DITCHING CHIPS
Semiconductor industry feeling effect as titans move away from silicon suppliers
Apple, Amazon’s move could signal shift in computing.
SAN FRANCISCO —For close to a decade, supporters of the chip technology that powers mobile phones vowed to shake up the market for computers. For the most part, they made little headway.
Now that finally seems to be changing, in a potential power shift over the direction of the computer industry.
The change is being driven by Apple and Amazon, two tech behemoths that are cutting their dependence on the Intel chip technology that has long controlled most personal computers and larger server systems. Instead, the companies are increasingly leaning on homegrown chips that were designed using technology that Arm, a British company, licenses for smartphones and other consumer products.
Apple fired a salvo last month when it introduced Mac computers that for the first time used its own Armbased chips. In June, Amazon’s cloud computing business started marketing a new computing service based on its own Arm-based chips, telling customers that the service was both faster and cheaper by one-fifth than its Intel-based offerings.
Last week, Amazon unveiled another computing service for businesses based on those same chips. It also discussed gains made by users of the service that was introduced in June, such as Snap, maker of the Snapchat messaging app. Amazon added that Twitter planned to begin using the technology as part of a broadened relationship between the companies.
“The larger the customer, the more excited they are,” said Peter DeSantis, who oversees computing infrastructure for Amazon Web Services.
The actions by Apple and Amazon are causing ripple effects across the $400 billion semiconductor industry.
Their moves suggest that key decisions in chips may increasingly shift from silicon suppliers, where the power had long resided, to chip users with the resources to make their own components. For computer users, the moves may result in more technology choices, snappier computing speeds and lower costs.
“Everyone’s like, wow, Apple’s totally in; Amazon and others are in,” said Keith Kressin, a senior vice president at Qualcomm, a large supplier of Arm-based chips. “This is going to happen for real.”
Intel became a dominant force in computing in the 1990s, emerging as the biggest supplier of processors for PCs and later exploiting its highvolume manufacturing to make lower-priced chips for servers. But the company did not make chips for smartphones, which became hugely popular starting in 2007.
Enter Arm. The 30-yearold company, which Nvidia recently agreed to buy from SoftBank for $40 billion, delivered chips that used less power than Intel processors. That difference — which meant that mobile phones might run all day on a battery charge, rather than just a few hours — attracted makers of chips for mobile phones, such as Qualcomm.
In the last decade, some backers of Arm technology also began saying such chips could be used beyond mobile phones. Companies such as Broadcom and Qualcomm started designing Arm-based chips for data centers to cut down on rising power bills for Intel processors. They later gave up the costly efforts, partly because customers demanded greater computing speed.
In PCs, Microsoft has also talked up Arm, with little success. While the software giant has worked with Qualcomm to market an Armbased version of Windows and laptops that use the operating system, sales have been minimal, largely because of a lack of programs created for the laptops, market researchers said.
Then came Apple’s move. The company, which had previously designed Armbased chips for phones and tablets, said in June that it would gradually shift from the Intel processors it has used in its Mac computers since 2005. Apple said its first chip designed for the Mac, the M1, delivered twice the performance of a comparable Intel chip while using a quarter of the power.
“Every Mac with M1 will be transformed into a completely different class of product,” Johny Srouji, Apple’s senior vice president of hardware technologies, said at last month’s online event to introduce the new Macs.
Intel said it should not be counted out. It continues producing faster versions of its x86 chips, and many customers don’t want to rewrite software that runs on them.
But Arm is increasingly competitive in computing, said Rene Haas, president of Arm’s main products group. He said Arm had made key changes to improve the computing performance of each processor core, or the individual calculating engines laid out on each piece of silicon.
Cloud-style computing chores also can better exploit lots of relatively simple cores and special-purpose circuitry, said Amazon’s DeSantis. Its Arm-based chip, the Graviton2, has 64 such cores compared with up to 24 more powerful cores on Intel server chips, he said. That helps it perform computing tasks that are done simultaneously, like serving up web pages to different people.
Ampere, a chip startup in Santa Clara, Calif., has developed an 80-core Arm server chip and expects to release a 128-core version next year. Renée James, Ampere’s chief executive, said its customers and investors included software giant Oracle, which plans to offer a cloud computing service based on Ampere’s chips.
Arm “is real with Amazon,” James said. “Their competitors will follow suit.”