Bloomberg: Google May Design Its Own Chips

(RTTNews) - Internet giant Google Inc. (GOOG) is considering designing of its own chips in what could be a threat to Intel Corp.'s (INTC) market dominance, Bloomberg reported, quoting a person with knowledge of the matter.

Google may use technology from ARM Holdings Plc. (ARM.L, ARMH) to design the server processors. The company is one of the largest buyers of server processors.

Using its own designs will help Google manage better the interactions between hardware and software. If Google makes its own chips it could take away some revenue from Intel. The internet giant is Intel's fifth largest customer and accounts for about 4.3 percent of its revenue.

Intel has over 95 percent of the market for chips for servers that use PC processors. Advanced Micro Devices Inc. (AMD) makes up the rest of the market. ARM-based chips are used heavily in mobile phones and tablets.

GOOG closed down 0.7 percent at $1,069.96 on Thursday.

INTC, which closed up 0.2 percent at $24.47, slid around 2 percent in extended trading.