Planned Microsoft CPUs up the ante for custom silicon
Intel’s plan to grow by mopping-up excess demand for chips appears to be working. The company, which has been lagging competitors in both the chip design stakes and in share price performance, now says it expects to overtake Taiwan Semiconductor Manufacturing Company (TSMC) as the world’s largest chip manufacturer by 2025.
Indeed, the company is now in the process of creating an entirely separate subsidiary just to manufacture other people’s designs, cementing the plan announced in 2021 by Intel chief executive Pat Gelsinger (pictured) to open its foundries to competitors in the chip design space.
More broadly, the chip business as a whole is booming. After a lacklustre initial public offering (IPO), Arm Holdings, which designs the cores used in mobile phones and Apple computers, has seen its share price grow by more than 100%. Nvidia shares, too, have rocketed, growing over 60% in under two months off the back of quadrupled revenue. In fact, its recent earnings report sent not only its own share price up, but also that of its competitor AMD.
The reason for the price boost, of course, is artificial intelligence (AI), which, despite recent gaffes such as ChatGPT spouting gibberish and Google Gemini creating images of ethnically diverse Nazis, is driving enormous growth in the data centre business. In other words: servers.
However, for my money, the most interesting recent development is that Microsoft has etched into silicon a deal that will see Intel manufacture chips for it. According to Bloomberg News, Microsoft will design, yes, chips for AI acceleration but, more interestingly, also new CPUs.
Like Apple, which designs its own chips based on Arm-designed cores, Microsoft designing its own specialist silicon is a significant move, something Microsoft chief executive Satya Nadella laid out in a press release issued by Intel.
“We are in the midst of a very exciting platform shift that will fundamentally transform productivity for every individual organisation and the entire industry,” he said.
Just what Redmond plans to shove its shiny new CPUs into is, as yet, unclear. Given Microsoft has transformed itself into a cloud company the appearance of its new CPUs in servers is probably a safe bet – after all, Amazon is banging out its own CPUs for use by Amazon Web Services – but there could also be developments closer to the end user.
Apple has enjoyed a tremendous boost by designing CPUs specifically suited to common tasks performed on Macs, iPads and iPhones, with the end result that its chips appear to be much faster than they are.
This will not have gone unnoticed by Microsoft, and while the company does have to walk a tightrope to ensure its hardware doesn’t alienate third party manufacturers in PC land such as Dell, Lenovo and HP, it would not be surprising if we started to see custom CPUs in Surface devices or Xbox games consoles. 2025 will certainly be interesting.
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