Report: Google Considering Computer Chip Design

Google may work with ARM to design chips for its hardware.

A visitor passes the Google logo on Sept. 26, 2012, at the official opening party of the Google offices in Berlin, Germany.

Google may step into the hardware market as it considers designing its own server processors using technology from chip manufacturer ARM Holdings.

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Google is expanding its cloud servers to meet high demand for its search engine and other products, so could the next step for the tech powerhouse be to manufacture its own computer chips?

Google is considering designing its own server processors using technology from chip manufacturer ARM Holdings, Bloomberg reported on Friday, citing "a person with knowledge of the matter."

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This could be a challenge to Intel Corp., as Google is the company's fifth-largest customer for chips. But the proposal also could be an effort to pressure Intel, the world's largest chip manufacturer, into lower prices, Bloomberg reported.

Liz Markman, spokeswoman for Google, said in a statement that the company "is actively engaged in designing the world's best infrastructure."

"This includes both hardware design at all levels and software design," Markman said.

ARM declined to comment for this article.

Google primarily designs ads but also spends its wealth designing smartphones, offering fiberwire broadband service, building laptops and even innovating self-driving cars. That push to innovate means it would not be too surprising for Google to decide to design its own computer chips, but the company likely would make them for use in its own servers and products rather than sell the processors to other companies, says Scott Strawn, who analyzes Google for International Data Corporation, a market research firm.

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Google already manufactures hardware, including its Chromecast product, which broadcasts online music and video onto televisions. It also owns Motorola Mobility, which produces Android mobile devices.

"They treat the hardware they develop as intellectual property for themselves," Strawn says. "They don't have a lot of incentive to package it and make it available to other companies."

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