According to an Apple Insider report on July 8, the tech giant is providing app developers on its developer website with a support document that says its newly announced ARM chips will support Apple’s own GPU also known as a graphics card.
One of Apple’s main announcements at Apple’s 2020 World Wide Developer Conference (WWDC) was its departure from Intel’s (INTC) chips in its upcoming Mac-line starting in late 2020. Apple stated that it plans instead to make its own custom-made, silicon-based ARM chips which are expected to come with a range of enhancements that are currently being employed in Apple’s mobile devices.
Separately there were no official departure statements from the tech giant regarding AMD or graphics cards but the strategy was laid out at the WWDC where it highlighted Apple’s plans for transitioning its dependency off of third-party hardware developers.
During a WWDC session on June 22, Apple’s Director of GPU Software Gokhan Avkarogullari said, “Apple Silicon Mac contains an Apple-designed GPU, whereas Intel-based Macs contain GPUs from Intel, AMD, and Nvidia (NVDA).”
Nvidia GPUs were discontinued after Apple released its 2018 Mojave operating system. Apple has instead opted to use AMD graphic cards. AMD supplies GPUs to a range of Macs but its primary source of sales is from the PC market. According to its financial report in April, AMD’s GPU division yielded $1.44 billion in revenue which was up 73% from the previous year. AMD has more than 50% market share of high-end computer sales globally. This positions the company at the top to claim market share over Intel for the tenth consecutive quarter.
Intel sold chips to Apple at $3.4 billion per year, amounting to less than 5% of Intel’s annual sales. The overall transition away from Intel chips to Apple’s silicon powered chips closes a 15-year relationship with the chip-maker and is estimated to take Apple two years.
So far, Apple’s stock is up 30% year-to-date with 26 analysts assigning a Buy rating, 6 Hold, and 1 Sell, which altogether results in a consensus of a Strong Buy. The average analyst price target stands at $355.52 which implies a downside potential of 7%. (See Apple’s stock analysis on TipRanks).