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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. T

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.

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.