Microsoft working on in-house chips for its servers, PCs

By Stephen Nellis

(Reuters) -Microsoft Corp is working on in-house processors for the servers running its cloud-computing services and Surface line of personal computers, potentially cutting its reliance on Intel Corp , a person familiar with the matter told Reuters.

The chips would use technology from Arm Ltd, the person said, which is in the midst of being acquired by Nvidia Corp for $40 billion.

Bloomberg previously reported Microsoft's move.

Microsoft relies heavily on Intel and Advanced Micro Devices Inc to supply the chips for its Azure cloud computing services as well as its Surface PCs.

But the company had already been working with Ampere Computing and Marvell Technology Group Ltd on Arm-based server chips, and with Qualcomm Inc for an Arm-based processor in its Surface Pro X device.

Now Microsoft has joined firms like Apple Inc in designing its own custom Arm-based chip. Apple last month released Mac computers based on its house-designed M1 chip.

The person familiar with the matter said Microsoft is working with computing cores licensed from Arm, rather that designing its own custom cores as Apple does.

Arm declined to comment.

Microsoft spokesman Frank Shaw said the Redmond, Washington-based tech giant views semiconductors as a key focus area.

"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," he said in a statement.

(Reporting by Eva Mathews in Bengaluru and Stephen Nellis in San Francisco; Editing by Devika Syamnath and Tom Brown)

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