The company is seeking a few dozen people to develop
wireless chips in Irvine, where Broadcom, Skyworks, and other companies have
offices. Recent job listings show that Apple wants employees with experience in
modem chips and other wireless semiconductors.
It's part of a broader strategy of expanding satellite
offices, letting the tech giant target engineering hotbeds and attract
employees who might not want to work at its home base in Silicon Valley. The
approach also has helped Apple further its goal of making more of its own
components.
Shares of wireless-chip makers slid Thursday after Bloomberg
reported on the effort. Skyworks fell as much as 11 percent, marking its
biggest intraday plunge since March 2020. Broadcom and Qualcomm declined more
than 4 percent each.
Apple's interest in hiring talent related to a particular
technology is usually bad news for the existing providers. The company has
increasingly touted the importance of its in-house chip designs in making its
products stand out. Intel, the industry's biggest company, has joined growing a
list of chipmakers that have lost their grip on Apple products.
In 2018, Apple started recruiting engineers in San Diego,
home of Qualcomm. Two years later, Apple chip chief Johny Srouji told employees
that the company is developing its own cellular modem to eventually replace
Qualcomm's offerings.
An Apple spokesman declined to comment on the Irvine push.
Representatives for Broadcom and Skyworks didn't respond to requests for
comment.
The Irvine expansion is in its early stages, and Apple plans
to increase its presence gradually. The company also is still working out its
companywide return-to-office plans. Just Wednesday, Apple scrapped its February
1 deadline for corporate employees to go back to in-person work.
But staffing up in Irvine is the latest sign Apple is
bringing more technology in-house. Engineers will work on wireless radios,
radio-frequency integrated circuits and a wireless system-on-a-chip, or SoC.
They'll also develop semiconductors for connecting to Bluetooth and Wi-Fi.
Those are all components currently provided to Apple by Broadcom, Skyworks, and
Qualcomm.
The effort builds on Apple's earlier work in wireless chips.
The AirPods and Apple Watch already include custom parts that let them pair
with devices, and Apple's latest iPhone handsets include U1 ultra-wideband
chips for more accurately pinpointing their location and connecting with the
AirTag accessory and other products.
“Apple's growing wireless silicon development team is
developing the next generation of wireless silicon!” one job listing says.
Another says employees will “be at the centre of a wireless SoC design group
with a critical impact on getting Apple's state-of-the-art wireless
connectivity solutions into hundreds of millions of products.”
Apple, and particularly the iPhone, is a key source of
revenue for chipmakers. In early 2020, Apple and Broadcom reached a $15 billion
supply agreement for wireless components that ends in 2023. Apple accounts for
about 20 percent of Broadcom's sales, according to data compiled by Bloomberg.
Skyworks is even more dependent on Apple, which makes up nearly 60 percent of
its revenue, the data shows.
Irvine — located in Orange County, south of Los Angeles — is
also home to wireless chip design offices for NXP Semiconductors NV, another
company Apple could hire engineers from. Apple currently relies on NXP's
near-field-communication chips for mobile payments.
The office also is near the University of California at Irvine,
which is known for its engineering programs.
Apple will emerge from the pandemic in a less centralised
form. While Cupertino remains the heart of the company, it has turned San Diego
into a bigger hub. Apple has added headcount and expanded hiring there beyond
chips to smart home technology, displays and software.
It's also expanding in Los Angeles, hiring employees to work
on Apple TV+ and other digital services. And it has an office in Newport Beach,
near Irvine, for development of augmented reality content from its NextVR
acquisition.
Apple has a history of setting up offices near existing
suppliers — in some cases, as the first step toward eventually replacing them.
That includes its chip offices in Portland, Oregon, near
Intel buildings, as well as its operations in Austin, Texas, and Orlando,
Florida, where Advanced Micro Devices Inc. has campuses. And it's expanded in
Haifa and Herzliya, Israel, where Intel has engineers, and in Munich, Germany,
home to Infineon Technologies AG's headquarters.
Srouji has also pushed Apple to open new offices in
Massachusetts, where Skyworks has offices, and Japan, where chipmakers like
Toshiba Corp. have design centers. In 2018, Apple invested in Dialog
Semiconductor Plc, which specialises in power management chips, and acquired
hundreds of employees and offices in the UK and Italy.
Last year, the company started transitioning away from Intel
chips for its Mac devices, while also designing its own in-house camera and
display technologies. Apple bought Intel's modem unit for $1 billion as well,
setting the stage to replace the component from Qualcomm.
Apple's chip development strategy has allowed the company to
build devices with unique features, helping its market value soar to nearly $3
trillion, and its chip unit is now considered one of its most prized assets.
But the strategy hasn't been without its snags.
Apple had a public dispute with UK graphics chip designer
Imagination Technologies Group in 2017 after transitioning to its own custom
graphics processors. Apple's move left Imagination nearly bankrupt. In 2020,
the two companies reached a licensing agreement. —Bloomberg LP
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