Interview with new CEO of Qualcomm: chip supply shortage keeps me up at night or until the end of the year

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New CEO of Qualcomm: Cristiano Amun
Tencent Technology News reported on March 6 that the most popular news in the automotive industry is not the new electric vehicles, nor the latest remarks of Elon Musk, Tesla’s chief executive, but the serious shortage of semiconductors. The problem has hit the world’s automakers hard because Ford, general motors, Toyota and others cannot get some of the electronic components they need and are forced to idle production lines and cut production.
However, the novel coronavirus pneumonia is not only affected by the shortage of chips, but also the chips of SONY Playstation 5 and Microsoft Xbox Series X game machines. People are buying large amounts of NVIDIA graphics processors during the new crown pneumonia epidemic. Even the world’s largest mobile chip manufacturer, Qualcomm, can’t get enough processors to meet the needs of mobile phone customers.
Cristiano Amon, the incoming chief executive of Qualcomm, is worried about this situation, not competition or consumers’ indifference to 5g. The 50 year old Brazilian has worked at Qualcomm since 1995 and became president in 2018. In June, he will succeed Steve Mollenkopf as the fourth chief executive in the 36 year old company’s history. This role is faced with great challenges, not only to maintain the leading position in the field of mobile chips, but also to expand the company to new markets through 5g connection.
Chip supply shortages affect all sectors
“If you ask me, ‘what keeps me up at night’,” Amun said in a recent interview This is the supply chain crisis we are facing in the semiconductor industry. ” Although this happened because of the high demand for technology products, “it created a lot of pressure because the supply chain was not ready to cope with this growth,” he said. Amun added that the supply shortage could continue until the end of 2021.
Last year, when the epidemic broke out, people began to stay at home and stop shopping; factories closed down and businesses cut orders. But then demand picked up faster than anyone expected, especially the devices that help people work at home and attend classes. Apple can’t meet its demand for iPhones, computers and webcams. Almost all of its stock is sold out, and schools can’t buy the equipment they need to teach at home.
Amun described this trend as a “V-shaped recovery”: first, the purchase volume dropped sharply, then the demand picked up rapidly. However, component manufacturers can’t keep up with the pace of this rapid change. Just in time manufacturing strategy, which has benefited automobile manufacturers for a long time, is now playing a counterproductive role. When the epidemic hit, they cancelled orders and found it difficult to quickly restore supply when demand recovered.
“Over the years, as more and more devices have been digitized, cars are the best example, and demand for semiconductors has grown to the point where people are competing for usable capacity,” said Bob O’Donnell, an analyst at technology research
At the same time, Huawei’s decline in the mobile phone market has also impacted the technology industry. Last summer, the company became the world’s largest handset maker, breaking Apple’s or Samsung’s monopoly on the title for nearly a decade. But U.S. sanctions against Huawei are undermining its ability to sell devices, providing other Android phone manufacturers with an opportunity to win customers. Amun said that created more demand for processors from companies such as Qualcomm, but the supply chain was not ready for that.
Amon added: “so when all of these factors add up, we have an incredible crisis in our supply chain. The shortage of chips affects almost all areas, including mobile phones. ”
Here are other points that Amun talked about in the interview:
On improving chip capacity
Since the supply shortage is so serious, why not build more factories to produce chips? US President Joe Biden said last week that he would review key supply chains, including semiconductors, in the next 100 days and allocate $37 billion to boost US chip manufacturing.
President Biden said last week: “recently, we’ve seen how a shortage of computer chips can delay car production and reduce the working hours of American workers. Chips are like horseshoes of the 21st century, and we need to ensure that these supply chains are safe and reliable.”
The problem is that building new Fabs takes billions of dollars, and they can’t be built overnight. Previously, most advanced processors were made outside the United States. Most chipmakers like Qualcomm don’t actually make their own semiconductors. They design processors and then hire companies like Samsung and TSMC to produce them.
Biden’s push to make chips in the United States has yet to work. Amun said it will take about 12 to 18 months to build a new semiconductor manufacturing plant, and it is the company’s capacity already in place that will end the supply shortage. “By the end of 2021, things will be better,” Amun said. But it needs to get people’s attention and make sure we have a strong supply chain and invest in a number of technologies. ”
Amun said that Qualcomm is one of them, it will not build a new fab to produce its own processors. The company operates its own RF component plant in Germany, but relies on Samsung and TSMC to produce snapdragon chipsets that power most of the world’s high-end Android phones. “We are very good at designing chips, and we are very good at using technology to achieve a very fast pace of innovation, and semiconductor manufacturing is a completely different kind of expertise,” Amun said
About coming to power
When Qualcomm announced on January 5 that Amun would become the company’s next chief executive, the timing surprised many technology experts. Molenkopf, who will be a strategic adviser for a long time, is only two years older than Amun. The company has settled licensing disputes with apple, antitrust investigations and Broadcom’s hostile takeover.

It turns out that this opportunity also surprised Amun. He learned about his promotion three days before the company announced it, the day before the board of directors unanimously approved his appointment. “The company had a succession plan before, and as president of the company, I was an internal candidate,” Amun said. But the final decision needs to be made by the board and molenkopf at the right time, so I don’t think it will happen in the short term. ” However, he believes that this kind of management restructuring is not abrupt, because Qualcomm “has always been in a stable position and is looking for what the company will do in the future.”.
When Amun takes over as CEO, he needs to focus on most of the work he has supervised, and 5g will continue to be the first, second and third priority. “5g is one of the biggest opportunities in the history of our company,” he said.
On the importance and independence of arm
Even before he officially took over as CEO, Amun had led Qualcomm to buy nuvia, a chip start-up founded by former Apple executives, for $1.4 billion. Qualcomm plans to use nuvia CPUs as the brain of devices in everything from smartphone chips to laptop processors and auto parts. That could mean stronger, more power-efficient Samsung Galaxy smartphones, Lenovo laptops and GM cars. Importantly, Qualcomm will rely on nuvia’s expertise to design new processor cores to meet future technology requirements.
Carolina milanesi, an analyst at creative strategy, said: “in the future, it’s not enough to have ready-made products. Having this kind of vertical integration will give them a better chance to stand out.”
Although both nuvia and Qualcomm use the technology of arm, a British chip design company, Qualcomm obtained a kernel license from the latter, and nuvia designed its own kernel. This allows nuvia to customize them better than Qualcomm, achieving higher performance and energy efficiency, while reducing its dependence on arm, which is being acquired by NVIDIA for $40 billion. With the expansion of mobile chips to more fields, the popularity of 5g, and the increasing demand of consumers and enterprises on the battery life of devices, this is very important. Apple has also designed its own arm based processor core, which enables it to launch the popular M1 Mac.
“I’m very confident now that the future of computing will be based on mobile chipsets, and we will integrate,” Amun said In order to cope with the future of using mobile processors in fields ranging from automobiles to robots, Qualcomm must be able to make its chips more powerful and adapt them to the functions that customers need. “The arm roadmap doesn’t allow us to lead the next generation of computing devices in terms of CPU performance, so we need to have our own roadmap to lead this transformation,” said Amun
At the time of the offer in January, nuvia had not yet put available CPUs into production. Amun declined to say when the first nuvia kernels would be available for Qualcomm products, but said “once we complete the acquisition, you will receive a message.”.
Oppose NVIDIA’s acquisition of arm
Although it aims to reduce its dependence on arm, it opposes NVIDIA’s offer to buy the UK chip design company. “The power of the arm roadmap lies in its independence. In fact, NVIDIA doesn’t need to buy arm to do what they say they want to do,” Amun said
When NVIDIA launched its bid for arm in September last year, it said it hopes to combine its AI capabilities with arm’s “huge ecosystem” to create the best technology for its customers. In response to Amun’s comments in a statement, the company said: “we want to be a catalyst for the growth of the entire arm ecosystem, but as a licensee, we can’t do that. Architecture licensees like Qualcomm will not share their technology with the entire arm ecosystem. It is designed for themselves. We will provide new technologies to all arm licensees faster than ever to help the entire arm ecosystem grow in the age of artificial intelligence. We will ensure that all arm licensees have access to world-class CPUs. ”
Amun refuted the claim that NVIDIA needed to acquire arm to help it compete with Intel and its x86 architecture. Benchmark tests of Apple’s arm based M1 MAC processor show that it outperforms Intel supported Mac Pro models. In response, amon said: “the reason why the arm ecosystem can flourish and create incredible competition on a global scale is precisely because it is independent.” (Tencent technology reviser / Jinlu)