Apple Chiefs Unveil Profound Shift in Chip Strategy: Vertical Integration Takes Center Stage

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Apple’s hardware ambitions are undergoing a “profound” transformation, driven by a bold shift towards in-house chip design, according to a recent interview with Johny Srouji and John Ternus, the company’s Senior Vice Presidents of Hardware Technologies and Hardware Engineering, respectively. The interview, aired on Saturday, sheds light on a strategic move that marks a significant departure from the company’s traditional reliance on external chip suppliers.

Key Highlights:

  • Apple’s in-house chip design is the “most profound change” in 20 years, according to hardware execs.
  • Dependence on external suppliers is decreasing, with Apple controlling silicon design from A to Z.
  • Custom chips enable tighter hardware-software integration, leading to performance and efficiency gains.
  • Move empowers Apple to differentiate products and potentially challenge industry giants like Intel and TSMC.

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For decades, Apple’s hardware prowess has been intertwined with its close collaboration with chipmakers like Samsung and TSMC. While these partnerships yielded industry-leading processors like the A-series and M1 chips, they also imposed limitations. Dependence on external vendors meant less control over chip design and performance optimization, hindering the potential for tighter integration between hardware and software.

The tide is now turning. Apple’s internal silicon design team, spearheaded by Srouji and Ternus, has grown into a formidable force, capable of crafting custom chips from conception to fabrication. This vertical integration, as it’s known in the industry, grants Apple unprecedented control over every aspect of the chipmaking process, from architectural choices to manufacturing optimizations.

“We were using technologies from other companies, building the product around that,” Ternus explained in the interview. “Now, we do so many of these technologies in-house, and top of the list was our silicon.” This shift, he asserts, is “not just the biggest change, but the most profound change at Apple in our products over the last 20 years.”

The benefits of this in-house approach are multifold. Custom-designed chips allow for deeper hardware-software integration, unlocking performance and efficiency gains that would be impossible with off-the-shelf components. This synergy between chip and software is already evident in Apple’s M1-powered devices, which deliver exceptional performance while maintaining remarkable battery life.

Beyond performance, vertical integration empowers Apple to differentiate its products in ways that were previously unthinkable. By controlling the silicon at its core, Apple can tailor its chips to specific needs and applications, creating unique features and functionalities that set its devices apart from the competition.

This strategic move also positions Apple as a potential challenger to industry giants like Intel and TSMC. By developing its own chipmaking capabilities, Apple reduces dependence on these external players and gains greater control over its supply chain. This newfound independence could potentially disrupt the existing chip manufacturing landscape and open doors for future expansion into the broader semiconductor market.

However, the path of vertical integration is not without its challenges. Building and maintaining a world-class chip design and manufacturing infrastructure requires significant resources and expertise. Apple, while undeniably a tech powerhouse, will face stiff competition from established players in the semiconductor industry.

Apple’s embrace of in-house chip design marks a significant turning point in the company’s history. This strategic shift not only promises performance and efficiency gains for its devices but also empowers Apple to differentiate its products and potentially reshape the landscape of the chipmaking industry. While challenges lie ahead, Apple’s commitment to vertical integration demonstrates its ambition to push the boundaries of hardware innovation and carve its own path in the ever-evolving world of technology.


About the author


James Miller

Senior writer & Rumors Analyst, James is a postgraduate in biotechnology and has an immense interest in following technology developments. Quiet by nature, he is an avid Lacrosse player. He is responsible for handling the office staff writers and providing them with the latest updates happenings in the world of technology. You can contact him at