Qualcomm Moves Away from Phones Toward Data Center Chips
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Exercise 1
Vocabulary
Repeat each word, its meaning and the example sentence out loud.
bottom line
noun/ˈbɑːtəm ˌlaɪn/the final profit or loss of a company
The new data center business will help improve the company's bottom line next year.
forecast
verb/ˈfɔːrkæst/to say what you think will happen in the future, usually based on information
Our team forecast that sales will increase by 15 percent in the next quarter.
revenue
noun/ˈrevənuː/money that a company makes from selling products or services
The software division generated the most revenue for our company this year.
eventually
adverb/ɪˈventʃuəli/at some point in the future; finally
We started small, but eventually our startup became one of the biggest in our industry.
ambitious
adjective/æmˈbɪʃəs/wanting to do something big or difficult that requires great effort
Their target to double revenue in one year was ambitious but they achieved it.
Exercise 2
Article
Read the article aloud on your own, or listen to it first.
Qualcomm Moves Away from Phones Toward Data Center Chips
Qualcomm is changing its business strategy because smartphone sales are falling sharply.
Smartphone sales at Qualcomm dropped by about 20 percent in 2026 compared to 2025. This is a big problem for a company that built its business on smartphone chips.
The company is now looking to data centers to replace this lost business. Data centers are large buildings full of computers that companies like Amazon and Meta use to run their artificial intelligence systems.
During its earnings announcement for the final quarter of 2026, Qualcomm explained its new plan. The company will work with Amazon and Meta to supply chips for their data centers.
Qualcomm expects this data center business to grow very fast. In the first quarter of 2027, the company forecasts data center revenue of about $650 million.
By the end of 2027, it expects this to reach $5 billion.
The growth continues even further. By 2029, Qualcomm expects data center revenue of $15 billion.
This is important because Qualcomm's total revenue for all of 2026 was only $10.4 billion. The data center business will become a huge part of the company.
Qualcomm stated that data centers will eventually make up about 30 percent of its total business. This is an ambitious plan, but not as ambitious as competitor AMD, which expects data centers to be 80 percent of its business.
The shift shows there is strong demand for data center chips from companies building artificial intelligence systems.
Exercise 3
Discussion
Have a discussion based on the following questions.
- 1.Does your company depend on one product or market like Qualcomm did with smartphones, or do you have a more balanced business?
- 2.How important do you think data centers and artificial intelligence will be for technology companies in your industry?
- 3.Have you seen other companies in your field change their strategy because of market changes?
- 4.If your company needed to move into a completely new business area, what would be the biggest challenges?
- 5.Do you think Qualcomm's goal of 30 percent data center revenue by 2029 is realistic?
Exercise 4
Further discussion
Have a discussion based on the following questions.
- 1.Why do you think smartphone sales are falling compared to previous years?
- 2.What risks might Qualcomm face when competing with AMD and other companies in the data center chip market?
- 3.How does the rise of artificial intelligence change what technology companies need to invest in?
- 4.What could happen to Qualcomm if data centers do not grow as fast as the company forecasts?
- 5.Which other technology companies might need to change their strategy like Qualcomm is doing?
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This lesson is our own retelling, for English learners, of a story from The Verge.
