Apple chip's “personnel panic”

Apple's self-developed chip design began shortly after the launch of the first iPhone in 2007, but it was only after the launch of the iPhone 4 A4 processor in 2010 that Apple officially embarked on the path of self-developed chips. When the A6 processor came out of nowhere, Apple iPhones already stood out from the crowd. Subsequently, in 2013, the A7 released by Apple adopted a new 64-bit design and was built using Samsung's 28nm process, opening the door to the 64-bit era for mobile phone processors.

Since then, the A8, A9, and A10 generations have further improved the number of cores and process technology, from 20nm to 16nm, respectively, and performance has also increased steadily. After that, the A11 was also known as a performance monster. The A12-A16 also always adheres to the principle of using the latest and most advanced chip manufacturing processes. However, in the development of recent generations, it can be found that progress in the next generation of self-developed chips is gradually slowing down.

Many people blame Apple for this result due to the frequent loss of personnel in the last two years.

01

Since 2019, it is more appropriate to describe Apple's brain drain in the last three years using “a house leak coincided with overnight rain, and the ship took the lead”.

In February 2019, Gerard Williams III, the chief chip designer responsible for Apple's A7 to A12X chip development, left Apple. He is the chief architect of Apple's previous iPhone core processors and M1 series. He left with a number of key chip engineers. He then co-founded a new company, Nuvia, with others, whose main business is developing processors for data centers.

In the same year, Apple placed Mike Filippo, the chief architect of ARM, as the architecture director for Apple's self-developed M1 chip, succeeding Gerard Williams III. Mike Filippo then left Microsoft at the beginning of this year to work on processor development.

In December 2021, Jeff Wilcox, the M1 chip design director who has worked at Apple for more than 8 years, also announced that he is leaving Apple and will return to Intel. Jeff Wilcox then publicly held a position at Intel as CTO of the design engineering team, presiding over client SoC development.
In addition to the changes of these three generals, Meta, which also lays out the metaverse, competed fiercely with Apple in the fields of augmented reality and virtual reality headsets and smartwatches, and removed about 100 engineers from Apple's augmented reality, artificial intelligence, software, and hardware departments in 2021.

Recently, according to foreign media The Information, Apple's chip department is experiencing serious talent loss, and engineers and executives have left their jobs one after another to find better opportunities and improve working conditions. Johnny Srouji, Apple's senior vice president of hardware technology, expressed concern about the issue. In order to prevent the loss of talent, Apple has launched internal speeches on more than one occasion, emphasizing the risks of switching jobs to a startup company, while Apple can at least guarantee stability and high returns and weigh the pros and cons, hoping to leave more executives and engineers behind.

02

After the iPhone 14 was released in 2022, the A16 chip was criticized in many rounds. According to GB5 data obtained by Geek Bay, compared with the A15, the A16 chip's single-core CPU performance increased from 1741 to 1882, with an increase of about 8.1%. The multi-core increase was only about 10%. There was no improvement in peak performance of the GPU; there was only a slight improvement in energy efficiency. Although compared to the Android flagship, the A16's CPU advantage is still there, especially the single-core performance is more than a generation ahead, but the GPU advantage is no longer there.

Also, according to foreign media reports, the A16 Bionic chip originally planned to be installed in the iPhone 14Pro series will have a ray tracking function. This plan worked during initial software simulation tests, but in the later stages of chip development, an unsolvable problem was encountered: power consumption exceeded expectations. The industry expects the Apple A17 to use TSMC's 3nm process, which is expected to reduce power consumption and solve heat dissipation problems. At the same time, the GPU core will add ray tracking technology.

Limited by the slowdown in A-series chip development, the performance of Apple processors has improved very little in the past few years. In fact, each increase is mainly due to improvements in the chip manufacturing process, not Apple's chip design. Dylan Patel, chief analyst at research firm SemiAnalysis, said. “Apple's processor performance growth has slowed significantly since Gerard Williams III left.”

In mid-2021, Intel revealed Intel's processor roadmap for the next 5 years and new chip and packaging technology during an online live event. Intel claims it will reclaim its dominant position in the processor sector in 2025. Intel's removal of Apple's chip director Jeff Wilcox to take charge of its design engineering also shows Intel's desperate attitude to restore its home position in the processor field.

At the beginning of 2021, Nuvia was acquired by Qualcomm for 1.4 billion US dollars, along with the 3 co-founders of Nuvia and the talent resources of more than 100 Apple engineers, including Gerard Williams III, the “chief architect” of Apple M1. Having Nuvia Qualcomm has greatly strengthened its ARM self-developed architecture design capabilities. Currently, the performance gap between Apple A series processors and Qualcomm Snapdragon processors is getting smaller and smaller. Qualcomm Snapdragon 8 Gen 2 has even caught up with Apple in multi-core performance.

Although the loss of personnel is one of the reasons why self-development of Apple A series chips is slowing down, there are still many other influencing factors.

03

When introducing the A15 chip, Apple once said: What is really unique about Apple's design is that we don't simply come up with a super powerful chip and then build various functions around it, but first start from an inspiration, imagine a wonderful user experience for you, and then work together to make it a reality.

Today, the scale of A-series chips has reached a certain extent. Take the A15 as an example. In terms of CPU and GPU, it has surpassed its rivals by 30% +. Furthermore, on the one hand, development is limited by the current technical level. On the other hand, apart from the chip itself, Apple phones also have strong demand for improved performance, and demand for software will not stop. In comparison, the rewards that better interface interaction and stronger intelligence can bring may be greater than the continuous increase in chip momentum.

The reason why Apple A series processors are ahead of the Android camp by one or two generations is because of Apple's strong chip design capabilities, and on the other hand, Apple has always used the latest and most advanced chip manufacturing technology. Thanks to TSMC's foundry support, Apple's self-developed chips have made great strides and gained more autonomy in the supply chain. However, as TSMC's process moves to 3nm, the pace of process innovation is getting slower and slower, and along with that, the OEM price has risen all the way up to 20,000 US dollars. Currently, only Apple can afford such an expensive new process. This kind of development means that Apple will increase more product costs, and profit margins will be further compressed. For Apple, which pursues maximum profit, this is clearly not in line with its commercial logic.

Since the pace of Apple's self-developed chips has slowed down, will there be any changes in its chip business in the future?

04

At the beginning of 2021, Apple announced that Dan Riccio, its head of hardware engineering, would be transferred to a new position, and it was later verified that this area of focus would be AR/VR headsets. Recently, Yahoo financial analyst Dan Howley said in an interview recently that Apple will launch a VR/AR headset in the second half of 2023. He said that Apple's headset will be one of the most advanced headsets in the industry and should beat Meta's Oculus 2 and Sony's upcoming PlayStation VR 2. He said that compared to the metaverse concept, Apple is more inclined to provide AR/VR immersive experiences.

Earlier, Tianfeng Securities analyst Guo Mingqi released a report saying that Apple AR headsets will be equipped with “desktop-grade” chips with performance comparable to M1 and Sony's 4K Mirco OLED display. The goal is to replace the iPhone within 10 years, and it is expected that more than 1 billion units will be shipped.

In 2021 alone, Apple obtained 11 patents related to AR headsets, and since 2013, Apple has successively acquired more than 10 companies related to the AR field, covering various aspects such as sensors, AR software, AR content ecology, and even AR lenses. It can be seen that Apple has a good layout and high expectations in the field of AR/VR headsets.

Apple may slow down iPhone chip improvements and make every effort to make Mac chips.

Over the past year and a half, Apple has launched five main types of Mac chips, from M1 to M1 Ultra to M2. However, senior Apple expert Mark Gurman (Mark Gurman) predicts that in the next year or so, Apple will launch more products, including the M2 Pro, M2 Max, M2 Ultra, and M3.

M-series chips use ARM architecture. According to a recent study by the statistics agency Strategy Analytics, in the 2021 ARM notebook processor market, Apple took almost 90% of revenue with the M1 series alone. The M1 chip is used not only on Macs, but also on the 2021 iPad Pro. The performance is more than 50% better than the previous iPad Pro, refreshing the speed of the iPad ever.

Today, Apple is also taking action to integrate its chip business, including choosing to install Mac chips in iPads and upcoming mixed reality (MR) headsets. For example, Apple's first AR/VR headset may use the flagship M2 chip, which supports 16G memory. The company will also use an Apple Watch chip in the HomePod. This means that in the future, there will be no need to develop special chips for iPads, headsets, and HomePods, and the range of applications for M-series chips will also be wider.

05

Recently, the A17 chip parameters were revealed. The Apple A17 Bionic chip will be manufactured using TSMC's latest 3nm process and integrated with Qualcomm's 5G chip. It is said that due to the departure of the Apple chip's chief designer, the performance and architecture of the Apple A17 Bionic chip will mainly be modified by the Apple A16 Bionic. It will still use a 6-core CPU architecture, and focus more on energy optimization and battery life. In other words, the A17 will not have obvious optimization in terms of performance, but it will have better performance in terms of energy consumption.

Relying on the powerful performance/power ratio of M series and A series chips and Apple's unique connectivity ecosystem, Apple already has a great advantage in the mobile ecosystem. Whether the A17 will be surpassed by Qualcomm in the future is unknown. However, the multi-billion dollar patent settlement agreement between Apple and Qualcomm is about to expire. In 2023, when a century patent litigation war between Apple and Qualcomm begins, this must also be something that is currently making Apple feel flustered.