Mac has been brewing for 15 years to replace Intel chip apple

 Mac has been brewing for 15 years to replace Intel chip apple

According to five people familiar with the matter, Apple has been working for many years to design its own chips to replace Intel chips used in MAC computers. Apple is likely to announce plans at the world wide Developers Conference 2020 (WWDC) as soon as Monday, and the Mac with its own chips will go on sale next year.

Apples move shows novel coronavirus is growing in expanding its capabilities and reducing its dependence on its main partners who have served them for many years, despite the fact that smaller competitors and the global economy are struggling with the new coronavirus epidemic.

Facebook, for example, is investing billions of dollars in one of Indonesias fastest-growing applications, the Indian telecoms giant and an undersea cable around Africa. Amazon has built its own fleet of cargo planes and delivery trucks. Google and apple continue to buy startups to expand their empire.

TSMC, Apples partner for designing similar parts for iPhones and iPads, is expected to produce MAC chips at its factories in Asia, a arrangement very similar to Apples use of Foxconn to assemble iPhones. Intel and apple declined to comment.

Other large technology companies, such as Amazon and Google, have designed many of their own chips to improve performance and reduce potential costs. Some tasks, such as artificial intelligence (AI) and 3D image rendering, can be handled on dedicated circuits that are more efficient than Intels general-purpose microprocessors.

Since 2005, macs have effectively used the same Intel chips as most personal computers. Developing its own processor will give Apple more control over how the MAC works. Apple has been designing chips for the iPhone and iPad, and has added custom design capabilities authorized by arm. Arm is a semiconductor company owned by Softbank group of Japan, and Apples upcoming MAC chip is expected to rely on ARM technology to improve its compatibility with its mobile devices.

Apple formed a huge chip design team based on the acquisition of pasemi, a start-up company with 150 employees, in 2008. Many of them have worked at Intel, including Johnny srouji, who reports directly to Apple CEO Tim Cook.

Apples move will be a blow to Intels reputation, especially as civilian and military officials fear that the U.S. leadership in chip manufacturing will be weakened, and they believe that chips are crucial for the U.S. to maintain its leading edge. Legislation introduced by Congress last week, rarely agreed by both parties, will inject tens of billions of dollars into areas that support semiconductor research and manufacturing in the United States.

Intel has long been a leader in the field of semiconductors in the United States, particularly in the complex manufacturing process of converting silicon chips into computer, smartphone, automotive and consumer device driver chips.

However, Apples move will not have much financial impact on Intel, at least in the short term. According to C.J. muse, an analyst at evercore, Intel sells about $3.4 billion a year in MAC chips to apple, less than 5% of Intels annual sales. Muse predicted that the blow would be close to half of that, as Apple would probably replace only some of its MAC chips. Apple sells nearly 20 million Macs a year.

Its not surprising that Intel provides chips for almost every personal computer, with sales of about 260 million pcs a year, said Tim bajarin, an analyst who tracks apple for nearly 40 years

But for Intel, the long-term impact could still be serious. The chip makers high profit margins have long been linked to its track record of providing the most powerful computing engine in the market, especially for laptops and computer servers. But Intel has been underperforming in selling chips for new technologies such as smartphones and tablets.

Apples last move to the MAC chip was in 2005, which was seen as an important step in the companys long-term rejuvenation orchestrated by co-founder Steve Jobs and a big victory for Intel. The MAC has long relied on a chip architecture called PowerPC, a collaboration between apple, Motorola and IBM. But jobs bet Intel can deliver faster performance.

Disturbing news from Intels large factories has weakened this selling point. The companys success in computing is largely due to its ability to package more transistors on each side of silicon, which allows chips to continue to perform more computing tasks at a lower cost.

But Intel suffered a serious setback in the industry wide race to miniaturize. Intels latest chip manufacturing process was expected to go into production as early as 2015, but did not enter mass production until 2019. The delay benefits TSMC and Samsung, which make chips designed by multiple companies. Competitors take advantage of Intels backwardness to stay ahead in technology.

Intel is 12 months behind, maybe even 18 months behind, said Handel Jones, chief executive of international business strategy, a consultancy for the chip industry

According to three people familiar with the matter, apple is also plagued by Intels production mistakes. Intel also ran into stronger than expected demand for other types of chips, leading to a shortfall in production, which last year curbed sales by some PC makers. These factors have greatly affected Intels image as a reliable manufacturer.

Robert Swan, Intels chief executive, vowed to make the necessary changes to regain technology leadership and prevent product shortages. But analysts and industry executives say that if Apple succeeds in launching a Mac with significantly better chips than Intel, other PC makers may follow suit, shifting more models of chip production to Intel competitors such as AMD and even starting to design their own chips, although it will take years.

Patrick Moorhead, an analyst at moorinsights & strategy, said: I think it can inspire other companies to focus on non Intel processors. In terms of reputation, this is not a good thing for Intel.

Microsoft is a long-term partner with Intel, but the company is already selling some laptops with Qualcomms arm chips. But analysts say their performance does not match that of Intels models. If that changes, they added, apple and Intel could be direct competitors, using their strong marketing capabilities to counter each others technology.

Another trend that makes it easier for apple to consider this shift is that more and more people are using web-based software, rather than software that runs on peoples personal computers and is tailored to their hardware.

Still, the MAC is a mainstay in some creative industries, such as animation and movie editing, where developers of software applications will have to modify their MAC programs to take advantage of Apples new chips. Jeff Johnson, a Mac developer in Madison, Wisconsin, said this could lead to delays in the release of some software for the new Mac. Professional software is the hardest and slowest software to upgrade, so you may not see these types of software at first, and the new Mac may encounter some problems at the beginning, he said (small)

Source: Zhang Zutao, editor in charge of Netease Technology Report_ NT5054