Microsoft Working on In-House Chip to Replace Intel Processors

Microsoft Working on In-House Chip to Replace Intel Processors on Surface Laptops. The world's largest software maker is using Arm designs to produce a processor that will be used in its data centers, according to people familiar with the plans. It's also exploring using another chip that would power some of its Surface line of personal computers. The people asked not to be identified discussing private initiatives. Intel's stock dropped 6.3 percent to close at $47.46  in New York, leaving it down 21 percent this year

Microsoft's efforts are more likely to result in a server chip than one for its Surface devices, though the latter is possible, said one of the people. The company's chip design unit reports to Jason Zander, head of the Azure cloud business, rather than Panos Panay, who oversees Surface products. Representatives of Microsoft and Arm declined to comment on whether Microsoft is working on server and PC processors. Microsoft has stepped up hiring of processor engineers in recent years, recruiting in the backyard of chipmakers such as Intel, Advanced Micro Devices, Nvidia and among those cut adrift when Qualcomm abandoned its server chip efforts

The move is a major commitment by Microsoft to supplying itself with the most important piece of the hardware it uses. Cloud-computing rivals such as Amazon are already well down the road with similar efforts.