Alibaba Group Holding Ltd, a Chinese digital behemoth, announced on Tuesday that it had built a chip that would be used to operate servers in its data centers.
This is the company’s newest venture into semiconductors. It follows in the footsteps of other international cloud computing firms while also aligning with the Chinese government’s ambitions to strengthen the country’s chip industry.
The Yitian 710 chip, created by Alibaba’s in-house semiconductors subsidiary T-Head, is built on Arm Ltd’s design and will not be offered for commercial usage outside of Alibaba. Alibaba is China’s and the world’s 3rd largest cloud computing supplier by customer base.
Its industry competitors have also launched server chips. The cloud computing infrastructures of Huawei Technologies Co Ltd and Amazon.com Inc (AMZN.O) are powered by their own Kunpeng and Graviton Chipsets.
Alibaba also revealed that it has a unique server line named Panjiu and that the source code for its Xuantie line of IP cores, which are built on the RISC-V open-source design, will be made public. Alibaba announced the Xuantie in 2019.
The Chinese government has consistently urged businesses to invest in the country’s semiconductor sector, which is still lagging behind its international competitors. Most of the country’s innovative chips are still produced by foreign businesses, a weakness exposed when U.S. sanctions on Huawei hampered the firm’s booming smartphone market.
Aside from Alibaba, Baidu Inc (9888.HK), Xiaomi Corp (1810.HK), and several Chinese automobile and appliance businesses have started investing in chips.
With such a big announcement coming from such a large and successful company like Alibaba, it is reasonable to assume that many businesses will now want to invest in the chips rather than relying on overseas competitors.