March 17, 2014, anysilicon
It’s no secret that Google, Amazon and Apple are heavily involved in the semiconductor industry. Apple itself is the biggest buyer of chips and estimated to buy 10% of chips sold worldwide. Google uses Intel’s CPUs in their server farms and represent alone 4% of Intel total sales.
Both Apple and Google have decided separately to establish in-house ASIC design and production activities by hiring ASIC development engineers as well as acquiring several fabless companies.
Can it be that we are on the verge of a new and exciting era, where the largest companies in the world have discovered that off-the-shelf ICs are not sufficient for a sustainable competitive advantage, and custom-made ASICs are required? The best known example, perhaps, is Apple’s A-series CPU which is the heart of every iPhone and iPad product.
But there is more to it. During the past 5 years, Apple has acquired several fabless companies such as Anobit, PrimeSense and Passif. And very recently EETIMES published this news about Google ramping up ASIC development groups to target the server market.
The path taken by Google and Apple is often followed by others, and there are quite good chances that Amazon will follow and design its custom chip for the Kindle. If Facebook introduces any hardware products going forwards, they will also need to come up with their custom-made ASIC to drive new and exciting features.
So if all this makes sense, we might see more Fabless and ASIC design companies involved in helping Apple, Google, Facebook and Amazon compete with each other.
Martin Varsavsky has talked about this topic at the TechCrunch event in 2013. His speech is not focused on the semiconductor industry per se’ but he believes that sooner or later any company will engage with AGAF companies (Amazon, Google, Apple and Facebook). His speech is very insightful and important, so you might want to take a look at it here.