Bloomberg recently reported Apple is working on an internally designed SoC with the codename Kalamata to power its Mac computer next year. Apple switching from Intel to ARM for Mac is one of the never-dying rumors in hardware, but this time it feels different.

Apple is already one of the most sophisticated processor designers in the world, with years of experience designing high-performance SoC for smartphones. With the recent announcement of iPhone SE2, Apple is making a clear statement that the processor is becoming the differentiating factor for them, just as important as the iOS operating system. A similar move for the Mac product line doesn’t surprise us. Designing own processor for Mac can be beneficial in multiple ways: better integration and optimization between hardware and software, better control of new product release cycle, and generally better profitability. But these reasons were just as accurate 10 years ago as they are today. What has changed?

We believe one important reason is TSMC surpassing Intel in process technology and becoming the most advanced semiconductor manufacturer in the world. This is the first time in history processor designers can leverage a manufacturer that is more advanced than Intel, and possibly deliver more powerful chips.

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That is the bigger battle behind the scene as we see it. This is not just Apple vs. Intel; this is a bigger battle between Intel and the fabless ecosystem. Fabless ecosystem, led by TSMC, has clearly won the mobile market: TSMC, ARM, Apple, and Qualcomm successfully shut Intel out of the market. Now the same group of companies, together with a couple of new faces like AMD, Nvidia, Google, and Amazon, are attacking Intel’s core PC and Server CPU market, again led by TSMC. The game is on.