Hitting the Books: Steve Jobs' iPhone obsession led to Apple's silicon revolution
The greatest beneficiary of the rise of foundries like TSMC was a company that most people don’t even realize designs chips: Apple. The company Steve Jobs built has always specialized in hardware, however, so it’s no surprise that Apple’s desire to perfect its devices includes controlling the silicon inside. Since his earliest days at Apple, Steve Jobs had thought deeply about the relationship between software and hardware.
Jobs didn’t have time to get all his ideas into the hardware of the first-generation iPhone, which used Apple’s own iOS operating system but outsourced design and production of its chips to Samsung. The revolutionary new phone had many other chips, too: an Intel memory chip, an audio processor designed by Wolfson, a modem to connect with the cell network produced by Germany’s Infineon, a Bluetooth chip designed by CSR, and a signal amplifier from Skyworks, among others.
Like Qualcomm and the other chip firms that powered the mobile revolution, even though Apple designs ever more silicon, it doesn’t build any of these chips. Apple is well known for outsourcing assembly of its phones, tablets, and other devices to several hundred thousand assembly line workers in China, who are responsible for screwing and gluing tiny pieces together. China’s ecosystem of assembly facilities is the world’s best place to build electronic devices.
Because of this, the smartphone supply chain looks very different from the one associated with PCs. Smartphones and PCs are both assembled largely in China with high-value components mostly designed in the U.S., Europe, Japan, or Korea. For PCs, most processors come from Intel and are produced at one of the company’s fabs in the U.S., Ireland, or Israel. Smartphones are different.
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