Microsoft Working On In-House Chip To Replace Intel Processors On Surface Laptops

Microsoft is working on in-house processor designs for use in server computers that run the company’s cloud services, adding to an industrywide effort to reduce reliance on Intel’s chip technology.

The world’s largest software maker is using Arm designs to produce a processor that will be used in its data centers, according to people familiar with the plans. It’s also exploring using another chip that would power some of its Surface line of personal computers. The people asked not to be identified discussing private initiatives. Intel’s stock dropped 6.3 percent to close at $47.46 (roughly Rs. 3,500) in New York, leaving it down 21 percent this year.

The move is a major commitment by Microsoftto supplying itself with the most important piece of the hardware it uses. Cloud-computing rivals such as Amazon are already well down the road with similar efforts. They’ve argued their chips are better suited to some of their needs, bringing cost and performance advantages over off-the-shelf silicon primarily provided by Intel.

Microsoft’s efforts are more likely to result in a server chip than one for its Surface devices, though the latter is possible, said one of the people. The company’s chip design unit reports to Jason Zander, head of the Azurecloud business, rather than Panos Panay, who oversees Surface products. Representatives of Microsoft and Arm declined to comment on whether Microsoft is working on server and PC processors.

“Because silicon is a foundational building block for technology, we’re continuing to invest in our own capabilities in areas like design, manufacturing and tools, while also fostering and strengthening partnerships with a wide range of chip providers,” Microsoft spokesman Frank Shaw said.

Microsoft currently uses Arm-based chips from Qualcomm in some of its Surface PCs. It ported Windows to work on these types of chips, which have typically been used in smartphones. Apple also uses Arm technology in its processors. Other Surface models use Intel chips.