Whether Amazon’s Graviton2 will be the game changer for the CPU market remains to be seen, Intel has to be sensitive to the emerging trend of customers’ designing proprietary chips.
Intel’s large cloud customer Amazon’s Graviton2 stands to take away $120 million immediate revenue from Intel. Google’s TPUs may take $650 million, and Microsoft’s FPGAs may take $700 million.
The wide uses of custom chips are restricted by their customized nature. Intel has about 2% revenue exposure on the custom chips from the 3 cloud providers.
Merchants developing their own proprietary silicon, i.e., Apple, should be a more alarming trend. Currently, Intel has about 4%, or $2.5 billion annual revenue exposure potentially to Apple’s SoC/SiP chips.