Business / Corporate

Apple plans to ditch Intel and make its own chips for some Macs

BLOOMBERG

By next year, Apple Inc. is planning to start selling Mac computers that contain main processors it has made itself, relying on designs that helped popularize the iPhone and iPad, according to people familiar with the matter.

The Cupertino, California-based technology giant is working on three of its own Mac processors, known as systems-on-a-chip, based on the A14 processor used in the next iPhone. The first of these will be much faster than the processors in the iPhone and iPad, the people said.

Apple is preparing to release at least one Mac that uses its own chip next year, according to the people. But the initiative to develop multiple chips, codenamed Kalamata, suggests the company intends to transition more of its Mac lineup away from current supplier Intel Corp.

Taiwan Semiconductor Manufacturing Co. (TSMC), Apple’s partner for iPhone and iPad processors, will build the new Mac chips, said the people, who asked not to be identified discussing private product plans.

The components will be based on a 5-nanometer production technique, which is the same size Apple will use in the next iPhones and iPad Pros, one of the people said.

An Apple spokesman declined to comment, as did Intel and TSMC.

Apple is designing more of its own chips to gain greater control over the performance of its devices and differentiate them from rivals. Getting Macs, iPhones and iPads running the same underlying technology should make it easier for Apple to unify its apps ecosystem and update its computers more often. The move would also reduce reliance on Intel, which has struggled to maintain the annual increases in performance it once offered.

“This news has negative longer-term implications for Intel, in-line with our concerns around Intel’s future market share,” Brad Gastwirth, chief technology strategist at Wedbush Securities, wrote in a note to investors.

Current mobile device chips from Apple have multiple processing units, or cores, that handle different types of tasks. Chips in the latest iPad Pro have four cores for performance-intensive workloads and another four to handle low-power tasks, to preserve battery life.

The first Mac processors will have eight high-performance cores, codenamed Firestorm, and at least four energy-efficient cores, known internally as Icestorm. Apple is also exploring Mac processors with more than 12 cores for further in the future, the people said.

Like Qualcomm Inc. and the rest of the mobile semiconductor industry, Apple designs its smartphone chips using technology from Arm Inc., which is owned by SoftBank Group Corp. The components often use less energy than Intel’s offerings, but in recent years, Arm customers have also tried to make processors that are more powerful.

The transition to in-house Apple processor designs would likely begin with a new laptop, because the company’s first custom Mac chips won’t be able to rival the performance Intel provides for high-end MacBook Pros, iMacs and the Mac Pro desktop computer.

Like with the iPhone, Apple’s Mac processors will include several components, including the main processor, known as a Central Processing Unit or CPU, and the graphics chip, or GPU. Apple’s lower-end computers currently use Intel for graphics, while it has partnered with Advanced Micro Devices Inc. for the graphics cards in its offerings targeted at professionals.

The changes will be a blow to Intel’s prestige. Apple founder Steve Jobs and the late Intel Chief Executive Officer Paul Otellini stood on stage in 2005 to announce the first Macs with Intel processors. The decision was praised for several years, and resulted in capable computers.

But more recently the pace of Mac upgrades has declined, partly due to a slowdown in Intel’s chip advancements. That has sometimes left years between Mac refreshes, upsetting some customers. Intel has also faced manufacturing challenges that Apple has blamed for some recent declines in Mac sales.

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