Apple eyes using AI to boost chip design, tech exec says

Apple is exploring the use of generative AI (genAI) to improve its custom chip development, according to Johny Srouji, senior VP of hardware technologies.

In a speech last month in Belgium, Srouji pointed out the role of advanced tools like electronic design automation (EDA) software in chip design.

He noted that genAI could increase productivity by allowing more design work to be completed in less time.

Srouji also referenced Apple’s transition to Apple Silicon in 2020 as a “huge bet,” saying the company committed to the shift without backup plans.

Apple’s custom chip efforts began with the A4 chip in 2010 and now power products like Mac computers and the Vision Pro headset.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ The EDA duopoly powers semiconductor innovation behind the scenes

While Apple receives acclaim for its custom chips, the less visible electronic design automation (EDA) software that enables their creation deserves attention.

Cadence and Synopsys dominate this critical market with a combined 74% market share and near-perfect client retention rates of approximately 100%, creating a remarkably stable duopoly 1.

These companies provide the essential software tools that transformed chip design from manual processes to sophisticated automated workflows, enabling the creation of increasingly complex processors 2.

The EDA market, valued at $11.5 billion in 2020, is projected to grow to $18.5 billion by 2026 at an 8% annual growth rate, reflecting the increasing importance of these tools as chip complexity grows 3.

Both companies maintain subscription-based revenue models generating 80-85% recurring revenue, creating extremely predictable business performance despite the volatile nature of the broader semiconductor industry 1.

Apple’s interest in applying generative AI to chip design targets this exact workflow, potentially accelerating the design process while maintaining or improving quality in an industry where software tools are already critical productivity multipliers.

2️⃣ Apple’s “no backup plan” strategy represents a distinctive risk appetite

Srouji’s revelation that Apple had “no backup plan” when transitioning Macs to Apple Silicon demonstrates an unusual willingness to make all-or-nothing bets that few other technology companies would attempt.