Apple's follow-up to M1 chip goes into mass production for Mac - Nikkei Asia

TAIPEI -- The next generation of Mac processors designed by Apple entered mass production this month, sources familiar with the matter told Nikkei Asia, bringing the U.S. tech giant one step closer to its goal of replacing Intel-designed central processing units with its own.

Shipments of the new chipset -- tentatively known as the M2, after Apple's current M1 processor -- could begin as early as July for use in MacBooks that are scheduled to go on sale in the second half of this year, the people said.

The latest entry in the "Apple silicon" lineup is, like its predecessor, a so-called system-on-a-chip, meaning it integrates central processing units, graphic processing units and artificial intelligence accelerators all on one chip. Sources said it will eventually be used in other Mac and Apple devices beyond the MacBook.

The new chipset is produced by key Apple supplier Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker, using the latest semiconductor production technology, known as 5-nanometer plus, or N5P. Producing such advanced chipsets takes at least three months.

The start of mass production came as Apple introduced new iMac and iPad Pro models using the M1. The company said the M1 offers CPU performance up to 85% faster than an iMac using an Intel chipset, and graphics performance that is twice as fast.

Apple first introduced the M1 in late 2020 and said it would take the company two years to fully transition from using Intel chipsets to its own. The M1 is based on U.K. chip designer Arm's chip blueprints, which underpin almost all processors used in smartphones.

Apple's shift to using its own chipsets dealt a blow to Intel, the biggest U.S. microprocessor builder that for decades dominated the personal computer industry with its X-86 chip architecture.

Apple and TSMC declined to comment for this story.

Thanks to the stay-at-home economy and teleworking boom spurred by the coronavirus pandemic, Mac shipments jumped 29% to 23.1 million units in 2020, according to research company IDC. In the January-March period, Apple shipped 6.69 million Macs, up 111% from the year before, when the pandemic disrupted electronics production around the world.

Apple is the world's No. 4 PC maker, trailing Lenovo Group Holding, HP and Dell Technologies. The PC industry continues to see healthy demand despite the overall tech market's struggles with severe component shortages and logistics issues, IDC analysts say. Production of some existing MacBook and iPad models has been delayed because of chip and component shortage issues, Nikkei has reported.

Before using the M1 chip in the iPad, Apple's tablet lineup ran on A-series processors similar to those used in iPhones, which are also designed by Apple. The company is the world's biggest tablet maker, controlling 32.5% of the market and shipping 53.2 million units in 2020, IDC data shows.

Joey Yen, an analyst with IDC, told Nikkei Asia that Apple is determined to completely replace Intel's chip offerings with its own, a move that could help the iPhone maker further differentiate its products from those of its rivals.

"It's now an irreversible trend that Apple will eventually use only its own chips in its computer products. ... Macs have their own ecosystem as well as user base because they run on Apple's own operating systems instead of Microsoft Windows," Yen said. "So far, Apple has made a successful debut, and the integrated experience has also been satisfying based on general customers' feedback."

However, Yen said it "remains to be seen" whether Apple's shift will spur other computer makers, such as HP, Dell and Lenovo, to follow suit and replace Intel's chip offerings with products designed by Qualcomm or MediaTek.

Additional reporting by Yifan Yu

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