Qualcomm designing China-specific data center chip to navigate US export controls; adapting architecture to comply with foreign access restrictions.

Qualcomm is building data center chips specifically for China, a move designed to stay within US government export restrictions while protecting a market worth nearly half its annual revenue.

The company unveiled its Dragonfly platform during an investor day in New York on June 24, with CEO Cristiano Amon positioning the initiative as both regulatory compliance and aggressive market expansion. The platform will include AI accelerators, data center CPUs, custom silicon, and connectivity products, all engineered to stay beneath the performance thresholds set by US export rules.

In 2025, 46% of Qualcomm's revenue came from Chinese customers, mostly through smartphone chip sales. The company forecasts $300 million in data center revenue for the current fiscal year, scaling to $5 billion by fiscal 2027. Qualcomm estimates the broader data center market will surpass $1 trillion by 2029.

The technical pitch centers on bandwidth efficiency. Qualcomm claims the Dragonfly platform delivers 6x bandwidth per watt compared to traditional memory solutions, using what the company calls a high-bandwidth compute architecture.

Manufacturing will rely on TSMC. Qualcomm also recently acquired Modular Inc. in a deal valued at nearly $4 billion, a move that bolsters its software stack for AI workloads.

Meta has adopted the Dragonfly C1000 CPU, giving Qualcomm a marquee customer in the Western data center market alongside its China-focused strategy. The company also revealed ongoing work with ByteDance on custom AI chips that comply with US regulations.

The US has imposed export controls on advanced semiconductors bound for China since October 2022, with successive rounds tightening the restrictions. The rules essentially cap how much compute power can be shipped to Chinese customers.

Nvidia has already designed downgraded versions of its GPUs specifically for China. Qualcomm's approach with Dragonfly appears to bake regulatory constraints into the architecture from the ground up rather than retrofitting existing designs.