The WSJ is suggesting that Apple’s growing presence in Israel is focused on expanding the company’s chip design capabilities, reporting that it has hired most of the local employees of a chip design company shut down by Texas Instruments and is advertising new positions in silicon and semiconductor design.
“Apple’s Israeli acquisitions and its expanding local workforce show that the company is becoming more and more independent on the chip level, where it once had to rely on external suppliers,” said Shlomo Gradman, chairman of the Israeli Semiconductor Club.
While the report contains more speculation than hard fact, we noted yesterday that Tim Cook–who is currently visiting the country–is accompanied by Johny Srouji, whose bio on the Apple website says that he “leads all custom silicon architecture and development” …
It’s no secret that Apple’s activities in Israel to date have focused on chip design and related R&D. Its new offices in Herzliya are located close to Anobit, the NAND flash chip specialist Apple acquired back in 2011. The new offices are expected to accommodate between 600 and 1200 employees. Apple also has several hundred employees–many of them chip development specialists–at its R&D centre in Haifa.
Cook met with President Reuven Rivlin, and is also expected to meet with former President Shimon Peres during his stay in the country.
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Well, now, that’s somehow confusing. Wasn’t just recently confirmed that Apple is heading again towards Samsung for their chips? Or I got something wrong? For the past several years I was frequently asking myself why Apple is not building every single iPhone/iDevice independently? I mean, of course they’ll outsource it to China and assemble it cheaply there but why don’t they build every single part of their devices on their own?
This is design rather than manufacture.
It costs billions to build chip fabrication plants and a lot more money to retool as fabrication processes advance. It’s makes more sense financially when you’re under a certain unit volume to outsource production rather than build your own. Apple’s needs are only fraction of the chip output that are produced by companies such as Samsung and TSMC. They produce such huge volumes that they can offset the costs of needing to build and retool plants. Instead Apple concentrates on designing custom chips and contracting these companies to fabricate them.
Fair enough. Sounds quite logical, I agree with you on that one. :)