It’s in the national interest for Apple to design its own silicon

In a surprise to nobody, Apple is developing even more processors for use in its devices. It makes total sense. In case you hadn’t noticed, silicon is becoming a national and international strategic priority to governments everywhere that have identified, correctly, that computer chips are as essential as energy if you want to enter a new age of AI-driven digital efficiency. 

With that in mind, is it any wonder that America’s biggest beleaguered company, Apple (no, that’s not Microsoft anymore), is focusing the skill and power of its silicon development teams on designing and developing all the processors used across its systems?

Designed by Apple in California and beyond

Think about it and that’s not so surprising.

We know Apple’s team develops the A- and M-series processors used inside Apple iPhones, iPads, and Macs. 

We also know the company makes the C-series 5G modems it is beginning to put inside devices. 

It also makes S-series chips for Apple Watch, R1 chips for use in Vision Pro, T-series System Management chips used inside Intel Macs, W processors as used in wearables, H chips in AirPods, and U inside AirTags. 

Apple also makes/has made additional system components from time to time, such as the M-series motion co-processors the company made until about 2017. (The M-series was subsequently applied to Apple’s chips for iPads and Macs.) 

The ill-fated AirPower project also leaned into custom-designed chips, but not much is known about those.

That’s a lot of design, a lot of iteration, and a lot of silicon already coming out of the company. Making more of it is a no-brainer.

Made all over the place, really

Except Apple doesn’t really make anything. Apple doesn’t have its own factories churning out hardware or processors. Instead it gets manufacturing partners to make them to its design and on its behalf.

TSMC is the biggest Apple chip manufacturer at this time — Apple accounts for about a quarter of its business and is TSMC’s biggest customer. Those chips have until recently been manufactured at TSMC factories far away, but this is beginning to change as TSMC’s first US chip-making factory begins to churn out chips in Arizona. 

That factory was built in response to the first Trump administration’s push to bring manufacturing into the US and is now online popping processors out for Apple’s phones. Discussing that arrangement at the time, Apple COO Jeff Williams said: “Apple is deeply committed to the future of American manufacturing, and we’ll continue to expand our investment here in the United States.” 

What drove the US to try to persuade TSMC to do this wasn’t just to feed a desire to create a few hundred specialized jobs and flash a fanciful good news story to voters; instead it reflects the strategic importance of silicon design to the US economy. It’s hard for governments to ignore that the vast majority of chips used in any electronics device are made in the strategically sensitive Asia Pacific region. That’s even before grappling with the challenge of obtaining the rare earth and other materials used inside processors, which are — like wealth — unevenly distributed. 

Just like the vast majority of people on our planet have little or no money, most nations have little or no access to the rare earths used in silicon design. But designing the chips that make use of those materials is a big part of the story. As is recycling: reusing material that is already in the US makes total sense as companies seek to source rare materials elsewhere.

Advantage, Apple

Apple arguably has the best silicon development team in the world — at least, outside Arm. The chips used in iPhones and Macs lead the industry, generating performance per watt that no one out there can match. It’s a strategic advantage for Apple, which in itself can be seen as an advantage for the US on a national basis. A US company owns those designs, which seals one aspect of digital dominance. 

With that in mind, it’s inevitable that Apple will want to maintain its focus on processor design. Doing so gives the company a competitive advantage while also propping up national security, at least to some extent.

If that is the case, then it is interesting that one of the new processors it is making is suitable for use in wearable devices — for Apple, that’s the AR glasses it has hoped to develop for years as it competes against Meta. Apple is also developing next-generation chips for Macs and iPhones, which is no surprise at all, and processor chips for Apple Intelligence servers. To some extent, the only surprise there is that the company is building a new low-power, high-performance processor capable of delivering the tough tasks required for spatial computing in spectacles.

Furthur

Of course, once the company has made spatial computing systems that exist in wearable glasses, then the promise of visionOS becomes far greater. Even now we’re seeing visionOS devices used across a range of enterprises, from medical to law enforcement. Being able to wear a real computer (as opposed to a gaming and ads platform) like sunglasses will be of key importance across a range of industries of tomorrow. Surveillance-as-a-service firms will make billions. Which makes wearables strategically significant. 

Apple’s purpose in all of this matches an international drive toward discreet computing, or the minimization of computer interfaces. These agendas dovetail with Apple’s need to perpetually plan the future of its business, and, increasingly, also with US economic and military security. 

That’s quite a lot of food for thought in one slice of silicon.

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