Amazon develops its own chips to reduce dependence on Broadcom
Amazon develops its own chip...
Subscribe to Newsletter

Amazon develops its own chips to reduce dependence on Broadcom

1 April 2021
3992
2 min.
9
Amazon develops its own chips to reduce dependence on Broadcom

Chip development

Amazon is making its cloud business increasingly autonomous, reducing risk and dependence on semiconductor manufacturers. After developing its own processor chips for data centres, Amazon has moved on to developing chips to power networks.

Cloud computing company Amazon (AMZN) Web Services is the world's largest provider of cloud computing services and aims not to depend on semiconductor manufacturers. The Information reported on Tuesday that a team from Annapurna Labs, acquired by Amazon in 2015, is working on chips to power networks that will help reduce AWS's reliance on Broadcom's (AVGO) supply. Broadcom has supplied Amazon with chips in bulk for years, which has been advantageous compared to buying more expensive networking chips from Cisco Systems (CSCO) and Juniper Networks (JNPR). However, according to media reports, the relationship between the companies' executives is strained and Amazon has long been considering alternative partners.

In 2019, to reduce its reliance on expensive Intel (INTC) chips for its data centres, AWS developed its own chip based on Arm Holdings' technology.

Broadcom shares were down 3.64 per cent at the close of trading on Tuesday, amid the news. Broadcom shares have gained almost 105% in the past 12 months.

Analysts view Broadcom's latest quarterly results positively and point to the chipmaker's advantageous position amid a global semiconductor shortage. Amazon shares are down 6.2% since the start of 2021 and closed with a small drop on Tuesday. While Amazon shares are still 55.6% higher than they were 12 months ago, they have been "trading in a corridor" for the past six months and some analysts say investors are no longer surprised by the company's rise amid the COVID-19 pandemic and need a meaningful new boost to the stock.

AWS' main competitor, Microsoft (MSFT), which also uses Intel chips for its data centres, is, according to media reports, replicating Amazon's experience and developing its own microprocessors for servers.

Companies9 in the news

Annapurna Labs
2 place
ARM
ARM
4 place
Broadcom
5 place
Cisco
6 place
Intel
7 place
Microsoft
8 place
Amazon
9 place
Section:
Rating companies
Instagram
17 Mention
Netflix
14 Mention
X (Twitter)
12 Mention
TikTok
8 Mention
Tesla
8 Mention
White House
7 Mention
JP Morgan Chase
7 Mention
Us Weekly
7 Mention

NEW YORK NEWS

News from GlobalNY.biz is the freshest and most relevant information about high-profile events in the region. The task of the resource's news feed is to convey to readers with maximum accuracy and objectivity information about important events in business, politics, economy, healthcare, culture and other spheres of life in New York.
GlobalNY.biz news is a coverage of economic processes taking place in New York, the latest news of public life, incidents and an overview of political events. New York news is information about the activities of small and medium-sized businesses, the work of housing and communal services and utilities, the implementation of significant projects.
The site's journalists describe not only the life of the region, but also talk about the current state of the US economy. Everything you need to know about innovations in the field of industry and agriculture, economy and power is collected in the "News" section at GlobalNY.biz.
New York news quickly informs the reader, shows the real picture and opens up hot topics. Communication with government structures and business enables us to provide our readers with reliable, information-rich material. The main page of the portal contains the key news of New York!
Alena Potapova

Development Director
Population
8173026313
Died this year
55613967
Born this year
136820202