SHENZHEN/TAIPEI -- Huawei Technologies, the world’s biggest telecom equipment maker, launched a new core processor chipset on Monday for use in data center servers, a move to provide an alternative for the market to Intel's products.
The chipset dubbed Kunpeng 920, jointly developed with SoftBank-controlled U.K. chip designer Arm Holdings, delivers improved performance and reduces power consumption, Huawei said. Such advanced chips will be produced using 7-nanometer process technologies developed by Taiwan Semiconductor Manufacturing Co., the world’s biggest contract chipmaker.
Intel controls more than 96% of the global market share in making chips for servers and its X-86 architecture, which is also used by another smaller server processor maker Advanced Micro Devices, was viewed by the tech industry as the best foundation for server chips.
Intel, which has been struggling to transition into the age of mobile gadgets, has so far maintained a tight grip on the data center sector but is facing more competition. Huawei still needs to purchase chips from Intel and AMD to build its own data center server products.
"Huawei and Intel will continue our long-term strategic partnerships and continue to innovate together," said William Xu, Huawei board director and chief strategy marketing officer.
Arm Holdings whose technology can be found in more than 90% of mobile devices has long aimed to break Intel’s monopoly. The company, acquired by Softbank in 2016, has teamed up with many of its clients including Huawei’s chip arm HiSilicon Technologies, Marvell, Cavium and Qualcomm to roll out server chips with TSMC's manufacturing support. For now, Arm-based servers account for less than 1% of the market.
Huawei’s venture into data center server chips follows the recent arrest of Chief Financial Officer Meng Wanzhou in Canada on suspicion of violating U.S. sanctions against Iran. The world’s top telecom gear provider and No. 2 smartphone maker, meanwhile, found itself increasingly shut out of global 5G network projects amid security concerns about its close ties to Beijing.
The Chinese company based in Shenzhen has reason to team up with Arm Holdings as it’s eager to slash dependence on U.S. chip providers such as Intel, Nvidia, and Qualcomm on fears that its supplies of American technologies will be cut off, a fate that its smaller peer ZTE faced in April 2018.
The production of data center server chips is a high-value sector and an essential technology for the future. Artificial intelligence and autonomous driving both require powerful data centers to capture, process and analyze enormous amounts of information.
Huawei already has expertise developing high-end core processors for its smartphones and HiSilicon is the country’s top chip designer by revenue and technology. The company also unveiled a wide range of artificial intelligence accelerator chips for servers and cars to wearables in October.
HiSilicon often uses the industry’s most advanced and most costly chip production technology provided by TSMC that Apple also adopts for its iPhone core processors.
The new chip has "unique advantages in performance and power consumption," said Chief Marketing Officer William Xu during a news conference on Monday at company headquarters. Huawei aims to "drive the development of the ARM ecosystem," in order to respond to the expansion of cloud services and big data, he added.
Huawei's Kunpeng 920 central processing unit features 25% better computing performance than its peers and reduces power consumption by 30%. The company will use the new central processing units in its own servers dubbed TaiShan, and has no plans to sell the technology to others.
Huawei is also the world’s leading server builder trailing Dell, HP, Lenovo Group, and holds a similar market share like Cisco and Inspur Group, according to Gartner.
The Chinese tech powerhouse’s semiconductor ambition also underscores Beijing’s grand hope to build a competitive chip sector, a key battleground of the ongoing tech spat between the world’s top two economies, as soon as possible by pouring in funds from central and local governments.
The Chinese government aims to produce 70% of its own chips in the near future, up from the current 10% to 20%.