- Amazon.com (AMZN -1%) is developing a chip to power the hardware switches used in networking, The Information reports - a move that could reduce its reliance on Broadcom (AVGO -2.9%), with which it has a cool relationship. For years Amazon has designed its own semiconductors to speed performance in its Amazon Web Services/AI operations. Now, tapping its Annapurna Labs unit, Amazon is making a bigger step toward taking control over a key part of its technologies. A hardware switch chip would be part of a broader effort to make the performance of its cloud servers indistinguishable from those in private data centers.
- AWS also plans to design an array of networking hardware components and software to cut latency and move data quickly, according to the report. The company is initially expected to use switches powered by its chip to run the internal network, though it might not be surprising if services based off the switches were offered to AWS customers. For years Amazon has bought Broadcom chips in bulk, helping it reduce its reliance on more expensive networking silicon from the likes of Cisco Systems (CSCO -2%) and Juniper Networks (JNPR -1.8%).
- But that relationship is frosty, according to the report, in part because Broadcom CEO Hock Tan is known for hardball negotiation tactics (including surprise price hikes, pressing for exclusivity deals and dramatically extending lead times if customers push back). And while Amazon will move away from using Broadcom, it may still buy chips from other networking players like Marvell (MRVL -0.5%) and Intel (INTC -1.3%), the report says.
Amazon Steps Up Silicon Ambitions With New Networking Chip
Over the past several years, Amazon has designed its own silicon chips to speed up the performance of servers in its cloud data centers and the artificial intelligence services it sells to customers. Now, in a big step toward seizing control over a key component in its technologies, Amazon is ...
www.theinformation.com