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Comment by electic | Hacker News Reader

Apple doesn't make their own hardware. What they do is design their own hardware and chips. I agree with you that if they actually made their chips this would be bad.

Case in point, you can see Intel really struggling because not only do they design their own hardware but they also make it quite literally with their own fabs. This has resulted in a lot of delays moving to 10nm and beyond.

AMD on the other hand spun out their fabs and now use fabs around the world to handle the actual manufacturing. This frees them up to actually design hardware and innovate at a much greater clip. Heh, they are even going to 7nm.

The same applies with Apple. It is quite cheap to be vertically integrated because you simply don't really have to make anything. The capital investment is quite low. It is something that Sun didn't have the luxury of.

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>"Heh, they are even going to 7nm."

The problem with quoting process nodes from different fabs is that there isn't any standard for defining the minimum feature size. IIRC, the gap between the process node's nominal and the actual minimum feature size began diverging after the 45nm era and has devolved into being absolutely meaningless at this point. Personally, I believe the vertical integration afforded by owning your own fabs actually pans out even though Intel appears to be struggling at the moment. AMD divesting their fabs was one of the largest reasons why they were so uncompetitive up until recently and a large portion of their current renaissance lies in the fact that we have reached the end of the line in terms of consistent process shrinks. There's only a few nm left until we arrive at the physical barrier of individual atoms and the independent fabs have now had enough time to catcb up to the very frontier of process engineering.

At JuliaCon 2018 in London, Sophie Wilson (Broadcom/ARM/Cambridge) gave an insightful overview about the "Future of Microprocessors", and she touched on this topic:

https://www.youtube.com/watch?v=zX4ZNfvw1cw

Having your own fabs is actually a huge advantage. It gave them so much advantage that they got lazy in the last decade (in the absence of serious competition).

It seems like what you're saying is less that vertical integration is good (which you're actually arguing against) and more that Apple isn't actually that vertically integrated.

What I am stating is that the definition of being vertically integrated has changed. The OP is arguing it is bad because of the history of capital costs associated with manufacturing.

It is not longer cost prohibitive to be vertically integrated because you don't have the upfront capital costs of manufacturing. With that, Apple is excelling at what they are doing. AMD is excelling at it as well. Historically, this type of behavior would be risky if not foolish.

Where is this struggling Intel? Their net income is astronomical.

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