Large cloud providers such as Amazon Web Services are increasingly developing their own chips. This means that they are even more dependent on less financially strong competitors.
(Photo: Reuters)
Developing chips is expensive and highly complex. Anyone who wants to get into the business at the moment not only has to be patient, but also at least 20 million euros, or even better, 30 million euros. That’s enough for just a prototype. A component that is ready for series production can easily devour a three-digit million amount. No wonder that most tech companies have not developed their own chips in the past few decades. Instead, the business was with large, highly specialized semiconductor manufacturers.
In the meantime, however, highly profitable tech companies such as Amazon Web Services, Facebook, Google and Microsoft can easily afford the complex development of components for chips. Therefore, they build up the necessary know-how in their own ranks and develop chips for various areas, especially for data centers. After all, the pioneer Apple has proven with its self-developed components for its smartphones and notebooks that such an investment pays off.
This is threatening for smaller, often regional, competitors. It is true that usable semiconductors can be designed increasingly cheaply thanks to highly automated software, and inexpensive production partners should also be easier to find in the next two or three years, as the contract manufacturers in the chip industry, the so-called foundries, are currently building new factories on a large scale in Asia and America .
But at the same time the demands on modern semiconductors are growing. Therefore, chip specialists are still needed, who are in demand around the world and are accordingly well paid. In addition, composite materials are increasingly replacing the previously predominant silicon, which in turn makes chip development and production more complicated.
Top jobs of the day
Find the best jobs now and
be notified by email.
Local data center providers or those only limited to Europe must therefore continue to use off-the-shelf chips such as those offered by AMD, Intel or Nvidia. That means: You can hardly set yourself apart from the competition and are dependent on the pace of innovation of your suppliers.
The US corporations, which are already bursting with strength, are becoming even more powerful with their own semiconductors. You can offer more performance with lower costs at the same time by installing chips with tailor-made software that are precisely tailored to your needs in your network computers, the so-called servers.
There is therefore a lot to suggest that the American tech giants will cement their already existing supremacy with their own chips. This may not bother customers at first, on the contrary: they may open up technological possibilities that they did not have before. And all of this at least for a certain period of time at attractive prices. In the long term, however, the buyers are likely to be asked to pay if certain offers are only available from US corporations.
More: 40 percent cheaper: Amazon is increasingly relying on its own chips