Alibaba’s Answer to the Challenge – A New Server Chip

Alibaba, the Chinese e-commerce giant, released a new server chip on Tuesday. As it is known, the company intends to grow its cloud computing business and compete with a solid American competitor such as Amazon. A processor called Yitian 710 will be introduced in new servers as Panjiu.

Servers and chips will not be sold straight to consumers. Instead, Alibaba’s cloud computing customers will provide acquisition services. Servers are for AI applications.

Alibaba has not mentioned when the latest chip and services will be available to clients. Alibaba does not assemble semiconductors; It constructs them.

Huawei has developed its smartphone chips. Baidu raised money this year to produce semiconductors independently. So did U.S. cloud computing competitors, including Amazon and Google.

Alibaba considers the opportunity as an exciting part of its l gain. It currently accounts for 8% of its revenue. The e-commerce giant’s cloud computing business saw slow growth in the June quarter. The company lost a significant customer using cloud services overseas.

According to market analyst firm Canalys, Alibaba is China’s most significant player in cloud computing. However, at the same time, the company’s competitors should make substantial investments.

As U.S. sanctions tighten the business of Huawei smartphones, the company is simultaneously trying to increase revenue from the cloud.

Alibaba is trying its best to expand its cloud business internationally. However, in terms of global market share, it still lags behind Amazon and Microsoft. Companies are investing in their chips to have a personalized silicone that can enhance specific applications.

According to Jeff Zhang, president of Alibaba Cloud Intelligence, adjusting the server chips is in line with ongoing efforts to improve capabilities and energy efficiency.

Conclusion

Alibaba’s Yitian 710 chip is based on the architecture of the British semiconductor firm Arm. It also uses the latest production processes. The company does not disclose which firm will manufacture the chips. The Yitian 710 is not Alibaba’s first attack on custom-designed semiconductors. In 2019, Alibaba released its first AI chip, called the Hanguang 800.

The new server chip comes out just when the Chinese internet giants face strict internal regulators’ strict control. Regulators are trying to tighten the rules from antitrust to data collection. In April, Alibaba received a fine of $2.8 billion due to an antitrust inquiry into the company.

Despite everything, China hopes to boost its domestic capabilities through semiconductors, as its industry still relies heavily on foreign technology at this stage.