At its annual Cloud Summit, Chinese tech giant Alibaba Group Holding unveiled a new ultra-small, yet super-powerful chip.
The new silicon chip is based on a micro-architecture provided by ARM, an originally British chipmaker that came into the hands of SoftBank Group in 2016. The announcement immediately illustrates how China is moving towards complete self-sufficiency in semiconductors and no longer wants to be dependent on third-party chipmakers.
In this way, Alibaba, in particular, sidelines Intel and Advanced Micro Devices. Alibaba plans to deploy the new server chip “in the near future” in its own data centres. However, Alibaba says it currently has no commercial plans for the chip.
The server chip goes by the name Yitian 710 and is the third semiconductor to be introduced by the e-commerce giant in 2019. Alibaba’s Yitian 710 is one of the most advanced chips from a Chinese company to date. The announcement fits in with the broader global trend whereby American giants such as Amazon and Google are also gradually moving away from Intel and AMD silicon chips and instead focusing on their own ‘customization’.
This allows them to optimize their data centers and workloads better. That is also what Alibaba gives in the announcement as the main driver: more powerful and, simultaneously, more energy-efficient semiconductors help keep the explosively growing cloud services scalable and under control.
Alibaba is one of the first Chinese companies to heed Beijing’s call to invest in developing advanced technology and manufacturing capabilities. The Chinese government has made technological self-sufficiency a top national priority and has pledged billions in government funding for it. This should also help Chinese companies to compete against US sanctions in the sector.
What is not yet clear is who Alibaba will place the production with. Bloomberg sees too few domestic production opportunities for Alibaba and believes that only Taiwan Semiconductor Manufacturing and South Korean Samsung Electronics can mass-produce 5-nm chips.