Apple exec explains the company’s ‘secret weapon’ when making its own chips

• Apple has increasingly used its own silicon chips in its devices.
• An exec told The Indian Express that Apple had a “tremendous strategic advantage” in doing so.
• “We design our chips from the ground up for our products,” Apple’s VP of Mac product marketing said.

Apple says it has a “secret weapon” in its approach to making the chips that power many of its devices.

The iPhone giant has increasingly relied on its own chips for new devices, and two of the company’s execs recently explained why they feel that gives it an edge.

Tim Millet, Apple’s vice president of platform architecture, and Tom Boger, Apple’s vice president of Mac product marketing, spoke with The Indian Express about the company’s chipmaking approach.

“We don’t make a bunch of chips and then decide where we are going to put them,” Boger said. “We design our chips from the ground up for our products, and that is a tremendous strategic advantage that we have.”

Millet said the company also benefited from making chips strictly for its own use rather than making them and selling them to other companies.

“Folks who do make money that way have the burden of adding margin on top of whatever they buy,” he said.

Apple began making its own chips in 2010, starting with the A4 chip, which it used in the first-generation iPad and the iPhone 4. The company increasingly turned to its own semiconductors — a strategy that gave it more control but added to R&D costs and affected its contracts with chipmakers like Intel and Imagination Technologies.

Apple’s latest chips, the M4 Pro and the M4 Max, were introduced last month for the Mac.

Millet said Apple silicon took advantage of “the three major components, the architecture, the design, and the process technology.”

“Our fourth tool, really our secret weapon, I think, is our ability to co-design these amazing chips with the system teams and the product designers as they are imagining possibilities,” he said.

CEO Tim Cook said in 2022 that Apple would start using chips made in the US for the first time in nearly a decade, sourcing chips from the Taiwanese chipmaker TSMC’s Arizona plant. He added that Apple would become “the site’s largest customer.”

The announcement came amid President Joe Biden’s efforts to boost domestic chip production and lessen reliance on chips manufactured abroad. The CHIPS Act he signed into law in 2022 set aside $52.7 billion for American semiconductor research, development, manufacturing, and workforce development, including $39 billion in manufacturing incentives for chip production stateside.

TSMC has begun producing chips for Apple at one of its plants in Phoenix, people familiar with the matter told BI.