Apple Could Soon Pivot Away From Intel, Qualcomm to Build Its Own Chips

Apple Inc. (AAPL) - Get Apple Inc. (AAPL) Report is said to be interested in building its own lineup of core processors for notebooks, modem chips for its flagship iPhone handheld device and a new kind of chip that can integrate touch, fingerprint and display driver functions, the Nikkei Asian Review reported.

Creating its own semiconductors in-house would better protect Apple's proprietary technology and make chips more specifically catered to its products' needs and capabilities. Doing so would drive down costs and support better inventory control, Gartner analyst Samuel Wang said.

Apple has invested in R&D for baseband modem chips used in cellphones, which the company currently buys from Qualcomm Inc. (QCOM) - Get QUALCOMM Incorporated Report and Intel Corp. (INTC) - Get Intel Corporation (INTC) Report , according to Bernstein analysts. Insider claims of such a move could be substantiated by Apple's poaching of former Qualcomm modem chip engineer Esin Terzioglu earlier this year.

For notebook chips specifically, Apple is readying to build its own chips for powerful yet thin computers instead of relying on Intel as a producer. The Apple-made chips are modeled after SoftBank Group Corp.-controlled (SFTBF) ARM Holding's design, insiders said.

It seems Apple has been preparing to move away from its years long reliance on third-party chipmakers for some time.

Apple unveiled in September its own artificial intelligence chip to power facial recognition in the new iPhone X model. The company also joined the group of investors led by Bain Capital that recently won a deal for Toshiba Corp.'s (TOSBF) prized chip unit. Apple currently has 200 chip-related positions available on its hiring website.

Apple stock gained 0.22% to $153.61 in midday trading Friday.

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