Dive Brief:
- Intel and two Chinese partners have formed a server chip venture designed to address security concerns, The Wall Street Journal reports.
- The venture will develop a programmable chip to be used alongside Intel's popular Xeon microprocessors and is designed to "kind of prove the Xeon is behaving as it is supposed to be," Martin Reynolds, a Gartner Inc. analyst, told the Journal.
- The move comes shortly after Qualcomm announced a similar joint venture based around ARM infrastructure.
Dive Insight:
"Specific local requirements" was the term being tossed around Thursday in reports about the Intel-Chinese venture. It's a soft phrase, but the obvious purpose of such a chip is to address various concerns the Chinese government might raise about server traffic, especially concerning encryption and tracking.
The potential market is huge. VentureBeat notes that Intel already sells about $16 billion a quarter in server chips. The partnership clears the way for Intel to address the concerns of China's government and increase its sales in one of the world's biggest markets.
Qualcomm's ARM infrastructure typically runs on less power than Intel's Xeon-based infrastructure. Quallcomm also created a licensing model in China that allows wide modifications of ARM chips. In contrast, Intel is trying to assure that the Xeon processor is left alone by combining it with a programmable security chip in a module.
The question of whether it's a good idea to create hardware designed to placate the Chinese government on these issues is a different debate. From a business standpoint, it's clear that this is becoming the cost of doing business there.
