Feature Story -- Part 1 -- April 16, 2022

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

For investors:

• Chips: link here. Chips, semiconductor: link here.

Featured story over at The WSJ today. 

Over the twelve years or so of blogging, the few non-Bakken posts or non-Bakken themes of which I am most proud;

• the first, unquestionably was my call on Netflix;
• Devon, tied with Netflix;
  
• T (the jury is still out)
• the death of energy transition (the jury is still out)
• Apple chips, of which I am most proud to have called

I'm sure there are a few others; just don't remember them right now.

Last night I was blown away when I sent to The WSJ and saw this article, top and center of the on-line edition (linked above).

Apple Inc. had a problem. While its iPhones were flying off shelves, sales of Mac computers were stagnating. Customers weren’t thrilled with their design or performance.

Five years later, Mac sales are soaring. The turnaround is due to an unusual, yearslong effort to build one of the world’s most advanced chip-design operations inside the world’s best-known gadget maker.

Led by a onetime Intel Corp.engineer and IBM executive named Johny Srouji, Apple Corp. semiconductor division launched a risky project to replace the Intel processors that powered Apple laptops and desktops for 15 years with chips designed in-house. Those M1 chips, which are far more energy-efficient than Intel’s, enabled Macs to run much faster and generate less heat, laying the groundwork for a resurgence in Apple’s computer line. The company has now gained control over an essential component just as supply-chain disruptions cause disorder in the rest of the chip market.

Mr. Srouji’s chip operation, which already designed chips that power iPhones, has helped Apple improve the profitability of its smartphones and computers. It also has positioned Apple to move into potential future products such as a car or extended-reality headsets.

The fourth and final version of the M1 family—the M1 Ultra—debuted last month and is made for high-end Macs aimed at video and graphics professionals.

Other tech juggernauts are now trying to emulate Apple’s approach. Tesla Inc., Amazon.com Inc. and Meta Platforms Inc. are working on their own silicon as they chase more powerful computing needs for specialized applications like driverless cars, data centers and virtual reality. Meanwhile, suppliers of chips like Intel are scrambling to alter their strategy in response, investing heavily so they can fabricate chips designed by others.

Deciding to fire a crucial supplier and bring its production in-house can be a wrenching crossroads for any company. Mr. Srouji’s success building the M1 chips was far from a certainty—especially as the coronavirus pandemic threatened the rollout in 2020.

So much more at the link.

This is Part 1. Part 2 is here.

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.