Google could make its own ARM-based server processors

Companies like Google and Facebook can already get custom chips from Intel but Bloomberg reports that Google is looking into ARM and could cut loose  Intel. According to the report, Google is designing its own ARM-based chips to better manage the interactions between hardware and software and perhaps also to cut costs. Google is Intel's fifth largest customer, the search giant is estimated to spend roughly $500 million a year on Intel server CPUs.

By using its own designs, Google could better manage the interactions between hardware and software, said the person, who asked not to be identified because the matter is private. Google, among the largest buyers of server processors, has made no decision and plans could change, said the person. “We are actively engaged in designing the world’s best infrastructure,” said Liz Markman, a spokeswoman for Google. “This includes both hardware design (at all levels) and software design.” Markman declined to say whether the company may develop its own chips.

“We are actively engaged in designing the world’s best infrastructure,” said Liz Markman, a spokeswoman for Google. “This includes both hardware design (at all levels) and software design.” Markman declined to say whether the company may develop its own chips.

Google has been designing its own data centers around the world with servers to power search, video, online communications and other features. Moving into chip design could take away revenue from Intel, which has counted on Internet companies to help drive processor sales. Google is Intel’s fifth largest customer, accounting for about 4.3 percent of its revenue, according to Bloomberg supply chain analysis.

ARM-based chips dominate in mobile phones and tablets where companies such as Qualcomm Inc. (QCOM) and Samsung Electronics Co. (005930) have fended off Intel’s attempts to expand. Intel controls more than 95 percent of the market for chips for servers that use personal-computer processors, with Advanced Micro Devices Inc. making up the rest. AMD and other companies have announced plans to use ARM-based designs for the server-chip market.