Chip Processor War Moves to Servers Market

It's no secret that ARM Ltd. (Nasdaq: ARMHY; London: ARM) has been kicking Intel Corp. (Nasdaq: INTC)'s butt in smartphones. But ARM is now aiming higher, trying to hit the world's biggest semiconductor company by revenue squarely in the jaw in servers, where 95 percent of the machines are based on Intel microprocessors.

The low power consumption for which ARM processors are famous, and which made them the processor of choice for mobile devices, has become more attractive to server manufacturers as datacenters continue to struggle with the heat generated and the power consumed by traditional server hardware. The situation will only get worse as cloud computing and big-data applications create the need for bigger and bigger server farms.

A series of announcements at ARM's developers' conference in October showed just how serious ARM is about getting into the ring. First, it announced a new interconnect technology for multi-core servers that it claims can deliver up to one terabit of usable system bandwidth a second. Then it launched collaboration with Red Hat and Applied Micro Circuits to develop a 64-bit design platform that could "dramatically lower the total cost of ownership of cloud computing, data centers and enterprises."

As part of the announcement, Applied Micro described its Micro X-Gene "server on a chip," aimed at the big-data and cloud server market. And Red Hat pledged to build support within the Fedora community for ARM's 64-bit architecture. That was followed by the introduction of ARM's Cortex-A50 chip, a 64-bit processor aimed at networking, server, and high-performance computing.

There are enough chip and server companies promoting ARM-based processors for so-called microservers (basically server boxes that can hold more and more processors and yet keep energy consumption low) that the press is starting to talk about the datacenter as the next chip battleground. Semiconductor startup Calxeda, originally funded by ARM in 2008, has been promoting the idea ever since and introduced its first chip, the 32-bit EnergyCore SoC, in November 2011.

Marvell has also licensed ARM for a server chip, and in August said it has teamed with flash memory vendor SanDisk Corp. on a 32-bit server reference design incorporating SanDisk's flash-based solid-state-disk modules. Also in August, chip vendor Cavium got a license to ARM's 64-bit v8 server architecture. And in November, AMD said that it would begin shipping 64-bit Opteron server processors based on the ARM architecture in 2014.

System vendors, including Dell, Hewlett-Packard, Penguin Computing, and Boston Ltd., either have introduced ARM-based servers or are working on designs. Until October, most of the activity had been around ARM's 32-bit architecture, but 64-bit systems are what's really needed for the enterprise market. That's why ARM's announcements in October were particularly significant.

Meanwhile Linaro, a non-profit engineering organization that develops open-source software for the ARM architecture, says it's working with a group of companies to accelerate development of Linux for ARM servers. The group includes AMD, Applied Micro Circuits Corporation, Calxeda, Canonical, Cavium, Facebook, HP, Marvell, and Red Hat.

Intel is fighting back. In December it introduced its S1200 Atom processor, which it called the world's first low-power, 64-bit server-class SoC for microservers. "The data center continues to evolve into unique segments and Intel continues to be a leader in these transitions," said Diane Bryant, vice president and general manager of Intel's datacenter business. "We recognized several years ago the need for a new breed of high-density, energy-efficient servers and other datacenter equipment."

Apparently, this is not Intel's first foray into the microserver space. According to one news report, Bryant said Intel was responsible for "launching the [microserver] product category" in 2009. But interest in microservers seems to have taken the company by surprise. In a March 2011 fact sheet, Intel said it didn't expect microservers to make up more than 10 percent of the server market.

Judging from the number of chip and system vendors jumping into the microserver market, I bet it's going to be much bigger than that. With the PC market dying and the mobile phone market becoming saturated, it'll be interesting to watch these chip giants fight over it.