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>> 1. Fab-building is a nightmarishly expensive proposition, and worse, you need to keep on building them to keep up. I think that's a treadmill that Apple are
by rabidsnail 16y ago
>> 1. Fab-building is a nightmarishly expensive proposition, and worse, you need to keep on building them to keep up. I think that's a treadmill that Apple are happy to leave to their suppliers (Intel, TMSC, Samsung et al).
Apple has the money, and if they can use the capacity the marginal cost of production should be lower for them, since there's not a third party taking a cut. Apple's also paying for the treadmill-running through their suppliers (unless they're getting chips at a loss, which I doubt). This is assuming Apple's internal demand is high enough to use the capacity of a whole fab.
>>2. Intel might decide not to be such a good friend if Apple get into fabrication.
If that's the case then Apple can threaten to tell on them. Intel has been down that road before, and I don't think they want to go there again. Also I think that, in the long term, Apple is trying to move away from Intel.
- jacques_chester 16y ago> Apple's also paying for the treadmill-running through their suppliers (unless they're getting chips at a loss, which I doubt). Yes, but Apple does not bear the entire economic cost of the treadmill, only a portion of it. The rest is borne by other customers of Intel, TMSC, Samsung and the like. The fact is that Apple can almost certainly get a better deal from being fabless than trying to vertically integrate a cost centre that will be as large as their entire current cash flow. That's the beauty of gains from trade. > Also I think that, in the long term, Apple is trying to move away from Intel. Maybe. Maybe not. They moved to Intel in the first place because IBM weren't interested in their business any more. The fab runs for Macs were too small and Apple wasn't enjoying the economies of scale that Intel could offer because it sells chips to many companies.