Amazon is reportedly gearing up to produce its own networking chips in face of the global shortage, The Information has learned.
The in-house chips would be used for Amazon’s internal IT infrastructure and AWS, speeding up the cloud division’s data centre servers as well as enhancing its artificial intelligence (AI) services, according to the information obtained by the publication.
The move would diminish the need for the company to outsource production, which has proven increasingly unreliable in the past year. Although Amazon already manufactures its semiconductor switches in-house, their production is reliant on silicon supplied by San Jose, California-based company Broadcom.
In April 2020, the chip manufacturer warned customers that they would be required to place their orders at least six months in advance, instead of the normal two to three months. Broadcom’s VP of sales Nilesh Mistry said that this was due to “unreliable” transport options caused by the COVID-19 pandemic.
It isn’t clear whether Amazon’s reported decision to develop custom silicon chips for its hardware network switches was influenced by this issue, but the move will likely make it easier for the tech giant to avoid supply chain disruptions and have more control over its own infrastructure.
Amazon’s in-house chip development will be made possible thanks to its 2015 acquisition of Israeli chip manufacturer Annapurna Labs, which the tech giant purchased for $350 million (£254 million).
Israel is also set to be the base of Google Cloud’s new server chip design division. Last week, the tech giant announced that it had hired Intel’s engineering veteran Uri Frank to lead its increasing investments in custom silicon.
Google Cloud’s VP of Systems Infrastructure Amin Vahdat said that the company is “thrilled to welcome Uri Frank as our VP of Engineering for server chip design”, adding that the tech giant had “long looked to Israel for novel technologies including Waze, Call Screen, flood forecasting, high-impact features in Search, and Velostrata’s cloud migration tools”.
“We look forward to growing our presence in this global innovation hub,” he added.
Apple has also recently started equipping its MacBooks with its own custom ARM-based processors in order to lessen its reliance on Intel.