A source told Bloomberg that search giant Google Inc was mulling over the design of its own server processors utilizing technology from ARM Holdings. The report said the move could pose a possible threat to the market dominance of chipmaker Intel Corp. ARM Holdings is a developer of processors, data engines, software, peripherals and tools. Its solutions are utilized in the automotive, digital imaging, consumer entertainment, networking, storage, security and wireless industries.

The person, who did not wish to be named because the matter is confidential, told Bloomberg that Google would be better able to manage the hardware and software interactions if it used its own designs. However, the person said no decision has yet been made and plans may still change. The report said Google is one of the biggest buyers of server processors.

Google Spokeswoman Liz Markman was quoted in the report as saying, "We are actively engaged in designing the world's best infrastructure. This includes both hardware design (at all levels) and software design." However, she did not say if the technology firm would be developing its own chips.

Bloomberg supply chain analysis revealed that Google is the fifth largest customer of Intel, accounting for an estimated 4.3% of the chipmaker's revenue. The report said if Google moved into chip design, it would be taking away revenue from Intel, which has relied on Internet firms for its processor sales. The search giant has already undertaken the design of its own data centers worldwide with servers that could power search, online communications, video and other features.

Despite the slump in the PC market, Intel has forecasted little change in its sales next year. Led by Chief Executive Officer Brian Krzanich who took the helm in May, the Santa Clara, California-based firm is relying on the growing demand of its server chips to compensate for the loss, the report said.