Apple Moves to Make Its Own Semiconductors

Posted on June 25, 2020 by F. Robert Jacobs
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A worker checks the glass cover-plate for Apple’s iPhone X at a factory in Tongren city, China. PHOTO: ASSOCIATED PRESS
Apple Inc.’s decision to insource its semiconductors is raising big questionsfor the electronics giant’s suppliers. Apple is breaking off a 15-year agreement with chip supplier Intel Corp. as part of a broader strategy to replace third-party parts with components designed in house. The WSJ’s Tripp Mickle writes that Apple’s drive toward its own custom components may have harsh repercussions for the broad eco-system of technology parts makers. Several supply Apple even as they fear the company will start making the components they produce. That’s a concern at the heart of many supplier-buyer pacts, but Apple’s scale and the high value of tech components make it a matter of survival for many companies. Tech manufacturersImagination Technologies and Dialog Semiconductor were staggered by earlier Apple insourcing decisions. Such moves give Apple greater control over its components, however, and can reduce costs by eliminating a link in the supply chain.
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