Alibaba and Tencent unveil high-powered, self-designed enterprise chips

Alibaba Group Holdings Ltd. and Tencent Holdings Ltd. recently unveiled new self-designed microchips.

The two Chinese technology giants crafted high-performance electronic components to optimize their digital backend operations. The firm’s silicon development also aids Beijing’s push to achieve domestic semiconductor independence.

The East Asian conglomerates’ move into the microelectronics sector follows similar actions by Amazon and Google. The American corporations created chips with greater power utilization and performance characteristics than off-the-shelf hardware. By following their footsteps, the Chinese organizations might achieve similar results.

Alibaba’s First Self-Designed Server Chip

Alibaba’s newly unveiled Yitian 710 server chip represents the latest evolution of its three-year-old development initiative. The component features Arm architecture, 128 cores, 8DDR5 channels, a 2.2 GHz clock speed, and 96-lane PCIe 5.0. The CPU possesses remarkable performance characteristics in part because it was made with an unnamed foundry’s 5nm node.

Because of his technical specifications, the data center processor is the most advanced microelectronics product launched by the corporation.

Alibaba is currently best known as one of the world’s largest e-commerce companies, generating $71.99 billion in revenue last year. In recent years, the conglomerate has funneled its massive income into establishing a presence in the nascent cloud computing sector. Its efforts saw it become a market-leading web service provider, behind only Amazon, Google, and Microsoft. In 2018, the firm launched its own component design unit, T-Head, to optimize its cloud offerings and maximize revenue.

Seeking Alpha noted the Yitian 710 could help Alibaba significantly improve its position in the $17.2 billion Chinese cloud computing market.

The conglomerate will not sell the server CPU, but it will soon integrate it into its web services infrastructure. Its new hardware could give it an advantage over its rivals and help it rake in tens of millions of dollars in additional data center revenue every quarter.

Alibaba’s microelectronics breakthrough could also bolster its status with Beijing. Recently, the corporation has dealt with a massive fine and ministerial scrutiny as part of a larger government regulatory crackdown. But its contributions to China’s semiconductor industry, which lacks cutting-edge chip design and manufacturing capability, can help the region establish its digital sovereignty.

Tencent’s First Microchips Debut

Tencent, the world’s biggest video game company, made a play to establish itself in the electronic component sector by debuting its first three self-designed chips at its 2021 Digital Ecology Conference.

The Zixiao AI reasoning CPU brings together video, audio, and natural language processing capability with computer vision acceleration functionality. It features embedded HBM2e memory and an AI core to expedite resource-intensive computational work. The company stated the AI inference component is 100 percent more efficient than other enterprise options.

The Canghai video processor offers low latency, high throughput real-time video encoding at 1080P/60Hz. The corporation claims its compression rate is 30 percent better than competing products.

Finally, the Xuanling smart networking card enables robust CPU server offloading for virtualization and storage input/output tasks. Upon its unveiling, the firm noted the NIC provides four times the performance of existing hardware.

Tencent’s inaugural chip catalog aligns with its diverse business portfolio.

Its inference component can optimize the functionality of WeChat, its flagship social media and mobile payments app. As the platform is over a billion users, Zixiao can help it operate more seamlessly. Canghai can support the service’s short video feature to gain more traction among its user base. It could also make Tencent Video, the corporation’s Netflix-style streaming site be more efficient. And Xuanling could reinforce its cloud computing infrastructure.

Dowson Tong, a Tencent SVP, revealed the conglomerate will continue investing in semiconductor solutions to support the “industrial internet.” Tong also said the company would cultivate an ecosystem of domestic and overseas companies to further the initiative. In 2020, it launched a new unit called Penglai Lab to design and test microchips. It has also invested heavily in Enflame Technology, a Chinese startup that has developed impressive AI hardware.

With over $1 trillion in market capitalization, Tencent has the resources to advance its home country’s component resources. Plus, since China’s Ministry of Industry and Information Technology pledged to “vigorously support” its local semiconductor sector, it could receive major government support in pursuing that objective.

In addition, like Alibaba, Tencent has also been the subject of Beijing’s regulatory crackdown on its tech titans. Therefore, the two corporate giants’ efforts to further China’s microelectronics ambitions should pay meaningful, long-term dividends.