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Intel threatened as Google mulls creating own server chips

  • Google (GOOG) is reportedly thinking about designing its own server processors using technology from ARM Holdings (ARMH).
  • The idea is that with its own chips, Google could better better manage the interaction between hardware and software.
  • The move could hurt Intel (INTC), which earns over 4% of its revenue from the search giant, and which has a 95% share of the market for server chips that use PC processors. The company has been hoping that rising demand for the components will offset the slump in the PC market.
Comments (21)
  • Arthur Fisher
    , contributor
    Comments (239) | Send Message
     
    No quick trick. Years to make consequential. Fab them where? At Intel?
    13 Dec 2013, 05:27 AM Reply Like
  • Badonkadonk
    , contributor
    Comments (242) | Send Message
     
    They could get a leg up by buying someone already in this space, like Caldexa. But I agree that getting fab capacity for something compelling won't come cheap. Possibly cheaper than OTS Xeons, but you shift so much cost from Capex to OPEX you have to wonder if there are really significant savings.

     

    Plus you need to close some key technology gaps around HW Virtualization and DRAM ECC. Not to mention lack of multithreading on your cores. All the reasons that traditional x86 was considered too power hungry for mobile are the reasons ARM is not fit for high end servers. Things like consumer NAS or micro servers, no problem, but those don't have the same demands as the type of farms used by GOOG and FB.
    13 Dec 2013, 07:12 AM Reply Like
  • mr wonder
    , contributor
    Comments (546) | Send Message
     
    Rumor = invented by Bloomberg
    http://bit.ly/1guFUIa
    13 Dec 2013, 05:56 AM Reply Like
  • PendragonY
    , contributor
    Comments (6506) | Send Message
     
    Yeah, it makes a lot of sense for Google to make its own chips for servers. Yes, its entirely reasonable to increase labor in its server farms by having multiple types of servers. And yes, it makes so much sense for Google to switch from a proven technology to an unproven and mostly not yet shipping technology.

     

    Or maybe not.
    13 Dec 2013, 06:41 AM Reply Like
  • Michael Blair
    , contributor
    Comments (4691) | Send Message
     
    Intel has about 1.3 million servers each with a cost of about $1,000. If they changed them out every two or three years and grew at 25% they would buy less than $600 million worth of servers annually. Processors in those servers might cost $200 to $300 million. I don't know where the 4% of Intel revenue comes from but it seems wrong. And, if they could cut the processor cost by half by having their own the savings would be a rounding error. There is no possibility they can match Intel's performance curve regardless of the software integration which they could just as readily obtain through cooperation with Intel. I think this is an unlikely event.
    13 Dec 2013, 06:42 AM Reply Like
  • lewhite
    , contributor
    Comments (166) | Send Message
     
    Michael
    You're right on this one!!
    13 Dec 2013, 07:06 AM Reply Like
  • 392334
    , contributor
    Comments (92) | Send Message
     
    "There is no possibility they can match Intel's performance curve regardless of the software integration which they could just as readily obtain through cooperation with Intel"

     

    Really?
    1. A smaller die size may help on the performance curve, but things like HSA can outperform that when the software could use it.

     

    2. Has Intel REALLY been working with Google to customize chips? Intel may have helped in some niche cases, but they are coming around to semi-custom chips because a competitor (AMD) landed some very large contracts that will be announced in 2014.

     

    I disagree, and think you are flat out WRONG. Intel is late once again, just like they were with the cell phone chips.. and now they are playing catch up
    13 Dec 2013, 11:28 AM Reply Like
  • thesahibzada
    , contributor
    Comments (448) | Send Message
     
    total nonsense and should be removed from SA...
    13 Dec 2013, 07:25 AM Reply Like
  • Axien86
    , contributor
    Comments (49) | Send Message
     
    Google and other big data companies are realizing they are essentially subsidizing Intel's multi billion contra revenue tablet gambit, which appears as a last ditch effort at relevance in the mobile market.

     

    Google will influence many other companies to follow this strategy of moving to ARM based servers just like Apple will move to ARM based Macbooks, which may trigger a permanent downward spiral for Intel.
    13 Dec 2013, 07:38 AM Reply Like
  • DoowopDave
    , contributor
    Comments (218) | Send Message
     
    Google has the resources, but why use them to make chips that are changing faster than once a year? I think it's a bluff to push Intel to lower their prices.
    13 Dec 2013, 07:40 AM Reply Like
  • me4tux
    , contributor
    Comments (2) | Send Message
     
    Motorola/Google can certainly do it. Not in the traditional sense of building a cpu but rather a system. Motorola has proven know-how that they can easily build an commodity ARM server system for specific workloads... http://bit.ly/1crGOy5
    13 Dec 2013, 08:11 AM Reply Like
  • blade3colorado
    , contributor
    Comments (95) | Send Message
     
    Bloomberg is totally irresponsible publishing this ridiculous article. I'm pissed that INTC has gone down in AH trading.
    13 Dec 2013, 08:28 AM Reply Like
  • sid gold
    , contributor
    Comments (192) | Send Message
     
    Do NOT be pissed this is another buying opportunity
    13 Dec 2013, 08:33 AM Reply Like
  • MCJohnson
    , contributor
    Comments (12) | Send Message
     
    Another contributor addressed this already.
    http://seekingalpha.co...
    13 Dec 2013, 09:06 AM Reply Like
  • jhawkinstx
    , contributor
    Comments (73) | Send Message
     
    Bloomberg mentions a google posting for a digital design engineer as basis for its story....a quck search of google jobs postings on "processor" came back with two jobs....one unrelated....the other, a upper level job listed as Semiconductor group commodity manager......this poor guy is being hired to optimize google server hardware with off the shelf industry components.......seems like a lousy job since Bloomberg says they will be moving to their own designs..........my point being to raise awareness of how ludicrous it is for Bloomberg to include a single job posting as support for a rumor from an unnamed source......the day after intel entrees it's quiet period before earnings.
    13 Dec 2013, 09:58 AM Reply Like
  • JC_B
    , contributor
    Comments (40) | Send Message
     
    I think the appropriate response from Intel and AMD to reports that Google will make its own server chips is this
    Ha ha ha ha ha ha ha ha ha.......................
    IF Google invests billions in this effort annually, even AMD wouldn't start to worry until about 10 years down the road.
    13 Dec 2013, 10:39 AM Reply Like
  • investingInvestor
    , contributor
    Comments (1462) | Send Message
     
    The real question is whether Google is also too late to the DIY party. Intel and Microsoft were, but Microsoft is busy righting their ship.

     

    Amazing to see how afraid Intel long investors really are. I guess it is a natural reaction to a visceral threat.
    13 Dec 2013, 11:27 AM Reply Like
  • JC_B
    , contributor
    Comments (40) | Send Message
     
    InvestingInvestor, what chip(chips) is is MS manufacturing? As far I can tell, none.
    Creating CPU's is a non-trivial exercise. Creating server CPU's to compete with what is currently available? By a company that is not currently "familiar with the art"?
    AMD is familiar with the art. They are also seriously talented. They are also a definitive second best (despite the fact that I like them and almost invariably use their CPU's for performance/price reasons).
    14 Dec 2013, 12:34 PM Reply Like
  • investingInvestor
    , contributor
    Comments (1462) | Send Message
     
    JC_B, you know the answer. You also know that Microsoft announced a new business model and new CEO search in 2013. Microsoft is trying to right their ship in light of what customers and competitors are showing them.

     

    With two generations of Surfaces under their belt, Microsoft is looking at x86 versus ARM. Perhaps, Microsoft will become a DIY ARM chip IP company in the future.

     

    What you do not know is that it has less to do with the CPU than ever before. In the past, IBM, HP, Dell, Qualcomm, and others have designed and built their custom support chips. Now, they put these into the SoC.
    17 Dec 2013, 12:18 PM Reply Like
  • Cincinnatus
    , contributor
    Comments (3565) | Send Message
     
    investing,
    This is right up there with your Haswell was in development for two years claim.

     

    Firstly, Qualcomm doesn't belong on that list. Secondly, the others are system integrators and rarely design and build there own chips. They buy a cpu and chipset from someone like Intel and build a platform using those components. Of your list, only IBM has any vertical integration, and that's only in certain product lines.

     

    There's no way MSFT is considering developing their own server processors, chipsets, and platforms. It would be a decade before they'd have even the remotest chance at being competitive, and by that time with no guarantee of success they'd have a tremendous sunk cost.
    18 Dec 2013, 11:19 AM Reply Like
  • JC_B
    , contributor
    Comments (40) | Send Message
     
    Actually I'd say that I don't know. Building IC's is very different from building high performance CPU's for servers. I'm not in that business, but I respect that what they do is very difficult, which is why so many players have dropped out.
    A lot of players can build a CPU.
    Fewer can build CPU's with performance/power characteristics sufficient for intelligent devices such as tablets and phones.
    Fewer still can build CPU's with the performance/power characteristics for PC's (and I mean for jobs that require PC power, not surf the net and play flash games)
    Modern server CPU's? You have 2 players with a clear #1. Maybe someday ARM will be able to make a run at the last 2 categories. But that day has not yet come.
    18 Dec 2013, 11:02 AM Reply Like
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