Startup headed by Intel's ex-president releases first chips

(Reuters) - Ampere Computing, the startup headed by Intel Corp’s former president Renee James, on Tuesday said it released its first data center chips derived from the same underlying technology as mobile phone chips.

Ampere said the new chips, which cost $550 to $850, have been selected by Lenovo Group Ltd and several other companies that make servers, which power Internet-based services.

The server chip market is dominated by Intel, which controls more than 90 percent of the market. But longtime Intel rival Advanced Micro Devices Inc is expected to take market share in the coming year because Intel has delayed its newest generation of chip-making technology, saying that server chips made with it are not likely to hit the market until 2020.

But Ampere is taking a different path from both Intel and AMD. Those two use an underlying technology called x86, which powers most PCs.

Ampere is using an underlying technology licensed from Softbank Group Corp’s Arm Holdings - the same technology that powers both Android and Apple Inc’s mobile phones. The Arm-based chips require less electricity to run and are cheaper to make.

But the Arm technology has not yet matched Intel’s computing muscle, which Ampere, along with rivals such as Qualcomm Inc and Cavium Inc, are aiming to change in hopes of luring data center customers away from Intel. Major technology firms like Alphabet’s Google Inc and Facebook Inc are some of the world’s biggest buyers of Intel server chips.

James spent 28 years at Intel working closely with some of those very customers. Ampere says its chips - which come in 16- and 32-core versions with speeds of up to 3.3 gigahertz - are designed to compete with mid-level traditional server chips. But James said the company put extra care into ensuring the chips run customers’ software well as opposed to acing speed tests.

“Making things run fast in the abstract is great on PowerPoint presentations, but it doesn’t help things run fast in your customer’s data center,” she told Reuters in an interview.

Unlike Intel, Ampere does not make its own chips. It contracts that work out to Taiwan Semiconductor Co Ltd , similar to Apple and Qualcomm. But that means Ampere’s next generation of chips, due in 2019, will take advantage of TSMC’s 7-nanometer manufacturing technology, which is more advanced than Intel’s current generation of technology and is being used on Apple’s newest iPhones and Qualcomm’s latest phone processors.

“We benefit from the fact that we’re on the same process as people who are making billions of units,” James told Reuters.

Reporting by Stephen Nellis; Editing by Lisa Shumaker