Microsoft has revealed its next major in-house server processor, the Azure Cobalt 200, a 132-core Arm-based CPU built on TSMC’s 3nm process and designed to raise the performance ceiling across Azure’s general-purpose compute tiers.
Like the Cobalt 100 before it, the new processor is built around an Arm Neoverse platform. This generation, however, moves to Arm’s latest CSS V3 subsystem and combines two 66-core chiplets for a total of 132 cores. Microsoft describes the chip as its most efficient data center CPU to date. Internal telemetry shows more than 50% higher performance than the Cobalt 100 across a blended set of real-world workloads.
An Azure Cobalt 200 SoC architecture diagram. (Image credit: Microsoft)
3nm silicon and a rebuilt compute complex
Detailed in the Azure Infrastructure blog, Cobalt 200 is the first Azure processor to use TSMC’s 3nm node, and the new transistor budget is visible in every part of the design. Each of the 132 cores is an Arm Neoverse V3 class CPU with a 3MB L2 cache per core. The processor also includes 12 memory channels, and the controller itself has been customized by Microsoft to enable always-on memory encryption and to support Arm’s Confidential Compute Architecture. That feature allows the chip to isolate tenant memory from the host or hypervisor while keeping performance overhead low enough for multitenant cloud environments.
One of the clearer differences between Cobalt 200 and the previous generation is in how the company has moved certain common data-center tasks into hardware. Compression and cryptography engines are now part of the SoC. These blocks sit alongside the CPU cores and offload encryption and decryption that previously consumed a noticeable share of compute time on database and analytics workloads. Microsoft has highlighted SQL Server as an early beneficiary of these offloads, with I/O encryption handled directly on the silicon.
(Image credit: Intel)
Thermals and power remain in focus with Cobalt 200, too. Microsoft says the chip delivers more than 50% higher performance than its predecessor while maintaining its status as the most power-efficient platform in Azure. Each core supports dynamic voltage and frequency scaling, allowing the processor to adjust power use in response to workload demands.
Combined with the 3nm process and the inclusion of dedicated hardware accelerators for tasks like compression and encryption, the architecture is built to maximize throughput without requiring all cores to operate at peak frequency simultaneously. While Microsoft has not published detailed thermal or TDP specifications, the company positions Cobalt 200 as a significant performance upgrade.
Cobalt 200 is delivered as part of a broader hardware stack that brings together Microsoft’s own CPUs, networking, and storage offload engines, and a new hardware security module. Each server node pairs the processor with Azure Boost, the DPU that handles software-defined networking and remote storage. This offload moves packet processing and I/O scheduling entirely out of the CPU, allowing the chip to reserve its cores for application and service workloads.
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