Big tech’s developing their chips in a few years to tackle chip shortage on their own

Tech giants are not new to adapt to new challenges. Due to the current shortage of chips, productivity decreases as software and hardware components go together as part of the whole package. Big names in tech are planning to get their chips by being their own manufactures to tackle the challenge. Recently Apple released their new product series with M1 chips, and following that, Google, Facebook, Tesla and Amazon are all eager to develop their chips. In-house chip development announcements are helping companies striking new deals, examining the old ones, and thus opening opportunities.

Setting up a manufacturing plant for chips is costly and takes time to perfect the craft. A lot goes behind the development process as technology updates frequently, and challenging them is not that easy. Due to the excessive demand for chips and shortage of materials, the market is troublesome. A single factory that develops chips may take up to $10 billion and multiple years to build.

Amazon is building a foundation to develop its chip, which may scale massively later down the road. If the plan goes accordingly, they may threaten silicon valley giant Intel. Amazon is the largest global retailer also has a vast market around cloud computing. Their new push towards the chip market for their own data centres. Companies as enormous as Amazon has one of the most considerable servers and cloud computing systems. If they can produce enough qualified chips, chances are the company will start manufacturing for other parties interested in the product. As they are not going to fall short of budget anytime soon, chances are they will succeed faster than expected. “Graviton” is the chosen name for their upcoming ARM-based CPUs.

Global semiconductor lead at Accenture Syed Alam said, “these companies want custom-made chips fitting their applications.” Former non-executive director at UK Russ Shaw said, “These specifically designed chips can help to reduce energy consumption for devices and products from the specific tech company, whether it relates to smartphones or cloud service.”

As the global powerhouses need continuous chip supply, and a shortage is going on for a while, the moves are much needed.

China’s Baidu is launching a second-generation “Kunlun” chip to implement AI and cope with the current shortage. Tesla is working on “Dojo” for their future products depended on computing power, which is supposed to have a much fluent relation with artificial intelligence (AI) and machine learning (ML). Alphabet Inc, the parent of Google, is rolling Tensor Processing Units (TPUs) that can perform interface for AI models, relying on popular machine learning framework TensorFlow. Microsoft is developing a HoloLens 2 headset requiring a Holographic Processing Unit (HPU) for core functionality.

Companies like Facebook, Google, Amazon, Tesla, and Apple are global innovation leaders. Several facts remain that they try to compete in almost every sector like cloud platforms, customer services, and organisational matters. And as the CPU shortage seem to last for a while, it is not going to be any different. Taiwan Semiconductor Manufacturing Co. (TSM) recently announced they would charge more for new chips within a few years as manufacturing costs rise. The move would’ve dampened if there was any guarantee of the shortage expiration. The consumer market would benefit heavily due to the competition, and further push towards innovation will have more fluid opportunities. Even if they don’t start manufacturing chips directly on the first go, the companies will stick with the design elements.

We may overcome the shortage in a few years with alternative options which may still be in development.