Apple's biggest "winner" in chip replacement

No permanent friends, only permanent interests.

After 15 years of "hand in hand", Apple and Intel once again staged the drama of "breaking up is always inevitable". Apple's self-developed Mac chip was "confirmed" at the 2020 Worldwide Developers Conference (WWDC20), officially announcing that the future Mac will use self-developed processors based on the Arm architecture and complete the transition within two years.

Intel's "core" situation may recover faster than expected. Foreign media reports pointed out that this will cause Intel to lose about $3 billion a year, accounting for 4% of its total revenue, which is difficult to shake Intel's grand territory with data center strategy. But what is more significant in the long run is that Apple's move may give birth to a new winner: on the one hand, in the protracted war in which Arm has encroached on Intel's traditional x86 positions in the PC and server fields, Apple's defection has added another powerful general to the Arm camp; on the other hand, the burden of manufacturing Apple's self-developed chips falls on TSMC. TSMC lost Huawei and gained Apple, becoming another winner behind the scenes. And if you really look into it, Apple, which is surging with the "core" trend, will inevitably laugh at the end.

Boosting the Arm Camp

Although the Arm camp has been working hard to replicate the success of the mobile market to the server and PC markets, the progress has not been as smooth as expected.

As early as 2017, Qualcomm took the lead in testing the waters, and ASUS, HP, and Lenovo cooperated with it to launch laptops with Snapdragon 835 processors based on the Arm architecture, followed by Huawei, Samsung, and others. In 2019, Microsoft launched the Surface Pro X, which is also equipped with the SQ1 processor based on the Arm architecture.

Although there are big names supporting it, the effect of Arm's advancement in the PC market remains to be seen. Arm, which has conquered the PC market with its low power consumption and always-on networking capabilities, is still weak in terms of performance, gaming, and ecology.

But all this may be accelerated after Apple's "defection". According to a previous report by Jiwei.com, although Apple's Mac computer market share is not large, about 20 million units per year, Apple's move is likely to have a guiding effect on the market and become the key to Arm's turnaround in the PC field.

After all, Apple has a solid foundation in the ecological level, and it is also laying a big network. With the consistency of the underlying technology of Apple computers based on Arm architecture CPUs and iPad and iPhone, the iPhone, iPad, and Mac operating systems will be further connected, which means that iPhone and iPad applications can run directly on Mac, which will significantly help Apple break down the barriers between different forms of devices, achieve seamless connection, and enhance the experience of Apple users on different terminal devices.

In the long run, if Apple's "demonstration" effect is successful, it will indirectly show that the Arm ecosystem can really compete with Intel, and the potential of the notebook market is far more than 20 million units per year, which will also trigger a new trend of rise and fall.

It is worth pointing out that while the Arm camp is rejoicing in its success in the PC field, it may also have new concerns. In addition to the difficult conquest in the server chip field, it has also encountered the sniping of the upstart RISC-V in the hot AIoT market. The recent "Rashomon" between Arm China and Arm's power grab has cast a haze on Arm's future. 

TSMC’s “Abacus”

Apple's shift to developing its own Mac processors has brought foundry giant TSMC to the forefront again.

After all, Intel is an IDM giant, and all its CPUs are manufactured in-house. Apple's self-developed chips are already the top Fabless chip, and with TSMC's advanced technology and long-term friendship with TSMC, TSMC will naturally take on the task of tapeout this time.

Foreign media reported that Apple uses the Arm architecture for independent research and development, and it is expected that the A14X processor designed for notebooks and tablets will be put into production in the fourth quarter of this year, using TSMC's 5nm process. The A14T processor designed for desktops will be put into production in the first quarter of next year, also using TSMC's 5nm process.

It is reported that TSMC has sent a team of 300 people to help Apple Mac bid farewell to Intel smoothly. Industry experts analyzed that this large team is to ensure the smooth flow of design and process, reflecting that Apple attaches great importance to the successful tape-out of the new chip and does not want to delay it too long.

Therefore, after the 120-day buffer period, when Huawei HiSilicon is unable to invest in TSMC due to extreme pressure from the United States, part of TSMC's 5nm process vacancies will continue to be "filled" by its largest customer Apple.

If, as Apple CEO Tim Cook said, Mac becomes more powerful than ever and has more functions after using self-developed chips, Mac sales may increase significantly, and the demand for chips will also increase. TSMC will undoubtedly benefit greatly from this.

Analysts therefore pointed out that TSMC will be the biggest winner of Apple Mac's "chip change".

Apple's borderless

Apple's road to developing its own chips is expanding in all directions.

Whether it is the A series chips for smartphones, the W series chips for smart watches, the T series security chips, or the H series Bluetooth chips, they have all achieved great success. Coupled with the baseband, GPU, power management chips, and sensors that are currently under research, the boundaries of Apple's chip empire are still expanding without "borders."

To date, Apple, which continues to create and optimize chips, has delivered 2 billion SoCs and has designed and delivered billions of other chips.

Regarding Apple's move into PC CPUs, industry experts emphasized that as an innovative company, it is only a matter of time for Apple to develop an Arm-based CPU. Although Intel's CPU route is almost perfect and has strong performance, the price is still relatively high. Apple's pioneering Arm-based CPU takes a different route, with low power consumption and lower cost. It can not only significantly reduce Apple's costs, but also open up Apple's ecosystem, further enhancing its future competitiveness and control.

Analysts estimate that self-developed chips will reduce the production cost of each Mac computer by $75-150, and Apple is rumored to be returning the cost savings to customers and shareholders.

Apple has been on the path of creating "chips" all the way, but it has also made mistakes and ended in dismal fashion. For example, both the baseband and GPU are still going around in circles, but it remains committed and has not changed its original intention. On this thorny road, will Apple, with its strong capital, high-end talents and extraordinary obsession, make the future of Apple "more fragrant"?