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Is Apple Positioning Itself to Manufacture Its Own Chips?

Dave Courbanou

December 15, 2011

2 Min Read
Is Apple Positioning Itself to Manufacture Its Own Chips?

Fresh from Globes, an Israeli business news publication, comes a report that Apple is building an Israel-based R&D facility based entirely around semiconductor research. Could Apple be setting itself up to be the next big chip manufacturer? Is there the possibility we could see Apple CPUs in non-Apple products? Speculation, questions and answers are all coming right up …

According to “sources” that have informed Globes, Apple has been a “relatively small investor in R&D,” and the launch of this new research facility will expand that scope beyond the $2.4 billion Apple spent on R&D in 2010, which “was only 2 percent of its revenue,” according to Globes. What’s more, this news is independent of the recent news that Apple is in talks to acquire Israeli flash memory company Anobit. In case you were wondering, yes, this new facility also will mark Apple’s first foray into serious development occurring outside the United States.

After acquiring PA Semi, building a semiconductor research facility seems like a logical next step for Apple. It’s no secret that Apple’s mobile CPUs are incredibly impressive and frequently on par (if not better than) mobile CPUs coming out of Qualcomm or Nvidia. And that’s just based on raw number crunching, not user experience. With a retina display iPad on the horizon, Apple likely has ambitions to build mobile CPUs that are custom-tailored to deliver unique and demanding experiences Apple has designed, including driving large-scale displays or super-charging applications.

Does that mean Apple will ship its CPUs to other customers? Don’t count on it. But it could mean Apple has ambitions to put its own CPUs in more than just its mobile products. Unfounded rumors have circulated that a MacBook Air prototype had been outfitted with an A5 CPU and a special version of OS X Lion. Apple could want so much control over its products that ditching Intel and going back to its own type of CPU not only could be profitable but also offer unparalleled and unmatchable product experiences.

It’s a huge load of speculation, but as Apple becomes more laser-focused on what’s coming up for the future, there’s no telling what complete horizontal and vertical integration could provide for an end user. If Apple decides to build both flash and CPUs in house, OEMs such as Samsung, which traditionally has manufactured for Apple, could see a hit. More importantly, if in-house Apple silicon hits Apple computers, Intel could be seriously affected, too.

But something tells me this is just the kind of shake-up we need in the IT industry. Stay tuned and get excited.

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