Recently, Apple's chip director Johny Srouji and senior vice president of hardware engineering John Ternus were interviewed by CNBC reporter Katie Tarasov and had a wonderful conversation with high information density. They discussed Apple's self-developed chip plan in detail, responding to questions such as how Apple's chip team collaborates, whether Apple wants to control everything about the chip, why it has fully shifted to self-developed computer chips, why it compared the performance of the M1 chip when it released M3, and whether Apple's brain drain has slowed down its development.
During the conversation, Srouji repeatedly emphasized that Apple is not a chip company and is not trying to compete with chip suppliers. Its desire is to build the best products in the world, including ensuring the manufacturing of the best chips. To this end, Apple hopes to develop the best technology to realize this vision. If it can buy off-the-shelf technology that can achieve its product goals, Apple will buy it, so that it can focus on what really matters and maximize Apple's interests.
The two Apple executives also rarely discussed hot topics such as Apple's seeming lag in the field of AI, Moore's Law, chip shortages, geopolitical risks in Taiwan, 3nm production capacity, and the Arizona chip manufacturing project in the United States.
Regarding some "overly sensitive" issues, such as whether to rely on Nvidia chips, the progress of self-developed baseband chips, and transactions with Qualcomm baseband chips, Srouji avoided the questions by directly interrupting or avoiding the topic.
For example, when a reporter asked: "AI running on devices, is this the future of generative AI that Apple sees?" Srouji directly avoided it and said: "We can't talk about the future."
When a reporter asked: "Do you rely on NVIDIA's products? Do you buy NVIDIA?" He quickly interrupted the question again: "We can't discuss it."
When a reporter asked what happened to Apple's baseband chip and why it announced the extension of the baseband chip deal with Qualcomm, he vaguely said that connectivity is extremely important for Apple devices and that Apple has a strong team within it that is committed to enabling technology to enhance its products.
"But I can't really give you too much and comment on future technologies and products. The reasons are obvious. We care about mobile phones, we have the team to make that happen, we work with Qualcomm, and we have worked with other companies in the past to make our games possible," Srouji said.
Here is some useful information from this conversation:
1. Talking about the original intention of self-research: Self-research of key technologies is the most profound change in the past 20 years
The two Apple executives briefly introduced themselves.
Johny Srouji joined Apple in March 2008 as vice president of the Hardware Technology Center, responsible for developing chips for the iPhone. At first, the team only had about forty or fifty engineers, and then it quickly grew and made a number of very strategically significant acquisitions, helping Apple achieve its goal of independently developing chips.
"For the past 15 years, we have been building a world-class team that is 100% focused on making the best chips for our products. This is a journey that I am passionate about." Srouji said.
John Ternus, Apple's senior vice president of hardware engineering, has been at Apple since 2001 and has been involved in almost all types of products produced by Apple. He has a very close working relationship with Srouji.
Back in 2008, Apple decided it wanted to make something it couldn't buy commercially. Apple's vision drives its efforts to own and control chips. On the basis of integrated hardware, software and operating systems, Apple's decision to develop its own chips has taken another step forward.
Apple's hardware, chips, technology, and software work closely together as a team to optimize the built integrated products entirely for the product. They program the chips together three or four years in advance, and then the chip team is free to innovate and fully optimize the software. Srouji said that with this advantage, Apple is not worried about some people who think that Apple seems to be lagging behind in AI.
He emphasized that Apple is a product company, which gives the team the freedom to innovate and invest long-term according to needs. Apple focuses on the quality of its engineers, and if you compare the cost of running and making the chip to what Apple has, it's a pretty good deal.
The Apple chip team has built a unified memory architecture that can be expanded across products (iPhone, iPad, Apple Watch, Mac). The architecture of different products is similar, which Srouji believes is important for the efficiency of the chip, product, hardware and software teams.
Ternus said that Apple initially tended to use other companies' technologies when making products, but it encountered some restrictions. "I think one of the most profound changes at Apple over the past 20 years, certainly in our products, is how we now develop these technologies internally, and the most important thing is undoubtedly the chip." He added, "We think about how to bring all these parts together to provide the best products for our customers."
2. Talk about brain drain: continue to hire the best talents and respond by stopping prosecution of NUVIA founders
Now, Apple has thousands of engineers working on chips.
When asked whether there is a brain drain that has slowed down development, Srouji replied that Apple has thousands of engineers in the United States, Europe, and Israel and has world-class teams to manufacture these chips. Apple has deep talents, skills and leadership skills to lead these teams, and will continue to hire the best talents, whether they are college students or experienced people.
He said that many times, people may choose to change companies for various reasons. But he doesn't think there is any problem with Apple, because Apple is still recruiting the best talents and wants to bring the best talents back. He is extremely proud of the Apple team. "If you see any progress we've made in this area, it's a reflection of the organization we've built and it's stronger," he said.
In recent years, Qualcomm's self-developed CPU core design capabilities have been greatly enhanced, which is inseparable from the acquisition of chip startup NUVIA in 2021. The founder of NUVIA, Gerard Williams III, was originally the designer of Apple's A-series mobile phone chips and worked at Apple for 9 years. Six months after he left Apple, he was sued by Apple for breach of contract.
As for what led Apple to drop its lawsuit against Gerard Williams and go to NUVIA, Srouji responded: "We have excellent engineers developing amazing technology and chips that are difficult to make. So we really care about intellectual property protection. Beyond that, I can't discuss legal issues, but we do care about intellectual property protection. When certain people leave for certain reasons, that is their choice, and that's okay."
3. Talking about chip layout: Apple does not want to pursue "all self-research", everything is for product experience
Does Apple want to control every part of the chip? Srouji denied it. He explained that Apple wants to control aspects that can support the product, but it will not control something for the sake of internal layout. That is not Apple's DNA.
Apple has a team that builds storage controllers for NAND memory and embeds them into the system-on-a-chip. The reason for this is that Apple not only cares about taking the best photos, but also cares about the durability of the storage device and wants to provide the best, most reliable and fastest storage. At the same time, up to 128GB of DRAM memory capacity and 400GB/s bandwidth enable the device to run machine learning locally.
Srouji said that running AI, machine learning or generative AI on a device requires three things: computing, DRAM capacity, and DRAM bandwidth. In terms of computing, going back to the Bionic chip released in 2017, Apple has developed its own machine learning engine, which is the most energy-efficient computing element for some workloads.
When reporters asked Apple users whether they care if the chips used in their devices come from Apple, Srouji believed they did because Apple is not a chip company and has a world-class chip team. Chip designers are free to design the product's heat seal, shape, software, and how to use the product without affecting the design, providing best-in-class power efficiency chips with rich features, and providing customer experience through predictable execution and early betting.
"Only Apple can do it because we are united as one," he repeatedly emphasized. "We are not a chip company, we are a product company. So our guiding principle is to provide technology that enables the best products. That's how we operate."
In his view, the iPhone can be seen as a constraint, and it is their "best friend." "I've always believed that constraints make for great engineering. By doing that, we had to create a very energy-efficient architecture, which played to our strengths when we started scaling to iPads and Macs," Srouji said.
He also mentioned that Apple will pay attention to every IP. Apple has known from the beginning that it is impossible to build every IP alone, so it is very focused on its own differentiation, starting from one licensable project at a time and building it one after another until it has all these first-class technologies today.
4. Talking about self-developed Mac chips: This is an interesting turn, Apple is challenging the limits
"Our goal is to focus the best products on the key things that will allow us to do some uniquely great things," Ternus said.
"I think the Mac provided a really interesting inflection point for us because it was a product that we'd been building for years with other people's chips, and then all of a sudden we had our own," he shared. "It seemed to me that when we started using Apple's chips in the Mac, for those of us who had been building computers for a long time, it was almost like the laws of physics changed."
He believes that even customers who don't necessarily know that Apple is using self-developed chips will see a fundamentally different computer experience.
"We decided to move the Mac to our silicon because we wanted to make a better product, and it allowed us to make the product we wanted without compromising." Srouji said, he has always believed that we should not be limited by imagination or our vision of what we want to build. Apple is pushing the envelope, which will translate into a better machine that customers will love.
Another issue that has attracted much attention is that Apple compared the performance of the M3 and M1 at the launch event, not the M2. Srouji responded: "We wanted to compare from when we started the transformation. In our video, the charts have comparisons of M1 and M2 on other systems, but we want to focus on M1. So we only focus on one chip, but compared to M1 and M2, the improvement is huge. So it is a matter of focusing on information, they are all there."
5. Talking about chip manufacturing: 3nm production capacity, TSMC cooperation, backup plan for geopolitical conflicts
How to view the maintenance of Moore's Law is an enduring topic in the chip industry. Srouji believes that measuring the progress of chips can be boiled down to three indicators: transistor density, performance and energy efficiency. Compared with 10 years ago, it has become increasingly difficult to improve these capabilities.
In his opinion, this is actually one of Apple's advantages, because Apple is not a chip company, so it does not need to worry about where to sell chips, so it has to use precious transistors wisely and efficiently, thinking about how the product will benefit and how the software will use it. "I believe that's how we progress, faster than anyone else," Srouji said.
As far as the chip shortage is concerned, he said that Apple can solve similar problems by working closely with its foundry partners in advance. But he refused to answer the 3nm production volume, and only mentioned that Apple's latest Mac chip series (M3, M3Max, etc.) are cooperating with its partners, and he believes that the partners have the technology and ability to handle Apple's business.
Regarding previous rumors that iPhone 15 overheating may be a problem caused by the 3nm chip, Srouji responded briefly: "Not as far as I know." Ternus added that the overheating problem has nothing to do with the chip. The matter has been resolved, and Apple fixed the bug with a software update.
So what are the risks of being the first company to bring 3nm chips to market? Srouji believes that the risk is there, which is why it requires the best teamwork from both sides, whether it is the foundry team or the design team. There is no regret in chip design. Once a vulnerability is discovered late, it will cost a lot to repair. Therefore, the Apple team is very careful when designing the chip and confirms that everything must pass strict inspection.
"You can't achieve these goals if you don't have the best team, but there's a risk." The results have been good enough, Srouji said, to justify the risk with a hefty reward.
Srouji is very excited about the chip manufacturing project in Arizona and believes that Apple has always supported the development of advanced manufacturing in the United States and has always supported having more silicon expertise in the United States.
"We have thousands of engineers in the United States and thousands of engineers in Europe, Israel and elsewhere, but we only hire the best talent in the United States," Srouji said. "We also work with universities on curriculum to prepare their students, the next generation of engineers, and we also encourage our partners to expand their manufacturing capabilities in the United States, so I think that's exciting. It's a great move."
Asked how he viewed the urgency of advanced chip manufacturing being concentrated in Taiwan, Srouji said that Apple wants to have a diversified supply and always wants to provide and manufacture the best chips in the world for the best products, which means using the best tools and the best technology. It needs to have a wafer factory with this technology. It also hopes to have a partner with consistent goals, reliable execution and delivery, which can expand according to Apple's needs.
Srouji spoke highly of TSMC, saying that a large part of Apple's internal chips are provided by TSMC. Apple has been cooperating with TSMC for more than ten years and they have always been very reliable.
But he also added that Apple always explores various options to obtain the best technology. If some foundries have it and meet Apple's requirements, Apple will try it.
The reporter further asked whether Apple, which is known for its precautionary measures, has a backup plan to keep itself away from problems, and whether the geopolitics in Taiwan, China, will spiral?
In response, Srouji responded: "I can't answer future plans, but what I can say is that I fully support what you said. We always look forward. We have strategic bets and we are very cautious about our plans."
Conclusion: Everything is to create the best product
Overall, Apple's goals in chip research and development are very clear. Everything is aimed at creating the best products and has no intention of participating in chip competition on the market. In terms of specific practices, Apple also starts from product needs, chooses to develop in-house or purchase off-the-shelf chip technology and products on the market, and delivers the most efficient solution possible to the final device through a combination of software and hardware.
For ordinary consumers, it doesn’t matter whether the chip in Apple’s device is self-developed or purchased from a third party. It doesn’t matter whether it is 3nm or 5nm, whether it is Apple’s self-developed or Qualcomm’s baseband chip. What they really care about is whether the Internet speed is faster, whether the battery life is longer, whether the application can improve productivity, whether the photos look better, whether playing games is smoother...these device-side experiences are the competitiveness that Apple relies on for its survival.