It is reported Google has made significant progress developing its own application processor for Pixel smartphone and Chrome PC in the future. This is not Google’s first attempt to build custom silicon into their smartphone, current Pixel smartphones already have chips designed internally for image processing.

Apple has successfully designed its own application processor for the iPhone for years. The ability to integrate hardware and software and provide a superior user experience was one of the most important reasons for iPhone’s success over the past decade. By putting a self-designed application processor into future phones, Google is taking another step in the same direction, making it possibly the second company with full control of both processor and operating system. 

The ability to design custom processors to better support the core business is becoming a more important competitive advantage today. It happens not only in the smartphone market but also in the data center markets. All the large cloud operators including Amazon, Microsoft, Google, and Alibaba have designed their own processors to more efficiently process all the data. Semiconductors are becoming the new battleground for technology companies -- Semiconductors are eating the world.