Hitting the Books: Steve Jobs’ iPhone obsession led to Apple’s silicon revolution

The fates of Apple and Taiwanese semiconductor producer TSCM have grown inextricably intertwined for the reason that introduction of the iPhone. As every subsequent technology of iPhone hurtled previous the technological capabilities of its predecessor, the processors that powered them grew more and more complicated and specialised — to the purpose that, at the moment, TSCM has turn out to be the one chip fab on the planet with the requisite instruments and know-how to truly construct them. In his new e book, Chip Warfare: The Struggle for the World’s Most Vital Know-how, financial historian Chris Miller examines the rise of processor manufacturing as an economically essential commodity, the nationwide safety implications these international provide chains may pose to America.

Chip War Cover

Simon & Schuster

Excerpted from Chip Warfare: The Struggle for the World’s Most Vital Know-how by Chris Miller. Reprinted with permission from Scribner. Copyright 2022.

Apple Silicon

The best beneficiary of the rise of foundries like TSMC was an organization that most individuals don’t even understand designs chips: Apple. The corporate Steve Jobs constructed has all the time specialised in {hardware}, nevertheless, so it’s no shock that Apple’s want to good its gadgets contains controlling the silicon inside. Since his earliest days at Apple, Steve Jobs had thought deeply in regards to the relationship between software program and {hardware}. In 1980, when his hair practically reached his shoulders and his mustache coated his higher lip, Jobs gave a lecture that requested, “What’s software program?” 

“The one factor I can consider,” he answered, “is software program is one thing that’s altering too quickly, otherwise you don’t precisely know what you need but, otherwise you didn’t have time to get it into {hardware}.” 

Jobs didn’t have time to get all his concepts into the {hardware} of the first-generation iPhone, which used Apple’s personal iOS working system however outsourced design and manufacturing of its chips to Samsung. The revolutionary new cellphone had many different chips, too: an Intel reminiscence chip, an audio processor designed by Wolfson, a modem to attach with the cell community produced by Germany’s Infineon, a Bluetooth chip designed by CSR, and a sign amplifier from Skyworks, amongst others. All had been designed by different firms.

As Jobs launched new variations of the iPhone, he started etching his imaginative and prescient for the smartphone into Apple’s personal silicon chips. A yr after launching the iPhone, Apple purchased a small Silicon Valley chip design agency referred to as PA Semi that had experience in energy-efficient processing. Quickly Apple started hiring a few of the business’s finest chip designers. Two years later, the corporate introduced it had designed its personal software processor, the A4, which it used within the new iPad and the iPhone 4. Designing chips as complicated because the processors that run smartphones is pricey, which is why most low- and midrange smartphone firms purchase off-the-shelf chips from firms like Qualcomm. Nevertheless, Apple has invested closely in R&D and chip design services in Bavaria and Israel in addition to Silicon Valley, the place engineers design its latest chips. Now Apple not solely designs the principle processors for many of its gadgets but additionally ancillary chips that run equipment like AirPods. This funding in specialised silicon explains why Apple’s merchandise work so easily. Inside 4 years of the iPhone’s launch, Apple was making over 60 p.c of all of the world’s earnings from smartphone gross sales, crushing rivals like Nokia and BlackBerry and leaving East Asian smartphone makers to compete within the low-margin marketplace for low-cost telephones. 

Like Qualcomm and the opposite chip corporations that powered the cell revolution, regardless that Apple designs ever extra silicon, it doesn’t construct any of those chips. Apple is well-known for outsourcing meeting of its telephones, tablets, and different gadgets to a number of hundred thousand meeting line staff in China, who’re chargeable for screwing and gluing tiny items collectively. China’s ecosystem of meeting services is the world’s finest place to construct digital gadgets. Taiwanese firms, like Foxconn and Wistron, that run these services for Apple in China are uniquely able to churning out telephones, PCs, and different digital. Although the electronics meeting services in Chinese language cities like Dongguan and Zhengzhou are the world’s best, nevertheless, they aren’t irreplaceable. The world nonetheless has a number of hundred million subsistence farmers who’d fortunately fasten parts into an iPhone for a greenback an hour. Foxconn assembles most of its Apple merchandise in China, however it builds some in Vietnam and India, too. 

Not like meeting line staff, the chips inside smartphones are very tough to interchange. As transistors have shrunk, they’ve turn out to be ever more durable to manufacture. The variety of semiconductor firms that may construct modern chips has dwindled. By 2010, on the time Apple launched its first chip, there have been only a handful of cutting-edge foundries: Taiwan’s TSMC, South Korea’s Samsung, and — maybe — GlobalFoundries, relying on whether or not it may reach profitable market share. Intel, nonetheless the world’s chief at shrinking transistors, remained targeted on constructing its personal chips for PCs and servers slightly than processors for different firms’ telephones. Chinese language foundries like SMIC had been attempting to catch up however remained years behind. 

Due to this, the smartphone provide chain seems to be very completely different from the one related to PCs. Smartphones and PCs are each assembled largely in China with high-value parts largely designed within the U.S., Europe, Japan, or Korea. For PCs, most processors come from Intel and are produced at one of many firm’s fabs within the U.S., Eire, or Israel. Smartphones are completely different. They’re stuffed stuffed with chips, not solely the principle processor (which Apple designs itself), however modem and radio-frequency chips for connecting with mobile networks, chips for WiFi and Bluetooth connections, a picture sensor for the digicam, at the least two reminiscence chips, chips that sense movement (so your cellphone is aware of if you flip it horizontal), in addition to semiconductors that handle the battery, the audio, and wi-fi charging. These chips make up many of the invoice of supplies wanted to construct a smartphone. 

As semiconductor fabrication capability migrated to Taiwan and South Korea, so too did the power to supply many of those chips. Utility processors, the digital mind inside every smartphone, are largely produced in Taiwan and South Korea earlier than being despatched to China for ultimate meeting inside a cellphone’s plastic case and glass display screen. Apple’s iPhone processors are fabricated completely in Taiwan. Right this moment, no firm moreover TSMC has the talent or the manufacturing capability to construct the chips Apple wants. So the textual content etched onto the again of every iPhone — “Designed by Apple in California. Assembled in China”—is very deceptive. The iPhone’s most irreplaceable parts are certainly designed in California and assembled in China. However they will solely be made in Taiwan.

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