Qualcomm acquires Wilocity to meet huge mobile data traffic needs

Qualcomm (QCOM) recently acquired Wilocity to boost its portfolio of mobile chipsets. Wilocity operates high-speed wireless technology WiGig, which works at a higher frequency and promises faster data speeds than traditional wi-fi technology. With Wilocity, Qualcomm is bracing itself for the manifold increase in mobile data traffic to come.

Qualcomm calls this increase the 1,000x data challenge, indicating that it’s preparing itself for the 1,000-fold mobile data increase. Qualcomm will also integrate WiGig technology with its Snapdragon 810 processor to make it a powerful integrated mobile chipset.

With WiGig technology, Qualcomm is looking to make its portfolio of products even more attractive. In addition to Snapdragon, Qualcomm already sells a number of other chipsets—such as wireless modem, radio frequency, and power management. The ability to integrate these chipsets helps Qualcomm gain an edge over its competition, which is why it’s the dominant player in the cellular baseband market.

But Qualcomm has even larger an ambition, which is to become the leader in the overall semiconductor market. According to a report from Gartner and as the chart above shows, currently, Intel (INTC) leads this market with a 15% share simply because it has a near-monopoly in the PC chipset market, with AMD (AMD) a minuscule player and a distant second in this market.

Samsung (SSNLF) is the second-ranked player in this market. But its struggle in the smartphone market will be a loss for its own semiconductor business as well. This is because it uses its own Samsung Exynos processor for some of its smartphones. Qualcomm is third in this list, with a share of 5.5%. It’s then followed by SK Hynix and Micron (MU).

Qualcomm should be able to increase its market share at the expense of Intel in the future simply because the mobile market is growing at a much faster pace than the PC market.