“The fastest on the market”. Why did Apple start making its own processors?

Apple decided to go ahead with its own production line of processors that claim to be "the fastest on the market", a surprising phrase given the history and experience of some of the largest chip makers in the world.

After announcing the new chips for its devices, Apple finally broke its dependence on the 15-year-old manufacturer Intel. The reasons for this change are due to several factors, including independence in the production line, as a way of managing the way its most important applications work, according to “Expansión”.

The emergence of companies specializing in chips, hardware manufacturers and the growing interest in software, have defined computing mainly by a horizontal and fixed structure. Along with the experience needed to design increasingly complex processors, chip makers have faced the heavy capital costs needed to work with the latest industrial technology.

In that sense, Apple decided to go ahead with its own production line of processors that claim to be "the fastest in the market", a surprising phrase considering the history and experience of some of the largest chip makers in the world. Still, such claims need to be evaluated by independent researchers.

Several factors are driving this higher level of vertical integration in the technological world. One is that needs are changing, that is, the last decade was defined by the emergence of smartphones and data centers in the cloud, thus inaugurating the era of 'Big Data', artificial intelligence (AI) and the Internet of things . More and more processing power is being required to introduce AI to each device. Therefore, it has become essential to increase performance and, at the same time, reduce energy consumption.

Custom chips are the fastest way to gain a competitive advantage. Tesla, for example, is betting that it can produce an autonomous car using only AI to analyze images from the car's cameras. Most of its rivals believe this is too ambitious. However, with the equivalent of a supercomputer with self-designed chips embedded in every car, Tesla believes it can prove that critics are wrong.

Another factor that helps in this new verticalization of technology has been a change in the structure of the semiconductor industry itself. The rise of specialized chip makers, led by Taiwan Semiconductor Manufacturing, has made it easier for newcomers to produce their own silicon. Apple's new M1 chip, made by TSMC, follows a more advanced manufacturing process than Intel can achieve in the near future.

But a chip involves much more than design and manufacture. There is a great deal of work to transform a piece of fresh silicon from the manufacturer into the final product, including packaging, assembly and testing. This has led companies like Marvell Technology to look for a new business working with big technology.

Google will be able to do much of the design work for its AI chips, but it depends directly on Broadcom for the rest of the process. In the same vein, the SQ2 chips that Microsoft manufactures for its Surface tablet models are "co-designed" with Qualcomm.

It is unclear how far companies like these will go in direct competition with established chip companies. But, judging by what Apple said last week, deepening knowledge about silicon has become an important differentiator.

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