Apple exec explains the company's 'secret weapon' when making its own chips

• Apple has increasingly used its own silicon chips in its devices in recent years.
• Two Apple execs told The Indian Express that the company has a "tremendous strategic advantage" in doing so.

Apple says it has a "secret weapon" in its approach to making the chips that power many of its devices.

The iPhone giant has been increasingly relying on its own chips for new devices, and two of the company's execs recently explained why they feel that gives it an edge.

Tim Millet, Apple's vice president of platform architecture at Apple, and Tom Boger, Apple's vice president of Mac product marketing, spoke with The Indian Express about the company's silicon chipmaking approach.

"We don't make a bunch of chips and then decide where we are going to put them," Boger said. "We design our chips from the ground up for our products, and that is a tremendous strategic advantage that we have."

The company also benefits from making chips strictly for its own use rather than being a traditional chip-maker that sells to other companies, Millet said.

"Folks who do make money that way have the burden of adding margin on top of whatever they buy," he told The Indian Express.

Apple began making its own chips in 2010, starting with the A4 chip, which was used in the first-generation iPad as well as the iPhone 4. The company has increasingly turned to its own semiconductors in subsequent years — a strategy that gave it more control. However, it also came with added R&D costs and impacted the nature of its contracts with chipmakers like Intel and Imagination Technologies.

Apple's latest chips, the M4 Pro and M4 Max, were introduced last month for the Mac.

Millet said Apple silicon takes advantage of "three major components, the architecture, the design, and the process technology."

"Our fourth tool, really our secret weapon, I think, is our ability to co-design these amazing chips with the system teams and the product designers as they are imagining possibilities," he told The Indian Express.

Apple CEO Tim Cook announced in 2022 that the company would start using chips made in the US for the first time in nearly a decade, sourcing chips from Taiwanese chipmaker TSMC's Arizona plant and becoming "the site's largest customer."

The decision came amid President Biden's efforts to boost domestic chip production and lessen reliance on chips manufactured abroad. The CHIPS Act he signed into law in 2022 set aside $52.7 billion for American semiconductor research, development, manufacturing, and workforce development, including $39 billion in manufacturing incentives for chip production stateside.

TSMC began producing chips for Apple at one of its Phoenix, Arizona, plants earlier this year, sources familiar with the matter confirmed to BI.