The chip giant Intel (WKN: 855681) announced second quarter results last week, and the release included the announcement that the 7-nanometer processors would be delayed by approximately six months. These chips were originally scheduled to be launched in late 2021, so the delay in this debut will be postponed to 2022. At least Intel is finally starting to ramp up 10-nanometer production – which was also delayed by years.
The continuing stumbling blocks in the transition to new generations in manufacturing technology confirm the decision of Apple (WKN: 865985) to leave the company in favor of its own chip production.
Relying on Intel was a burden in several ways
After many years of speculation, Apple officially announced last month that it would spend the next two years switching Macs to its own chips. The first of these Macs will ship later this year, but it will also take time for developers to revise their software to take advantage of a new chip architecture.
Aside from the estimated $ 2 billion in cost savings the company could realize, the strategic implications surrounding product schedules for the $ 25 billion Mac segment are far more important. You may remember that Apple blamed Intel for disappointing Mac sales in early 2019.
“For our Mac business as a whole, we were faced with some processor constraints in the March quarter, resulting in a 5% decrease in sales compared to the previous year,” said CEO Tim Cook last year. “However, we believe that without these limitations, our Mac sales would have increased compared to last year and we do not believe that this challenge will have a significant impact on our third quarter results.”
Relying on Intel too much has become a burden in more ways than one. Apple relied on Intel’s ability to bring a 5G modem to the market Qualcomm (WKN: 883121) could be competitive. When you look at the Mac manufacturer’s epic two-year legal war against the cellular chip giant, it’s clear that Apple just doesn’t want to do business with Qualcomm. But Intel’s failure to develop a viable 5G modem for iPhones forced Apple to agree with Qualcomm, and Apple then bought the remnants of Intel’s modem business to take control of the development.
Take the lead
At the same time, Apple has gradually brought its chip production to an unprecedented level and an unprecedented technological ambition in recent years, including everything from the primary application processor to wireless chips to security chips that contain sensitive biometric data , self developed.
However, Apple does not make these chips itself, but instead takes them up Taiwan Semiconductor (WKN: 909800) to manufacture the silicon that Apple designs. TSMC is currently a generation ahead of Intel in terms of comparable manufacturing technologies, and this lead is likely to remain in the foreseeable future.
But that doesn’t mean TSMC is immune to everything: The leading chip foundry company recently said it will postpone test production of its 3-nanometer process because of the COVID-19 pandemic. But TSMC is one step ahead of the competition and gives priority to its 5-nanometer and 7-nanometer processes. Compared to Intel, TSMC has worked much more consistently overall, and Apple wants more control over its roadmap.
The post It looks like Apple made a good decision to stop working with Intel first appeared on The Motley Fool Germany.
This article was written by Evan Niu in English and on July 26th, 2020 on Fool.com released. It has been translated so that our German readers can take part in the discussion.
The Motley Fool owns shares of and recommends Apple and Taiwan Semiconductor Manufacturing. The Motley Fool is owned by Qualcomm. The Motley Fool recommends Intel.
Motley Fool Deutschland 2020