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Exclusive: Amazon’s cloud unit, will prepare a more powerful data center to a chip resources

(Ap) – Amazon.com Inc. ‘ s (AMZN.D) cloud computing unit, which is designed by a first, a second, more powerful generation of data center processor chips, two of the sources familiar with the matter told Reuters, the latest sign that the company is pouring money into the custom silicon for the world’s fastest-growing business.

FILE PHOTO: The logo of the Amazon Web Services (AWS) can be seen at the start of the 4th annual of America, Digital Latin American Congress of Business and Technology in Santiago, Chile, on September 5, 2018. REUTERS/Ivan Alvarado

The new Amazon Web Services-a-chip using the technology of the Softbank Group, Corp-owned (9984.(T) – Arm Holdings, the sources said. One of the sources familiar with the matter said that it is likely to be at least 20% faster than Amazon ” s first Arm-based chip, called the Graviton, which was introduced last year as a low-cost option for more convenient computing.

As an Amazon Web Services (chip’s efforts are to be successful, it can reduce the dependence on Intel Corp. (a). (INTC.(O) and Advanced Micro Devices Inc. (AMD.(O) for the server chips, and so on.

An Amazon spokesman declined to comment on future products or services. Arm declined to comment.

In cloud computing, companies rent the servers from Amazon instead of running their own data centers. Analysts expect that Amazon’s enterprise cloud computing unit, generating $34.9 billion in sales by 2019, according to IBES data, Refinitiv.

Cloud computing has become big business for the data center to the chip makers. Intel controls more than 90% of the server processor market, with AMD make the most of the rest of us. Intel’s data center group generated almost half of the company’s overall operating profit last year.

And most of the server chips are going to go to the cloud. By 2018, 65% of Intel’s data center chip sales, cloud and communications service providers, and their respective directors, officers said.

TOTAL COST OF OWNERSHIP

Chip designers using Arm technology and want to challenge Intel’s dominance. Arm chips to power mobile phones, and today was the day. However, several companies are striving to make them suitable for data centers, including start-ups run by former executives of Intel and Apple Inc’s (AAPL.D).

Amazon’s first Arm chip and does not affect Intel’s data center business, which will continue to grow over the past few years, said an analyst from Bernstein Stacy Rasgon. However, he said the big technology companies are spending billions of euros each year, with Intel and AMD, with some of the alternatives, we have the resources to make a more powerful Arm chips, and so on.

Arm by yourself, I’m not that worried about it, but the Poor in the hands of an Amazon, or Google, would be able to invest in it, and that it might be more problematic” (for Intel / amd, Rasgon said.

Amazon’s Poor effort, it seems to be for development, one of the sources said. The new one is on the rate of gain will send a message to the market that Amazon is investing seriously in the Arm-based chips, the person said.

Two sources familiar with the matter, said that the new chip is not expected to be as powerful as Intel’s “Cascade Lake” and AMD’s “Rome” in the chips.

While the less powerful Arm chips are cheaper and use less electricity than Intel’s top end chips. Intel’s most powerful chips will cost a few thousand dollars, while a barebones Arm-based server chips will cost less than $1,000.

In a data center, which houses tens of thousands of servers, the chip buyers will often focus on a range of factors including: the speed, the size of the chip, the power consumption and cooling costs, which is called the “total cost of ownership.” This is where the Arm is based on the offer, hoping to one day compete with Intel.

WITH NEW ARM TECHNOLOGY

Amazon’s first-Graviton-chip using Arm’s older Cortex-A72 and technology. The next Amazon, the chip is expected that you are using the newer Arm technology, most likely on an Arm’s Neoverse # 1 in technology and one of the sources familiar with the matter told Reuters. Another source familiar with the matter said the chip is expected to have at least 32 cores, compared to the Graviton is set to 16.

The new chip will make use of a technology called “fabric” that will allow it to connect to other chips and to speed up tasks such as image recognition, one of the people familiar with the matter said.

In order to take advantage of the new hardware, cloud customers are likely to need to make use of the software is written for Arm-based chips, which is less than the software for the Intel and AMD chips.

“The hardware is only part of the equation”, and the second, a source familiar with the matter told Reuters.

Report by Stephen Nellis in San Francisco; Additional reporting by Jeffrey Dastin in San Francisco; Editing by John Mitchell and Lisa Shumaker

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