The cloud is the fiercest front in the chip wars

IT IS easy to think of the computing cloud as the placeless whereabouts of the latest Netflix series, your Spotify playlists, millions of wanton selfies and your digital assistant. It is even easier to ignore it altogether, at least until Alexa alerts you that your storage space is filling up and helpfully offers to rent you extra room, of which there always appears to be more available. Necessary, disembodied and, for US$9.99 a month, to all intents and purposes limitless: It is the ether of the digital age.

This ether, though, has a very unethereal side – the vast data centres where all this information is physically stored and, increasingly, processed by powerful computers known as servers. The semiconductor hardware that makes the servers powerful is fast becoming the hardest-fought front in the battle over the US$600 billion global market for computer chips.

Rooms of servers began to replace computer mainframes in the 1990s. Back then, they were owned by companies and installed on their premises. They mostly ran on chips made by IBM and HP, the Big Tech of the day. These were supplanted by processors from Intel, which by the mid-2000s translated its dominance of PC semiconductors into a near monopoly of the server market. Things started to change once again around a decade ago, when Amazon began selling some of its spare server capacity. Microsoft and Google followed suit and the cloud computing industry took shape. As the cloud has billowed, so has Intel’s competition.