Alibaba cloud has silver lining for Chinese chips

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A view of the Alibaba Group headquarters in Hangzhou, Zhejiang province, China October 26, 2020. Picture taken October 26, 2020. REUTERS/Aly Song - RC2QQJ90JVKP

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HONG KONG, Oct 19 (Reuters Breakingviews) - Alibaba (9988.HK) offers a promising glimpse into China's chipmaking potential. The $450 billion e-commerce group on Tuesday unveiled read more a self-developed processor for its fast-growing cloud computing unit. The chip, which will be used to power its own data-centre servers, boasts cutting-edge technology. It's a strategic win if China's top cloud provider is not dependent on U.S. chip designers like Intel (INTC.O). Amazon's (AMZN.O) AWS debuted its own processor three years ago.

Alibaba is part of a growing cohort of technology companies in the People's Republic venturing further into semiconductors, partly spurred by President Xi Jinping's goal of achieving self-sufficiency in high-tech sectors. In August, search-engine operator Baidu (9888.HK) announced it has begun mass production of its artificial intelligence chips, while handset maker Xiaomi (1810.HK) read more is pushing into similar ventures. Alibaba’s efforts will attract the right kind of official scrutiny. (By Robyn Mak)

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