Intel could be about to lose Google, one of its biggest customers

Larry PageGetty Images/Justin SullivanAlphabet CEO Larry Page.

Intel could be about to lose Google’s business as the company looks to endorse Qualcomm’s chips going forward, according to a report from Bloomberg.

Intel currently supplies around 99% of the total server market with computer chips, according to Bloomberg, but Google is expected to announce that it will choose Qualcomm’s chips at an investor event next week if the company can prove its chips work.

According to IDC data cited by Bloomberg, Google purchases around 300,000 computer chips per quarter from Intel, making it one of its biggest customers behind HP and Dell.

The loss of Google’s business would not topple Intel, but would be a blow for a company that is seeing its core businesses decline. The PC market, almost all of which is powered by Intel chips, is in decline, according to Gartner, and this is bad news for the chip maker.

According to Bloomberg, Intel makes around half of its operating income from its server business.

Qualcomm currently makes the chips used in most non-Apple smartphones, giving it an edge over Intel going forward as smartphone sales increase and PC sales decline. The smartphone market is expected to reach 1.8 billion unit sales in 2018.

Server chips are used to power big data centres which require the maximum amount of power for the smallest amount of electricity input. Google makes the software its servers use meaning that it could change from Intel to Qualcomm chips relatively easily, according to Bloomberg.

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