Chinese Internet giant Alibaba is reportedly close to expanding into semiconductors and may introduce its first server chips as early as this week.
The Chinese financial news outlook Caixin reported that the NYSE listed company has been developing server chips based on technology from British semiconductor company Arm Holdings (ARMHF), which is currently in the process of being acquired by Nvidia for $54 billion. Alibaba founded its own chip-making subsidiary in 2018, and is said to have been working on its own chips since 2019, according to reports.
Alibaba will reportedly debut the server chips at a company conference this week. Like many other Chinese companies, Alibaba has been investing in semiconductor design as a means of reducing expenses in chip manufacturing.
Arm is known for licensing its technology to numerous tech companies such as Apple and Qualcomm. Nvidia has recently offered more concessions to European Union regulators in an effort to alleviate EU antitrust concerns about the proposed deal.
For Alibaba, this will also give a significant impetus to its Cloud computing business, which is foraying into Southeast Asia and Middle East regions. Alibaba Cloud is the digital technology and intelligence backbone of Alibaba Group, which, recently was appointed as a cloud service provider (CSP) for the Malaysian government. Similarly, it has also announced that it plans to build its first data centre in the Philippines.
Global Semicon shortage
This development also needs to be seen in the wake of a global shortage in semiconductor chips, which can be partly attributed to the US-China trade war. More Chinese companies from different sectors are speeding up efforts to enter the semiconductors sector.
Companies from sectors such as automobiles, smartphone manufacturers and home appliance producers are getting into semiconductors.
