Microsoft Establishes Chip Design Laboratories

Microsoft Looks into Chip Development

by Anton Shilov
10/23/2006 | 10:52 PM

Microsoft Corp., the world’s largest maker of software, is looking forward to design chips on its own, according to claims made in an interview. The company, who has been trying hard to penetrate the market of consumer electronics for several years now, does not specify its plans, but one of the targets of the firm is to create a microprocessor for the next-generation Xbox game console.


New York Times reports that Microsoft has established its Computer Architecture Group that will develop various chips in Redmond, Washington, and Silicon Valley, California. The details of the effort are pretty vague to date, however, one of the things is quite obvious: development chips for its custom devices, such as Xbox.

“One reason for the effort is that Microsoft needs to begin thinking about the next-generation design of its Xbox game console,” said Charles P. Thacker, a veteran engineer and Microsoft engineer who will head the Silicon Valley group. Voice recognition may also be an area where the research could play a significant role.

For the first Xbox console Microsoft used an off-the-shelf microprocessor, but for the current-generation Xbox 360 the company utilizes a custom-made PowerPC architecture processor that it co-developed with IBM and even supervises its manufacturing process. Perhaps, the next-generation Xbox game console will employ a custom-designed microprocessor fully designed by Microsoft’s own engineers.

Currently it is unclear whether Microsoft plans to construct its own microprocessor architecture, such as Power or x86. Given that the former is now an open standard, the company may start developing custom chips instead of investing billions of dollars in creation of its own architecture and then building software for it.

Microsoft effort in chip design does not fit into industry trends actually: for several years companies in the information and technology (IT) markets have been trying to focus on as low amount of different areas of the business as possible. For example Philips sold its semiconductor division earlier this year, whereas IBM got rid of its personal computer business back in 2004 to focus on other areas.