Apple has been boosting its silicon capabilities through a string of acquisitions over the past tears, reducing reliance on major suppliers such as Intel and Qualcomm.
The company has been designing core processors for itd iPhones and iPads, but lately it has also developed fingerprint chips as well as a unique chip for AirPods that allows pairing with other Apple hardware. Most recently, it unveiled an Artificial Intelligence (AI) chip powering facial recognition for iPhone X in mid-September.
Apple has also joined the consortium led by U.S. private equity firm Bain Capital that is paying 2 trillion yen ($17.7 billion) for the memory chip unit of Toshiba.
According to research firm IC Insights, Apple ranked as the world's No. 4 chip design house by revenue at the end of 2016, trailing only Qualcomm, Broadcom, and MediaTek.
By designing its own chips, Apple can better differentiate itself from others, limit its dependance from other chip suppliers, and avoid development delays through a better inventory control.
Apple could soon expand its semiconductor capabilities to core processors for Macbooks, modem chips, and even chips that could integrate touch, fingerprint and display driver functions.
Apple has invested already in research and development for baseband modem chips, in order to limit its relaince to Qualcomm and Intel.
The company has also hired engineers from Taiwan's No. 1 display-driver chip designers Novatek and panel makers of AU Optronics. Analog Devices and Synaptics are Apple's key touch sensors and display-driver IC suppliers for the moment.
Looking at Apple's recent string of acquisitions, we identify the 3D motion-tracking chip company PrimeSense, low-power wireless chip firm Passif Semiconductor, fingerprint chip firm AuthenTec, and NAND flash-controller maker Anobit.
Apple has also been acquiring AI chip-related startups, incuding facial recognition specialist RealFace, machine learning platform Turi, augmented reality companies Flyby Media and Metaio, and some teams such as Emotient, Perceptio and VocalIQ that can enhance emotion, photo and voice recognition.
The company has also hired former engineers from Qualcomm, Broadcom, Texas Instruments and others to grow its team. And of course, the company hired former Imagination Technologies' chief operation officer late last year. Obviously, the move helped the company build its own graphics processing chips that power its latest iPhones.
Key Apple component suppliers including Qualcomm, Dialog Semiconductor, Skyworks Solutions, Cirrus Logic, InvenSense and more could see their revenues dip when Apple become more independant in terms of chip supply. On the other hand, foundry service providers which make chips for Apple may actually grow on the back of its efforts to build its own chips.
Taiwan Semiconductor Manufacturing dominates Apple's chip production including core processors for this year's 10th anniversary iPhone range.