Tuesday, October 03, 2017
Apple is expanding efforts to develop proprietary semiconductors to better compete in artificial intelligence, reducing reliance on major suppliers such as Intel and Qualcomm, according to industry sources in Asia.
The U.S. tech titan has long been known for its prowess in chip design, building core processors for iPhones and iPads. It has also created fingerprint chips, and designed a unique chip for AirPods that allows seamless pairing with other Apple hardware.
Most recently, it unveiled an AI chip powering facial recognition for iPhone X in mid-September -- a foretaste of the coming battle over next generation applications in the area of AI.
Another sign of Apple's intentions came with its decision to join the consortium led by U.S. private equity firm Bain Capital that is paying 2 trillion yen ($17.7 billion) for the memory chip unit of embattled Japanese conglomerate Toshiba.
The Cupertino, California-based company ranked as the world's No. 4 chip design house by revenue at the end of 2016, trailing only Qualcomm, Broadcom, and Taiwan's MediaTek, according to research firm IC Insights.
Chips are the essential components for powering computing functions inside electronics. They appear inside a wide range of gadgets, including notebooks, smartphones and connected devices.
"By designing its own chips, Apple can better differentiate itself from others. Further, depending too much on other chip suppliers in the age of artificial intelligence will deter its development," said Mark Li, a Hong Kong-based analyst with Sanford C. Bernstein.
Shirley Tsai, an analyst at research company IDC, said it is vital for a major tech company to foster its own semiconductor capabilities to stay ahead of the game in the AI age.
"No matter if you are Apple or Google, in the era of artificial intelligence, you will need to develop your own algorithms and software to fit your new applications and to build up your ecosystems that have as many partners in as many domains as possible," said Tsai.
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