Google wants to make its own server chips, taking big biz from Intel

Google is a software company. Google is a services company. But it’s not really a hardware company — at least not yet.

In an effort to better integrate its hardware and software, Google is considering bringing its chip design in-house, a source tells Bloomberg. The move would let Google create more power-efficient chips that are better designed for what the company actually wants to do with them.

While the move wouldn’t be an easy one, taking its chip design in-house isn’t a crazy idea for Google, which already designed its own server systems. Hints of its chip efforts were clear as far back as 2010, when it bought Agnilus, a stealthy company founded by former P.A Semi engineers. More recently, Google joined the OpenPower Consortium, a group started by IBM that licenses data center tech like, you guessed it, server chips.

And Google’s not alone. With both the iPad and iPhone, Apple has shifted away from general purpose processors to chips like the A7, which iOS is optimized to take full advantage of.

None of this is good news, however, for chip maker Intel, which is hoping demand for its server chips will offset its declines in the lagging PC market. While Google’s plans are far from certain, the last thing Intel wants is to lose one of its five biggest customers.