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Custom Apple A4 iPad chip estimated to be $1 billion investment

post #1 of 131
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In bypassing a traditional chip maker like Intel and creating its own custom ARM-based processor for the iPad, Apple has likely incurred an investment of about $1 billion, a new report suggests.

Profiling the rise of competitors to Intel, The New York Times noted the costly investments technology companies have made to create advanced mobile processors for smartphones. But in the race to build smaller and more efficient chips for mobile devices, overseas foundries have proven to be formidable rivals against Intel, the industry leader.

"Apple, Nvidia and Qualcomm are designing their own takes on ARM-based mobile chips that will be made by the contract foundries," the report said. "Even without the direct investment of a factory, it can cost these companies about $1 billion to create a smartphone chip from scratch."

Building a factory, the report said, would cost a company about $3 billion. And as chip makers prepare to fight over who will supply processors for the next generation of devices, "the chip wars," the report noted, "are about to become even more bloody."

Intel is pushing its low-power, low-cost Atom processor for mobile devices, including smartphones, but the chips still cost more and use more power than their ARM competitors. The Atom was even pegged to be coming to Apple products in 2008, though it never came to be.

The forthcoming iPad includes a 1GHz Apple A4 processor, based on the ARM architecture, which includes an integrated CPU and graphics processing. Based on the Cortex-A9 MPCore, the processor is much faster than the ARM-based CPU that powers the iPhone 3GS.



In addition to the iPad, processors based on the ARM design will find their way into new laptops coming from HP and Lenovo.

Reference designs for the Cortex-A9 call for either two or four cores. The architecture is the successor to the ARM Cortex-A8 upon which the 600MHz iPhone 3GS is based.



As first reported by AppleInsider in 2008, Apple has been a licensee of the ARM architecture for years, but the company became invested in the chip-making business when it purchased P.A. Semi for $278 million.

But Monday's $1 billion estimate from the Times would suggest that Apple's investment went well beyond the purchase of P.A. Semi. Apple has more cash on-hand than any U.S. technology company, with an announced $39.8 billion at the end of the December quarter.

Apple claims the power efficiency of its custom-built chip will allow the iPad to offer users 10 hours of battery life in use, and over a month of standby.

"iPad is powered by our own custom silicon. We have an incredible group that does custom silicon at Apple," company co-founder Steve Jobs said when he unveiled the device. "We have a chip called A4, which is our most advanced chip we've ever done that powers the iPad. It's got the processor, the graphics, the I/O, the memory controller -- everything in this one chip, and it screams."
post #2 of 131
when was the last time that apple did this?
post #3 of 131
Good article, Oliver.

Quote:
Originally Posted by AppleInsider;1577222...

processors based on the ARM design will find their way into new laptops coming from HP and Lenovo.

What OS are they are they going to use?
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post #4 of 131
I guess we won't be seeing Atom processors anytime soon.
post #5 of 131
Quote:
Originally Posted by BMWintoxication View Post

when was the last time that apple did this?

Ha! Thats what i was wondering too.
post #6 of 131
This is a smart investment by Apple. It will offer a competitive advantage across their product lines. I imagine Apple will utilize these custom chips in all their products as soon as possible. I think back to the Amiga computer in the 80s and am stoked about the potential new capabilities and features coming. No one innovates like Apple so we should look forward to drool-worthy products coming out of Cupertino in the near future.
post #7 of 131
why would it cost 1billion? this article just didn't give me any explanation.
post #8 of 131
Do I sense the real purpose behind custom processors is content protection?
post #9 of 131
Quote:
Originally Posted by BMWintoxication View Post

when was the last time that apple did this?

It is marketing spin. This is the first time they've done this and if people knew that they might be hesitant to use the product. There's some truth in that line too.
post #10 of 131
Quote:
Originally Posted by solipsism View Post

Good article, Oliver.


What OS are they are they going to use?


Windows pequeno 1.0
post #11 of 131
Quote:
Originally Posted by BMWintoxication View Post

when was the last time that apple did this?

Did what? Design their own chip or sink a billion in R&D for one project?

I don't recall Apple ever having designed their own CPU, but they've had a VLSI design group for at least ten or fifteen years.

As to a large-scale R&D investment, Apple has probably sunk a billion over the years in designing a tablet. They probably racked up a billion in R&D costs for the iPhone.
post #12 of 131
Quote:
Originally Posted by solipsism View Post

What OS are they are they going to use?

Name-brand Linux (like Ubuntu) or derivative (like Chrome OS) as we know that Windows won't run on anything but x86.
post #13 of 131
Apple wants control of all stages of production.

Not just for profits put IP protection as well!

Am I stating the obvious here?
post #14 of 131
Quote:
Originally Posted by BMWintoxication View Post

when was the last time that apple did this?

During the 1990s, when they partnered with IBM and Motorola to produce the PowerPC.
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post #15 of 131
Apple was one of the partners (along with IBM and Motorola) in the chip designs that became the PowerPC. They also had a lot of input in the early ARM development since the Newton was based on it.

Nice thing this time is that they're using the ISA and reference designs of one of the most popular existing chip lines of all time, instead of trying to come up with something new and different from scratch.

Intel is playing catch-up here. They don't have the greater market share OR the best technology in this segment.
post #16 of 131
Quote:
Originally Posted by christopher126 View Post

Apple wants control of all stages of production.

Not just for profits put IP protection as well!

Am I stating the obvious here?

You'd be right if Apple had their own foundry.
post #17 of 131
oh, you guys mean the 1 billion as R&D investment of the whole iPad project over years? that's much more believable than saying that delevoping the custom A4 ARM chip costed that much.
post #18 of 131
Quote:
Originally Posted by BMWintoxication View Post

when was the last time that apple did this?

Arm chips are basically the industry standard. Apple is doing their own take on an Arm chip, not adopting a competing and incompatible architecture. This is closer to Intel vs AMD, than to x86 vs PowerPC. It would actually be like AMD taking Intels designs and tweaking them for their specific needs. Of course Intel designs are not licensed like Arm designs are so that isn't possible.

Quote:
Originally Posted by ghostface147 View Post

I guess we won't be seeing Atom processors anytime soon.

No we won't and they aren't in any competing smartphones either. Even some netbooks are starting to go to Arm chips (if they choose to use a mobile OS). Atom chips are only good because they work with windows. They don't offer that advantage if you want to use a mobile OS like iPhone OS or Android.
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post #19 of 131
Quote:
Originally Posted by cvaldes1831 View Post

Did what? Design their own chip or sink a billion in R&D for one project?

I don't recall Apple ever having designed their own CPU, but they've had a VLSI design group for at least ten or fifteen years.

As to a large-scale R&D investment, Apple has probably sunk a billion over the years in designing a tablet. They probably racked up a billion in R&D costs for the iPhone.

From Wikipedia's article about one of the variants of the G5:

"CPC925 Designed by Apple[8] and called the U3 or the U3H (which supports ECC memory). It is capable of supporting up to two PowerPC 970s or PowerPC 970FXs and has two 550 MHz unidirectional processor buses, a 400 MHz DDR memory controller, x8 AGP and a 400 MHz 16-bit HyperTransport tunnel. It fabricated on a 130 nm process."

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post #20 of 131
For more insight about the chip, I found this:

http://www.brightsideofnews.com/news...-the-gpu!.aspx

Apple acquired PA Semi Conductor in 2008 for $278M. edit forgot the M--at $278 I would have bought it.

Maybe a new direction for Apple? Suspect the chip wars are going to heat up. Question whether Apple will look into developing their own CPU's?
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post #21 of 131
Quote:
Originally Posted by cvaldes1831 View Post

You'd be right if Apple had their own foundry.

Apple is a design and marketing company, par excellence...

They 'control' many facets of the production thru their manufacturing partners in China...I think they want tighter control over the chips for proprietary reasons. This will allow them to stay well ahead of the competition.
post #22 of 131
So does this mean that the next iPhone is likely to have this (or similar) 1Ghz chip then, to match the iPad and compete with the Nexus?
post #23 of 131
If Apple can license and customize ARM chips that are power-efficient yet still beefy, what will Intel's place be in the future product pipeline?

I'm thinking Apple is working on making OSX independent of any particular processor type.
Software will not need to be customized for Intel vs PowerPC vs ARM.
The OS will accept the instructions and translate for the processor.
This would give them the flexibility to change their systems as needed without major re-writes for software producers like what was needed for the move to Intel.
There should be dual-core 2ghz ARM processors out by next year.

In 2 years, the MacOS will be running on ARM chips.
post #24 of 131
Apple must not have found a chip that meet all of Steve's needs, so he bought a fabless design firm (PA Semi), licensed the ARM design, and invested lots of money into the design of this new A4 chip. Sounds like it will be a good investment that should pay dividends for several years.
post #25 of 131
Quote:
Originally Posted by Appleinsider

The forthcoming iPad includes a 1GHz Apple A4 processor, based on the ARM architecture, which includes an integrated CPU and graphics processing. Based on the Cortex-A9 MPCore, the processor is much faster than the ARM-based CPU that powers the iPhone 3GS.

Who is saying that?

Quote:
A former Apple engineer writes, “A4 was stated to contain an ARM Cortex-A8, not an A9. It was an internal source that told me. I trust them. No confirmation on which SGX, but it is one.”

http://venturebeat.com/2010/02/05/apple-a4-ipad/
Quote:
A very trusted source tells me: PA Semi didn’t do the A4. It was the existing VLSI team. Apple has made custom chips for years like the Northbridges for G4 and G5.

http://venturebeat.com/2010/02/06/ap...ooler-battery/

Source: http://www.forum-3dcenter.org/vbulle...43#post7829943
post #26 of 131
Quote:
Originally Posted by macmondo View Post

why would it cost 1billion? this article just didn't give me any explanation.

The R&D + prototyping + debugging the chips functions + test production runs + any tweaks after alpha/beta + down payment and setup charges from the foundry + contracts for minimum quantity... etc.

ATI and nVidia do not own their own factories either. So chances are the numbers are modeled after ATI's and nVidia's.
post #27 of 131
Quote:
Originally Posted by extremeskater View Post

This is kind of interesting. I am having a hard time seeing the advantage to putting 1 billion into something like this but I guess over time it could expand. What is interesting is is if they can get enough power out of htis chip an put it into their notebooks Mac users would no longer be able to run Windows on their Macs.

having apple design their own chips for their macintoshes would put all those "mac are just as pcs" comments to rest, for sure...and would give intel some competition which would be beneficial for consumers...
post #28 of 131
Seems unlikely there was any reliable source of information to support this article's assertions. Also, from my POV the PA Semi acquisition may not make real financial sense due to several factors. First, there were reports that the top intellectual talent left PA Semi to start a new chip company so Apple can only use what they bought and kept, and second, these firms flourish because their immense development costs are covered by selling their chip designs to a wide variety of companies, extending the life of the investment and increasing the return. Now Apple only will design for Apple, which is great as long as every product they sell continues to be a blockbuster. Post-Jobs this may be less and less likely.

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post #29 of 131
G4, A4, will history repeat itself? ;-)
post #30 of 131
Quote:
Originally Posted by extremeskater View Post

This is kind of interesting. I am having a hard time seeing the advantage to putting 1 billion into something like this but I guess over time it could expand. What is interesting is is if they can get enough power out of htis chip an put it into their notebooks Mac users would no longer be able to run Windows on their Macs.

I don't think that this is meant for any MB or MBP. More for their mobile devices. Could appear in their 4g iPhone and iPod Touch.

Citrix does appear to have an Windows 7 virtual desktop emulator ready for the iPad.
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post #31 of 131
Is that $1B included in the teardown price?
post #32 of 131
Quote:
Originally Posted by Dr Millmoss View Post

During the 1990s, when they partnered with IBM and Motorola to produce the PowerPC.

Yes. And, when it was optimal for them to drop it (and its partners) business-wise, Apple did so. Which is probably what Apple will do with this one too, if it does not pan out in the long run.

Regardless of whether this is a home run or not, what impresses me is how the company is constantly pushing the envelope and attempting to explore new options in every part of its value chain. Its restless and relentless effort at innovation is really something.
post #33 of 131
Is it really $1B using a stock ARM design and integrating in your own parts?! That would seem more like a ground-up chip investment. The only thing this likely has different than a Snapdragon is some kind of DRM to ensure that the factories can't run a third shift.

Also, the $1B makes no sense for a processor that will never sell in quantities over 30MM. At that point, you are doubling the cost of the processor relative to a "shelf" design.

My guess is they have put in $500MM including the aquisition of PA Semi.
post #34 of 131
Quote:
Originally Posted by libertyforall View Post

G4, A4, will history repeat itself? ;-)

And, if it did so, how would it matter?
post #35 of 131
Quote:
Originally Posted by FineTunes View Post

Citrix does appear to have an Windows 7 virtual desktop emulator ready for the iPad.

It's just "streaming" (something like Apple Remote Desktop)

Quote:
Originally Posted by SpamSandwich View Post

there were reports that the top intellectual talent left PA Semi to start a new chip company so Apple can only use what they bought and kept

Yes. http://www.simmtester.com/page/news/....asp?num=12696
post #36 of 131
Quote:
Originally Posted by jacob1varghese View Post

If Apple can license and customize ARM chips that are power-efficient yet still beefy, what will Intel's place be in the future product pipeline?

I'm thinking Apple is working on making OSX independent of any particular processor type.

Uhhh...
It always *has* been independent of any particular processor type.
Remember, NeXtStep started out on a 68K. Moved to Intel. Then PowerPC. Then back to Intel. And OSX *is* the kernel for the iPhone and iPod Touch (and iPad) running on an ARM.
Quote:
Software will not need to be customized for Intel vs PowerPC vs ARM.
The OS will accept the instructions and translate for the processor.
This would give them the flexibility to change their systems as needed without major re-writes for software producers like what was needed for the move to Intel.
There should be dual-core 2ghz ARM processors out by next year.

In 2 years, the MacOS will be running on ARM chips.

What makes you think it isn't running on ARM chips today?
Bottom line, though, is that ARM chips don't have the processing power of the x86. They have lots of other advantages (e.g., power and integration), but they don't have the brute power. Even if they did, being able to run Windows on a Mac is a HUGE advantage, one that wouldn't be easily eliminated. The Mac has enjoyed a modicum of success since switching to Intel. Being able to run Windows has had a *lot* to do with that.
post #37 of 131
(in my best Yoda) even more bloody, the chip wars are about to become

post #38 of 131
Quote:
Originally Posted by extremeskater View Post

But it could also take away a major selling point for them which is the ability to run Windows.

Also I believe this is another case of Apple trying to do something that someone is already doing far better and thats Intel. Not to mention Nvidia graphics.

While this concept might work okay with the iPad and iPhone I am no sure its a good idea to have a single point of failure for everything one chip. Something goes wrong with this chip and everything is toasted.

If something goes wrong with *any* (major) chip on the iPad, the iPad is toast. What's your point?

Keep in mind, that having a single point of failure in this case is actually good. Fewer interconnects on the circuit board, fewer traces, fewer solder joints, and so on (the stuff that often fails).
post #39 of 131
This $1 billion price tag is guesstimate from the NY Times for what the development might cost, and should not be mistaken for the actual cost of anything. I suppose we could try to pick out a major increase in R&D costs from Apple's 10-K or 10-Q statements, but I don't see where even the Times has made that effort.
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post #40 of 131
Quote:
Originally Posted by doyourownthing View Post

having apple design their own chips for their macintoshes would put all those "mac are just as pcs" comments to rest, for sure...and would give intel some competition which would be beneficial for consumers...

It would also destroy Mac sales. Being able to run Windows is a *big* incentive to buy a Mac for many people. Most of the people I convince to buy a Mac have no interest because they've got so much money invested in Windows software. When I point out that they *can* run all that software on a Mac, they instantly become much more open to getting a Mac. Down the road, they may wind up being Windows haters like many people around here; but without that bridge, they would never have become Mac users in the first place.

Take the Mac and turn it into something that can't run Windows (at full speed), and you lose the ability to attract PC users this way. I don't even think SJ would give up that.
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