Is Amazon.com, Inc. (AMZN) Planning To Develop Its Own Chips?

0
Is Amazon.com, Inc. (AMZN) Planning To Develop Its Own Chips?
By Szk7788 (Own work) [CC BY-SA 3.0 or GFDL], via Wikimedia Commons

Amazon.com, Inc. (NASDAQ:AMZN) is working on plans to design its own server chips, as evidenced by several job listings and a series of LinkedIn updates. These developments seem to suggest that the company is determined to develop ARM architecture for those chips.

Play Quizzes 4

Amazon hired at least six chip engineers

Amazon.com, Inc. (NASDAQ:AMZN) has already employed several chip engineers, including the employees and CTO of Calxeda, the ARM-based server startup out of Austin, Texas, that was shuttered last year. The online retailer has also posted vacancies for its Silicon Optimization team based in Austin for microprocessor design expertise, including one for a “CPU Architect / Micro-Architect.”

Alight Capital Outperforms As Fund Positions For Uncertainty

Invest ESG Leon CoopermanAlight Capital Management declined 1.3% on a net basis for the first quarter of 2022, according to a copy of the firm's quarterly update, which ValueWalk has been able to review. Short positions offset most of the losses on the long side of the portfolio. The long/short equity fund exited the quarter with a net Read More

A report from GigaOM says that some of the sources have confirmed that Amazon.com, Inc. (NASDAQ:AMZN) is working on this plan, and suggesting the company has hired at least six former Calxeda employees with silicon design, fabric and board design experience.

As per the LinkedIn profiles, the employees Amazon.com, Inc. (NASDAQ:AMZN) hired in March, which include Principal Engineer, Silicon Optimization at Amazon Web Services; Hardware Development Engineer; Hardware Design Engineer; Director of Silicon Optimizations at Amazon Web Services and Manager of Hardware Engineering, Silicon Optimizations at Amazon Web Services.

A risky affair

The hiring of chip engineers by Amazon.com, Inc. (NASDAQ:AMZN) is making news all around as market watchers are curious to know more about the plan, especially with Google and Facebook Inc (NASDAQ:FB) already eying a similar endeavor.

According to Patrick Moorhead, president and principal analyst at Moor Insights and Strategy, Amazon is looking to build custom chips rather than working with existing chip suppliers.

“That listing looks like they are taking an ARM architecture license to roll their own core,” analyst said. “Why else would you need an architect?”

However, making chips involving silicon design is still challenging, even though it has become more practical as technology required for the process has been easily accessible. Moorhead said that it would take hundreds of millions of dollars to build an indigenous custom core, but if one can buy hardware like Amazon.com, Inc. (NASDAQ:AMZN) and can match the workloads to processors then it could be profitable. Moorhead, however, said that the venture is clearly risky.

There was no confirmation from Amazon.com, Inc. (NASDAQ:AMZN) over the reports and a spokeswoman from the company said, “We don’t comment on rumors or speculation.”

Updated on

Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com
Previous article Balyasny: HFT, Activists Partially To Blame For Tech Decline
Next article Microsoft IE Users In Australia, U.S., U.K. Advised To Stop Using It

No posts to display