Apple is launching its new line of AI based products this quarter named Apple intelligence. I was wondering if anyone in this group has been able to understand and parse the supplier ecosystem that is going to provide some of the new features in this platform . I believe there could be a new tailored LLM , a new AI browser replacing Safari and also a new AI based data storage which will support their Private cloud compute architecture along with some other additional suppliers for souped up battery and memory requirements. I am not a techie but besides TSMC there would be some of these suppliers who could potentially be fat pitches if the AI platform boosts and give a new lease of life to the iphone growth story.
Rajesh
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Interesting idea. TDK (TTDKY) headquartered in Tokyo has reportedly opened a new factory in India in order to supply Apple with iPhone batteries. I am not confident about this. I just googled who makes iPhone batteries and with a little query refinement that’s what I came up with.
Now, if we assume that’s true, does that make TDK a good investment? I don’t know. I’ve not really dug into it.
this is a dangerous way to play the market as Apple is pretty notorious for squeezing its supply chain (Tim Cook’s specialty!). tread carefully.
almost all of Apple Intelligence’s AI models are being developed internally. ChatGPT is integrated but the majority of LLM use on-device is coming from the internally hosted models (on A silicon chip w/ GPUs and neural engine), or “Private Cloud Compute” cloud-hosted versions of their custom silicon. They are assuredly hosting Private Cloud Compute at their own iCloud data centers, not public clouds given the privacy push.
- new tailored LLM? this is coming from Apple itself as a series of honed AI assistants across all of their software apps, beyond an agreement with Open AI for a direct ChatGPT integration for general knowledge.
- new AI browser? not sure where you heard that but that is wrong, AI features are being deeply embedded into Safari, Messages, Photos, and other Mac/iPhone native apps, including a revamped Siri across all devices.
- new AI data storage - likely using the same storage & memory vendors they already use for iCloud data centers or devices.
the clearest manufacturing partners i can point you to:
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as you already noted, TSMC is making A- and M- chips and likely custom silicon (S- in watch, H- chip in airpods, R- chip in AVP, etc), as has been the case for a while. iPhone 16 launch today stated 2nd generation 3nm process now used on A18 and A18 Pro in the 16/Pro. (A15/A16 Bionic were on 5nm/4nm, M1/M2 were 5nm then 5nm perf (N5P), and M3 was their first 3nm chip.)
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besides that, Arm is benefiting from every A- and M- chip being made as well, and i assume these next-gen A18 and M4 chips are finally using the v9 architecture (higher margin) … A16 and M3 used v8.
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i’d look to device specs in Copilot+ PCs (lots of vendors), Mac/iPhone, Google, Samsung phone for specific providers, … but SK Hynix, Micron, and Samsung are the big makers for HBM (for NVIDIA and AMD GPUs) and device mem.
iPhone 16 release doesn’t really change much on mem/storage over past models, so maybe you are looking for Private Cloud Compute (cloud-side for larger internal LLM models than can run on device) to push more demand from Apple within its data centers? but we have no idea what that is really going to look like besides this tech blog. probably better to stay in the broader data center plays, over NVIDIA supply chain & partners, or broader chip plays like Broadcom, Qualcomm, or broader themes like liquid cooling. reading the Apple (& overall consumer device) supply chain tea leaves is difficult as a private investor compared to the huge shops trying to do it.
-muji
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p.s. if you have access to Fool Premium (as a Fool subscriber to any premium serivce), I wrote about the Apple Event and iPhone 16 release (plus how it relates to Arm) here:
https://community.fool.com/t/apple-event-recap-sept-2024/668626
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