An interview with Apple's hardware chief revealed that Apple's internal component design work is the most "profound change" at the company in the past 20 years. In interviews recorded in November and aired Saturday, Johny Srouji, Apple's senior vice president of hardware technology, and John Ternus, Apple's senior vice president of hardware engineering, spoke to CNBC about Apple's chip business and other related topics.
Srouji explained that the combination of the two teams, as well as the software team, creates a unique working relationship that allows Apple to "build an integrated product that is fully optimized for the product," with development starting four years after launch.
Regarding bringing the design of chips and components in-house, Ternus first talked about how Apple "uses technology from other companies" to make its products and how it "builds products around those technologies."
"While Apple does have a design team that can make 'incredible' products, they are limited by the technology available," Ternus said. "I think one of the most profound changes in Apple products over the past 20 years, arguably the most profound change, is how we now do so much of our technology in-house. And the first of that is our chips."
When asked if typical Apple customers know where their chips come from and if they care, Srouji said: "They know, and I believe they really care, and here's why. We're not a chip company, but we have a world-class chip team, which I think is the best team, and we work together to make chips specifically for our products, and that gives my designers the freedom to design products."
All of this is achieved without affecting design or concentration.
TSMC and Diversification
As 3nm chips roll out in Apple products, questions have been raised about production capabilities, and if that's an issue, Srouji said he couldn't answer much because it's really a foundry issue. Referring to cooperation with chip partner TSMC, Srouji said: "We believe that their scale and capabilities can meet our production volume."
When asked if there was any urgency in concentrating chip production in Japan, Srouji said Apple "always wants to have a diversified supply. Asia, Europe and the U.S., which is why I think it's a good thing that TSMC is building a fab in Arizona, and other foundries are doing the same diversification. A large part of our internal chips do rely on TSMC. Those transistor technologies are very advanced and complex, but at the end of the day there are some principles."
"We always want to deliver and build the best chips on the planet for the best products, and that's our North Star." Joni added that this means access to the best tools and technology, as well as a partner who is aligned, reliable and able to meet Apple's needs.
Although Apple maintains a long-term cooperative relationship with TSMC, Apple has been "exploring various options" and has been open to other foundries if they meet Apple's standards and can meet Apple's requirements. "I think there are benefits to diversification," Srouji said, but Apple should always be guided by whether doing so meets its needs. "
Regarding geopolitical tensions that may affect production in Taiwan, Srouji said he could not disclose future plans, but that Apple would "always look forward, we have strategic bets, and our planning is very cautious."