Chinese tech giant Alibaba unveiled a new in-house designed server chip based on technology licensed from Arm, which will be manufactured with the advanced 5-nanometer process, the company said early Tuesday.
"Customizing our own server chips is consistent with our ongoing efforts toward boosting our computing capabilities with better performance and improved energy efficiency," Alibaba Cloud Intelligence President Jeff Zhang said. "We plan to use the chips to support current and future businesses across the Alibaba Group ecosystem."
Called the Yitian 710 , the chips will be used to power a forthcoming version of its servers that the company said it will use in its own data centers. Alibaba said it doesn't plan to sell the chips to other companies.
Alibaba's decision arrives amid other large cloud computing providers developing their own processors. Amazon.com has designed and installed custom chips in its data centers, as has Alphabet's Google. There are reports Microsoft is designing its own chips too.
Though custom chips can cost upwards of $500 million to design, big tech companies have the resources available to replace some of the chips in data centers made by Intel and its smaller rival Advanced Micro Devices.
The new Alibaba chip offers a 20% performance boost and 50% more energy efficiency, the company said. Processors made by Arm, which is owned by SoftBank Group, typically use less energy and generate less heat than those based on x86 designs.
Alibaba did not say how it would make the chips, but Taiwan Semiconductor Manufacturing and Samsung Electronics are the only two companies that can produce 5 nm chips at large scale.