the company has grown, given that it is $25B today, here is the story, We had been unable to get what we considered reasonable terms and had walked. Qualcomm wanted a royalty from us, which was reasonable. But they also wanted a royalty from anyone we sold chips to for use of the same patents that we had already licensed. We felt that put us at to severe a disadvantage competing against Qualcomm’s own chipsets. At the end of Q2 Qualcomm needed $2M to make their quarter. They significantly lowered the royalties and caved on some other conditions provided we could pay them $2M in non-refundable pre-paid royalties (so they could recognized them that day—this really was the end of the quarter). VLSI Technology was in the CDMA business as well as GSM where we already had a strong presence. My guess is that license was inherited first by NXP and then by the now defunct ST-Ericsson. Anyway, the point is that back then $2M was make or break for their quarter, now that is about what they make in an hour.

In the late 1990s, Qualcomm got out of the both the base station and handset businesses and focused completely on technology licensing and fabless SoC development.

3G and 4G wireless air interface standards all depend on various aspects of CDMA and so require patent licenses from Qualcomm, who have continued to innovate and develop more advanced CDMA technologies out ahead of the competition. I believe it is not possible to build a cellphone SoC without a patent license (well, unless you are in China when you can claim the patents are not violated). Just this week Qualcomm acquired a further portfolio of patents from HP including that Palm patents and others.

 Since 2007, the current line of SoCs is sold under the name Snapdragon. Qualcomm have an ARM architectural license and design their own CPUs using the ARM instruction set. Krait is the name of the latest incarnation. They also design their own graphics processor (GPU) called Adreno and digital signal processor (DSP) called Hexagon. They recently purchased Arteris’s technology and engineering group, whose network on chip (NoC) technology they used.

Snapdragon chips are integrated Application Processor (AP) and modem, unlike many of their competitors who use two separate chips. More recent Snapdragon chips also have on-chip WiFi and Bluetooth. They are used in a huge variety of cell-phones including Samsung Galaxy, Xiaomi and other market leaders. Although Apple builds its own Ax application processors, they use Qualcomm modems.

Almost all their chips are build in the TSMC 28nm LP process although they are sampling chips in TSMC 20nm too and will presumably ramp those to volume during 2014.

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