Xilinx, a maker of programmable chips for data centres, has won orders from Microsoft’s Azure cloud unit, replacing chips made by Intel, Bloomberg reports.
Microsoft’s cloud business Azure will use Xilinx chips as co-processors in more than half of its servers, winning business that has been an exclusive for Intel’s Altera unit. Co-processors are chips that accelerate some functions to relieve the main processor in a server.
Microsoft said it will continue its relationship with Intel in its current offerings. “There has been no change of sourcing for existing infrastructure and offerings,” Microsoft spokesperson said.
Xilinx chips will have to achieve performance goals to determine how widely they’re deployed.
Intel acquired Altera in 2015 for $16.7 billion to gain that capability and give its main Xeon server processors more flexibility.
Xilinx, under chief executive officer Victor Peng, is trying carve out a niche in the growing market for data center components. Companies such as Microsoft, Alphabet’s Google and Amazon.com have become purchasers of server chips. They’re looking for alternatives to standard processors to increase the efficiency of their data centers.
Intel’s programmable chip business had $496 million of sales in the third quarter of 2018, a gain of 6 percent. Xilinx, which only makes this type of chip, reported a jump in revenue of 19 percent in its latest quarter.
Xilinx posted 19 percent increase in revenue to $746 million in the second quarter of fiscal year 2019.
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