5 ms·

The fact that it's marginally faster is almost irrelevant. What really matters is that it's using about 1/3 the power of a comparable Intel chip while doing it

The fact that it's marginally faster is almost irrelevant. What really matters is that it's using about 1/3 the power of a comparable Intel chip while doing it, and that Intel routinely has a 60%+ quarterly profit margin (probably much higher on PC chips) that Apple now gets to keep.

vvanders 6y ago
AMD has been making similar inroads with Zen on the laptop and desktop space[1]. [1] https://www.anandtech.com/show/16214/amd-zen-3-ryzen-deep-dive-review-5950x-5900x-5800x-and-5700x-tested/8 https://www.anandtech.com/show/16214/amd-zen-3-ryzen-deep-di...
- deleted 6y ago
  [deleted]
cdolan 6y ago
Splitting hairs here, but Intel’s 60% profit margin has nothing to do with what Apple “keeps” by making their own chips. It could be dramatically more expensive to make an M1 chip and Apple is making the trade off for performance/walled garden security. Unlikely, but possible
- mehrdada 6y ago
  Your point is theoretically valid but considering M1 is essentially a rebranded A14Z chip they would have have had to make for the iPad anyway, the marginal R&D spent on M1 should be epsilon.
  - mbreese 6y ago
    It still might cost Apple more to manufacture an M1 than it costs Intel to make an i5/i7/etc. Just because they are now their own chip supplier doesn’t necessarily mean that it will always be the cheaper option. But Apple didn’t switch chips for the cost. Just like the PPC to Intel switch, they did it for the performance and efficiency. More efficient means smaller, thinner, less battery, etc... more design flexibility. That and the fact that they fully control their release cycle is also a nice bonus.
    - mehrdada 6y ago
      Are you comparing the cost to manufacture M1 to what costs Intel to make chips? I have no claim on that but that’s not what I interpreted from the above post. The relevant point of comparison is what Apple can negotiate with Intel for its chips versus M1 total cost. Please also note that a modern non-M1 Mac included a TSMC silicon (T2) on a similar order of complexity (A10-class) anyway that’s no longer present (albeit at a larger node).
      - mbreese 6y ago
        > Are you comparing the cost to manufacture M1 to what costs Intel to make chips Me personally? I have no way of knowing or estimating those costs either way. But that was how I interpreted the parent comment. If you allow that R&D costs for the M1 are largely aligned with the A* series for iPad that they would have already been paying (from your comment), then you're left with the manufacturing costs. For Intel, they have: 1) chip design R&D, 2) fab method R&D, 3) fab costs, 4) sales/marketing/profit margin By switching to their own chips, Apple has absorbed #1 and #4, and left #2 and #3 to be outsourced to TSMC. If the main costs for #1 are duplicated from the iPad chip, then you're left with fab costs (and fab R&D). But, again, even with the likely cost benefits of making your own chips (and avoiding the Intel profit margin), I doubt that was the deciding factor in switching. The costs probably made the switch possible, but wouldn't have been the primary factor. Apple would gladly pay more per chip if it was more efficient (heat and power) and if they could control the release schedule. Even if their total costs for a single M1 chip are more than for an Intel chip, they probably still would have made the switch.
      - manquer 6y ago
        Another poster noted TSMC net profit margin is 40% and gross is over 50%. Apple has only taken over the design of the chip not the manufacturing, Intel was doing both for Apple. Nobody has any data to know how the manufacturing costs have changed. There is real chance that total costs for Apple could have increased overall and there is no way to know. Intel was in difficult position over the Apple deal for years, Apple would have negotiated down significantly given their threat to move. For all we know Intel was selling at loss per chip to apple and making it up in other business.
  - danpalmer 6y ago
    This could be true for the M1, but is unlikely to be true for the M2/M1X/M1Pro or whatever they call it. There are some limitations: lack of PCI-E lanes, lack of off-package RAM support, lack of user-replaceable RAM support, lack of discrete graphics support, lack of Thunderbolt 4 support. These are all essentially non-performance features of the chips that need to be developed to bring them up to feature parity with the Intel chips. This generation happens to have carefully bypassed the need for those features, a smart move by Apple for the first release, but later releases for the higher end MacBook Pros, the iMac/iMac Pro, and the Mac Pro, will need most/all of these features, and those will likely take significant time to work into their architecture.
ac29 6y ago
TSMC, which manufactures Apple's chips, presumably at a profit, has a net margin of ~40%. https://www.tsmc.com/uploadfile/ir/quarterly/2020/3PTwU/E/3Q20ManagementReport.pdf https://www.tsmc.com/uploadfile/ir/quarterly/2020/3PTwU/E/3Q...
- deleted 6y ago
  [deleted]
- manquer 6y ago
  It is lot harder technically and politically for apple to replace TSMC part of the value chain. Apple will loose a lot of brand value if it directly employees cheap Asian labour. They could in theory move the production to U.S. however without the ecosystem of talent, suppliers and partners that Taiwan or china has it will be hard . They already spent 10+ years improving their iPad chips, switching made sense especially given intel lack of reasonable roadmap, the effort to integrate TSMC part of the chain does not have the same value given the risks today.
  - creato 6y ago
    Are you thinking of Foxconn? I don't think anything you said makes sense for TSMC.
  - piva00 6y ago
    TSMC is a foundry, there are very few companies worldwide with capacity to do the fab work that TSMC does and Apple is definitely not one of those. Are you confusing with Foxconn or other parts assemblies that Apple use? Because for Apple to roll out their own fab infrastructure would be a massive undertaking with very little benefit.
    - jl2718 6y ago
      This seemed obvious to me at first, but less the more I think of it. Samsung, for instance. Apple is already using 100% of 5nm capacity, so they are basically leasing an entire fab. The technology curve for fabs will bend in the direction of lower capital investment, smaller batches, and shorter turnaround, not smaller dimensions.
Someone 6y ago
Intel can distribute its overhead costs over a lot more CPUs than Apple, and Apple pays TSMC for making the chips, so, presumably, a large fraction of the marginal profits go to TSMC (probably not all of it, as I think Apple paid for building production capacity up front)
- ksec 6y ago
  >Intel can distribute its overhead costs over a lot more CPUs than Apple Purely from a CPU / SoC "Unit" shipped perspective. Apple currently shipped more CPU unit on both leading edge and total volume than Intel.
  - Someone 6y ago
    Thanks! Somehow, my mind only was on desktop CPUs. I couldn’t find hard numbers, but it seems that it isn’t a given that, adding all CPU power globally, there is more CPU power in servers than in smartphones.

vvanders 6y ago

AMD has been making similar inroads with Zen on the laptop and desktop space[1]. [1] https://www.anandtech.com/show/16214/amd-zen-3-ryzen-deep-dive-review-5950x-5900x-5800x-and-5700x-tested/8 https://www.anandtech.com/show/16214/amd-zen-3-ryzen-deep-di...

deleted 6y ago
[deleted]

cdolan 6y ago

Splitting hairs here, but Intel’s 60% profit margin has nothing to do with what Apple “keeps” by making their own chips. It could be dramatically more expensive to make an M1 chip and Apple is making the trade off for performance/walled garden security. Unlikely, but possible

mehrdada 6y ago
Your point is theoretically valid but considering M1 is essentially a rebranded A14Z chip they would have have had to make for the iPad anyway, the marginal R&D spent on M1 should be epsilon.
- mbreese 6y ago
  It still might cost Apple more to manufacture an M1 than it costs Intel to make an i5/i7/etc. Just because they are now their own chip supplier doesn’t necessarily mean that it will always be the cheaper option. But Apple didn’t switch chips for the cost. Just like the PPC to Intel switch, they did it for the performance and efficiency. More efficient means smaller, thinner, less battery, etc... more design flexibility. That and the fact that they fully control their release cycle is also a nice bonus.
  - mehrdada 6y ago
    Are you comparing the cost to manufacture M1 to what costs Intel to make chips? I have no claim on that but that’s not what I interpreted from the above post. The relevant point of comparison is what Apple can negotiate with Intel for its chips versus M1 total cost. Please also note that a modern non-M1 Mac included a TSMC silicon (T2) on a similar order of complexity (A10-class) anyway that’s no longer present (albeit at a larger node).
    - mbreese 6y ago
      > Are you comparing the cost to manufacture M1 to what costs Intel to make chips Me personally? I have no way of knowing or estimating those costs either way. But that was how I interpreted the parent comment. If you allow that R&D costs for the M1 are largely aligned with the A* series for iPad that they would have already been paying (from your comment), then you're left with the manufacturing costs. For Intel, they have: 1) chip design R&D, 2) fab method R&D, 3) fab costs, 4) sales/marketing/profit margin By switching to their own chips, Apple has absorbed #1 and #4, and left #2 and #3 to be outsourced to TSMC. If the main costs for #1 are duplicated from the iPad chip, then you're left with fab costs (and fab R&D). But, again, even with the likely cost benefits of making your own chips (and avoiding the Intel profit margin), I doubt that was the deciding factor in switching. The costs probably made the switch possible, but wouldn't have been the primary factor. Apple would gladly pay more per chip if it was more efficient (heat and power) and if they could control the release schedule. Even if their total costs for a single M1 chip are more than for an Intel chip, they probably still would have made the switch.
    - manquer 6y ago
      Another poster noted TSMC net profit margin is 40% and gross is over 50%. Apple has only taken over the design of the chip not the manufacturing, Intel was doing both for Apple. Nobody has any data to know how the manufacturing costs have changed. There is real chance that total costs for Apple could have increased overall and there is no way to know. Intel was in difficult position over the Apple deal for years, Apple would have negotiated down significantly given their threat to move. For all we know Intel was selling at loss per chip to apple and making it up in other business.
- danpalmer 6y ago
  This could be true for the M1, but is unlikely to be true for the M2/M1X/M1Pro or whatever they call it. There are some limitations: lack of PCI-E lanes, lack of off-package RAM support, lack of user-replaceable RAM support, lack of discrete graphics support, lack of Thunderbolt 4 support. These are all essentially non-performance features of the chips that need to be developed to bring them up to feature parity with the Intel chips. This generation happens to have carefully bypassed the need for those features, a smart move by Apple for the first release, but later releases for the higher end MacBook Pros, the iMac/iMac Pro, and the Mac Pro, will need most/all of these features, and those will likely take significant time to work into their architecture.

ac29 6y ago

TSMC, which manufactures Apple's chips, presumably at a profit, has a net margin of ~40%. https://www.tsmc.com/uploadfile/ir/quarterly/2020/3PTwU/E/3Q20ManagementReport.pdf https://www.tsmc.com/uploadfile/ir/quarterly/2020/3PTwU/E/3Q...

deleted 6y ago
[deleted]
manquer 6y ago
It is lot harder technically and politically for apple to replace TSMC part of the value chain. Apple will loose a lot of brand value if it directly employees cheap Asian labour. They could in theory move the production to U.S. however without the ecosystem of talent, suppliers and partners that Taiwan or china has it will be hard . They already spent 10+ years improving their iPad chips, switching made sense especially given intel lack of reasonable roadmap, the effort to integrate TSMC part of the chain does not have the same value given the risks today.
- creato 6y ago
  Are you thinking of Foxconn? I don't think anything you said makes sense for TSMC.
- piva00 6y ago
  TSMC is a foundry, there are very few companies worldwide with capacity to do the fab work that TSMC does and Apple is definitely not one of those. Are you confusing with Foxconn or other parts assemblies that Apple use? Because for Apple to roll out their own fab infrastructure would be a massive undertaking with very little benefit.
  - jl2718 6y ago
    This seemed obvious to me at first, but less the more I think of it. Samsung, for instance. Apple is already using 100% of 5nm capacity, so they are basically leasing an entire fab. The technology curve for fabs will bend in the direction of lower capital investment, smaller batches, and shorter turnaround, not smaller dimensions.

Someone 6y ago

Intel can distribute its overhead costs over a lot more CPUs than Apple, and Apple pays TSMC for making the chips, so, presumably, a large fraction of the marginal profits go to TSMC (probably not all of it, as I think Apple paid for building production capacity up front)

ksec 6y ago
>Intel can distribute its overhead costs over a lot more CPUs than Apple Purely from a CPU / SoC "Unit" shipped perspective. Apple currently shipped more CPU unit on both leading edge and total volume than Intel.
- Someone 6y ago
  Thanks! Somehow, my mind only was on desktop CPUs. I couldn’t find hard numbers, but it seems that it isn’t a given that, adding all CPU power globally, there is more CPU power in servers than in smartphones.