Tuesday, Jun 9th 2020

Apple slated to begin producing its own PC processor chips


On Tuesday, reports emerged that at its upcoming WWDC event, Apple would be announcing a shift towards its own, ARM-based chips for future Mac products.

Historically, Apple has sourced its Mac processors from Intel, the leading supplier of PC chips worldwide.

But beginning in 2021, Apple's Mac product line will begin using the Apple-designed processors based on the technology currently used inside iPhones and iPads.

We're positive on the shift as it should drive significant improvements in power efficiency and as well as computing power for intensive use cases including graphics and AI - all while improving the cost and margin profile of the Mac line.

But perhaps more importantly, we believe the decision is emblematic of Apple's rapid pace of innovation, something that can sometimes be obscured looking from the outside in.

A large driver of this decision was reportedly internal disappointment at the pace of silicon improvement seen from Intel, which was viewed as a potential bottleneck for future product development plans.

While it's unclear what those development plans may entail, we see it as positive that Apple is contemplating future use cases that already surpass the technical capability of leading chipset manufacturers.

While we don't expect Apple to completely migrate off of Intel in one shot beginning next year, we think it's likely that within ~3-4 years all Mac products will be running on Apple-designed ARM processors.

As of this writing, AAPL was a portfolio holding of Titan. This security may cease to be a portfolio holding at some point in the future.
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