Intel Crash As Apple Announce Use Of Own Chips

April 30, 2018

Intel share price drops 9 per cent on news Apple will begin using its own chips.

Following reports that Apple will no longer be using Intel chips for their iMac, MacBooks and MacPro computers, shares in the chip-making giant tumbled to their biggest drop in over 2 years. Intel’s share price fell by up to 9 per cent, with Apple supposedly intent on using their own, in-house built chips for future Mac computers.

Sharp Price Drop

The ensuing 9 per cent fall in Intel’s share price is the biggest drop in value the company has experienced since January 2016. The story was first reported by Bloomberg who cited their source as unnamed people familiar with the matter – but both Apple and Intel have declined to comment on the claims. The report alleges that Apple will start to replace Intel processors in Macs as early as 2020, as part of a gradual transition.

It is on record that Apple began designing its own chips more than a decade ago, and also that each chip is designed three years before being brought to market in a product.

In addition, Apple has been open about its interest in buying up chipmakers and the amount of money it has invested in developing processor technology. Johny Srouji, Apple’s senior vice president of hardware, said in 2017 that Apple was looking at chip-based acquisitions, and chief financial officer Luca Maestri acknowledged that a large proportion of the company’s R&D budget is spent on chips.

Pushing Innovation

Speaking at the Goldman Sachs Technology and Internet Conference held in San Francisco last year, Maestri said:

Today, we do much more in-house development of some fundamental technologies than we used to do a few years ago when we did more of that in the supplier base — the work we do around processors or sensors. It’s very important for us because we can push the envelope on innovation, we can better control timing, cost, quality. We look at that as a great strategic investment.

Apple is one of Intel’s biggest and most influential clients, and the loss of their custom would be a huge blow. Currently, the Mac Pro, iMac Pro, iMac, and Macbooks all use Intel chips.

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