Facebook Chip Ambitions Get Real – The Crazy Motley

On July 13, Bloomberg discovered an interesting development: more evidence than the social media giant Facebook (NASDAQ: FB) becomes serious about developing its own chips.

Apparently, Facebook hired Shahriar Rabii to serve as vice president at the head of the company's chip development efforts

As Bloomberg observed, Rabii's LinkedIn profile indicates that he was working on Google's alphabet from October 2014 through July. 2018 as senior director of engineering, at the head of "silicon engineering, product / program management, production and technological engineering". His profile indicates that he worked on products such as "Visual Core Pixel for ML [machine learning] and computational photography, the Titan family of secure elements, video transcoders VP9 and AV1 and others."

Bloomberg also says that Rabii will work under Andrew Bosworth, the head of the virtual reality and augmented reality of the business, "citing" people familiar with the issue.

Let's take a closer look at why Facebook continues to reinforce its chip ambitions.

Doubler for VR and AR

The Facebook chip team mentioned here seems to be focusing on chip making for its hardware mainstream – in other words, his family of Oculus virtual reality headsets.

In October 2017, Facebook announced a reality headset called the Oculus Go. This headset differed from its other headsets. virtual reality in that it incorporated a chip that handled all the required processing tasks, eliminating the need to connect it to a computer to handle this processing.

This headset did not use a designed chip by Facebook, but a developed by the wireless chip giant Qualcomm (NASDAQ: QCOM) .The chip inside the Oculus Go is a Snapdragon 821 processor relatively dated, but Qualcomm has since announced a more powerful chip dedicated to virtual reality applications and augmented, known as Snapdragon XR1.

Although I would not be surprised the future iterations of Facebook's Oculus Go headsets used newer and more powerful Qualcomm chips, it now seems that Facebook is at risk of developing its own chips for such applications, which is likely to cut Qualcomm Longer Term

One of the major reasons why device makers are passing third-party chips to internal chips is to allow a greater degree of control over the capabilities of their chips. A third-party vendor needs to build chips to satisfy a wide range of customers, with potentially different product ambitions and cost structures.

A company that develops its own chips has the luxury of adapting them to the needs of the devices they use. I'll go.

There is also room for differentiation. Even though Facebook is developing its own custom chips for its virtual reality headsets, it will probably allow key intellectual properties like CPU and GPU cores, digital signal processors, and even more third parties. Facebook can differentiate itself by choosing, for example, to use a larger GPU configuration than a merchant vendor could use, or by using a different CPU configuration.

Moreover, Facebook could choose to develop its own intellectual properties to increase the bases that each chip could have. These intellectual properties would be unique to Facebook and could constitute a competitive advantage

Investor takeaway

The investment of Facebook in Oculus seems to want to remain faithful in the long run. Given that Facebook seems to have significant value in Oculus, and that Facebook is enjoying tremendous success with the many development resources it has, I would not be surprised to see an Oculus headset go out in three to five years thanks to a fully-fledged chipset. personalized, designed by Facebook.

Suzanne Frey, executive at Alphabet, is a member of The Motley Fool's board of directors. Ashraf Eassa owns shares in Qualcomm. The Motley Fool owns shares and recommends GOOGL, GOOG and Facebook. The Motley Fool owns Qualcomm shares. The Fool Motley has a disclosure policy.