The Chip Insider®– Apple’s Chip Strategy Shift

Summaries:

Apple’s Chip Strategy Shift: Its $30B deal with Broadcom. This deal is significant on multiple levels: Apple has prided itself on being able to design chips better than any chip maker… So, bringing an intermediary between it and its foundry signals the reasons for this move are different. The $30B number may not appear that significant… this deal is part of its American Manufacturing Program (AMP) … works out to an average something at or over $10B-per-year.

How big is $10B in chips to Apple ?Apple’s annual spending on semiconductors was over $80B… It was a fifth of their total sales. If Apple made all the chips it bought in 2025, it would have been the second largest semiconductor producer in the world… It is a behemoth. So $10B-per-year in semiconductor spending is definitely a lot. To be specific, it would have amounted to … an eighth of Apple’s chips and over a third of Broadcom’s chip sales. So, it’s definitely significant on this level as well.

Geopolitics of Semiconductors: The role of the Apple-Broadcom deal is also important in the geo-politicalization of semiconductors, as last year’s AMP showed... Apple must be weighing the balance of two Q&As… The rationale for 2, as the world learned in the Biden administration, is that semiconductors are no longer just another industry. Back in the H.W. Bush administration, computer chips were considered as being no more important than potato chips. It was President Biden that framed their importance as, “The world runs on them.”… In the last century, oil and human intelligence were the two most important strategic resources. Since the latter could be grown at home, oil was the most important from a geopolitical perspective. In this century it’s become oil and Artificial Intelligence, AKA: Semiconductors. This is a far more important reason than supply chain security to reshore semiconductor design and production… As for the Apple-Broadcom $30B deal, the press release emphasized wireless connectivity chips... My sense is that getting access to chips made in Broadcom’s Fort Collins facility is what Apple is most interested in given their AMP commitment and its $1.5B carveout for upgrades there... That said, Skyworks and Qorvo are…

The big question: Is this a new AI play? … it’s too obvious to be true. It’s dumb financially, strategically, and tactically. Maybe I’m the dumb one here, but financially, data centers are a low margin business. So… Strategically, it’s a similar strategy … Tactically … Proof point is, Apple’s failed miserably at AI over the years, just like their cousin in Seattle… Realizing this, Apple has since pivoted to using Google for its AI. It’s a ‘let them burn cash while we share the profits strategy’... The only strategic question for Apple to correctly answer is: What comes after…

Q&A—NanoStack: Has IBM been sleeping since IEDM? … If anyone was sleeping, it was me, as I did miss Vandooren’s IEDM 2025 2-2 paper that makes the important switch of the “replacement MDI” (Middle Dielectric Isolation) for an “embedded MDI” that separates the N- and P-FETs. This may have been lost in translation, but imec’s gate channel stack seems to be done in one shot and they’re only showing 2 sheets for each channel. This lack of a third or even fourth sheet shows the difficulty of growing a single epitaxy for the N- and P-FETs. Though they did use separate wafers for the N and P-FETs to get the crystal orientation right, bonding them together later. The manufacturing issues with the rMDI was always a concern of mine, as pointed out in The Chip Insider. Glad to see they proved me out with a switch. Remember, I’m just a dumb economist.

A big difference with IBM’s NanoStack is that … This allows staggering, which results in a better device. So it is a significant jump forward as was imec’s eMDI. The pros and cons of both devices are described in my Chip Insider, which can be read here: https://library.techinsights.com/hg-content/b81d77da-0876-4e02-a1b8-7dc11ae9934b...

An important thing to note from this question is how it shows the importance of marketing to take mindshare advantage using recency bias. This allows one to control the narrative in the market. President Trump is a grand master of this… approach in directing mindshare to your position. It also shows how one must understand the motives of who’s presenting the information to take measure of its validity: imec needs to be marketing heavy, because their research pays the bills. For IBM and CEI-Leti, this is less direct. Still, I really admire how imec has seen technical conferences a blue-ocean channel to brand their research product. Their work has been a wonderful contributor of technical knowledge to the industry. And they even figured out how to get paid for it. No wonder Luc Van den hove of imec received two major SEMI honors for his contributions to the semiconductor industry: the 2018 SEMI Sales and Marketing Excellence Award.

“If you chase the market…You’ll always see its backside.” — David Morrell