Influence of ARM Architecture Increasing
The author is an analyst of NH Investment & Securities. He can be reached at hwdoh@nhqv.com. -- Ed.
Amazon has begun offering Graviton2 instances of its in-house-designed ARM-based server processor. In the future server market, ARM-based processor growth is to outpace that for Intel and AMD’s offerings. With SoftBank (owner of ARM Holdings)’s technological influence on the rise, we expect beneficiaries to include foundries manufacturing ARM chips.
Amazon launches in-house-designed AWS instance
Starting from last week, Amazon has begun offering M6g instances based on its AWS Graviton2. Going forward, AWS customers will be able to compute using Graviton2 processors instead of Intel and AMD server processors. Graviton2 processors are developed using ARM architecture from Annapurna Labs, an Israeli semiconductor design company acquired by Amazon in 2015.
The Graviton2 is a 64-core monolithic server processor that uses a Neoverse N1 core tuned from ARM’s Cortex-A76 core and ARM’s CMN-600 mesh interconnect. Of note, the Graviton2 supports an 8-channel DDR4 controller and offers 64 PCIe4 lanes. Since the service’s launch, outstanding performance has been confirmed regarding the memory latency of the Graviton2 processor. Industry estimates place the Graviton2’s efficiency at roughly 40% above that for Intel and AMD processor-based instances.
Influence of ARM architecture increasing
ARM architecture, traditionally used in low-power, low-performance mobile devices, has recently begun to be incorporated in high-performance PC and server semiconductor applications. We note that the performance of ARM-based CPUs is improving faster than that of Intel and AMD’s x86 architecture CPUs. Based on market predictions, in 2021, Apple will use its own ARM-based processor (rather than relying on Intel) in the production of the MacBook, following its strategy with the iPhone and iPad.
On the server side, ARM architecture-based processors such as Amazon’s Graviton2, Google’s TPU3, and Huawei’s Ascend 910/310 are beginning to replace Intel and AMD processors. While this trend looks negative for existing high-performance processor companies such as Intel and AMD, SoftBank (backed by ARM Holdings) looks well-positioned to benefit. We believe that TSMC and Samsung’s foundry businesses (manufacturers of ARM processors) also stand to benefit from this trend.