Microsoft Corporation is working on an in-house processor design for use in server computers that run the company’s cloud services, adding an industry-wide effort to reduce reliance on Intel Corp.’s chip technology.
The world’s largest software maker is using According to people familiar with the plans, Arm Limited designs to produce a processor that will be used in its data centers. It is also exploring using another chip that will power some of its computer’s surface line. People asked not to discuss private initiatives. Intel’s stock closed 6.3% in New York at $ 47.46, a 21% decrease this year.
The move is a major commitment to supply Microsoft with the most important piece of hardware used. Cloud-computing rivals such as Amazon.com Inc. is already down the road with similar efforts. They have argued that their chips are better suited to some of their needs, mainly bringing more cost and performance benefits from Intel-off-the-shelf silicon.
Microsoft’s efforts are likely to result in more than one server chip for Surface devices, although the latter is possible, one of the people said. The company reports to Jason Xander, head of the Azure Cloud business, the company’s chip design unit, instead of Panos Pan, which oversees Surface products. Representatives from Microsoft and ARM declined to comment on whether Microsoft is working on the server and PC processor.
“Because silicon is a fundamental building block for technology, we are continuing to invest in our capabilities in areas such as design, manufacturing and equipment, while also promoting and strengthening partnerships with a wide range of chip providers.” Microsoft spokesman Frank Shaw said. .
Microsoft has stepped up In recent years hiring processor engineers, recruiting in the backyard of chipmakers like Intel, Advanced Micro Devices Inc., When between nvidia corp and those cuts Qualcomm Inc. gave up on its server chip efforts.
AMD is the second-largest manufacturer of chips that run PCs and is making a comeback to the server market after being largely shut down by Intel for the past decade. AMD stock lost 1% on Friday. Xilinx Inc., another chipmaker acquiring AMD, slipped 1.8%.
Intel’s Axion range server chips currently produce most of the machinery at the heart of the Internet and corporate networks, the company’s most profitable source of revenue. Despite the recent gains by AMD, this market still holds about 90% of it. Some Xeon models cost as much as a compact car.
Customers like Microsoft are moving towards alternative solutions to make sense of cloud computing and the mountain of data that smartphones produce. The adoption of artificial intelligence to automate that process has led to a flood of new chip designs. The biggest concern for owners of huge data centers behind services such as Office 365 has become the cost of providing power to their growing hardware footprint. Arm-based chips are often more energy efficient.
If Microsoft goes ahead with its own chip for PC then it will be the following Apple Inc., which is moving its entire Mac line away from Intel processors. Although neither Apple nor Microsoft devices have a large share of the PC market, their offerings are positioned as premium products with sleek designs and more advanced capabilities. When announcing its first new Mac based on the M1 chip, Apple gave a performance boost compared to standard PCs.
Microsoft currently uses arm-based chips from Qualcomm in some of its Surface PCs. It ports Windows to work on these types of chips, which are commonly used in smartphones. Apple also uses arm technology in its processors. Other surface models use Intel chips.
(Updated with Microsoft comment in fifth paragraph.)