The tech giants are rushing to invest in this sector. What happened?

Tech giants like Apple, Amazon, Tesla, Baidu, and Facebook are moving away from existing chip companies and trying to design their own semiconductor chips in-house.

“More and more these companies want chips tailored to meet the specific requirements of their applications rather than using the same generic chips as their competitors,” said Syed Alam, Accenture’s head of global semiconductors.

“This gives them more control over the integration of software and hardware, setting them apart from their competitors, ”Alam added.

And former non-executive director of Dialog Semiconductor in the UK, Ross Shaw, thinks the specially designed chips could work better and be cheaper.

“These chips can help reduce the power consumption of specific technology company’s devices and products, whether it’s smartphones or cloud computing services,” said Xu.

In turn, Glenn O’Donnell, director of research at analytics firm Forrester, justified the rush for global technology companies to make their own chips to the persistent shortage of global semiconductors.

Recently, not a month goes by without a tech giant announcing a plan to produce new chips.

Perhaps the most notable example came in November 2020, when Apple announced it was moving away from Intel’s x86 architecture to create its own M1 processor, which is now found in the new iMacs and iPads.

Recently, Tesla announced that it is building a “Dojo” chip to train artificial intelligence networks in data centers. In 2019, the automaker began producing cars with custom AI chips that help the software integrated to make decisions in response to what happens on the road.

Last month, Baidu also launched an artificial intelligence chip designed to help devices process huge amounts of data and increase computing power. Baidu said the “Kunlun 2” chip could be used in areas such as autonomous driving and that has entered mass production.

Some tech giants have chosen to keep some semiconductor projects under wraps. Google is rumored to be close to launching its own CPUs for i laptop Chromebooks by 2023, according to a Nikkei Asia report.

Amazon, which operates the world’s largest cloud computing service, is also developing its own network chip to power it switch for devices that transmit data across networks.

Design, not production

At this point, none of the tech giants are trying to do all of the chip development on their own.

“It’s about the design and the performance of the chip, “said Shaw.” At this point, it’s not about manufacturing and foundry operations, which are very expensive. “

Setting up an advanced chip factory, or foundry, like TSMC in Taiwan, costs about $ 10 billion and takes several years.

“Google and Apple are also conservative in building these foundries,” O’Donnell said. “And they’ll go to TSMC or even Intel to build their chips.”

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