--- title: "\"Hardware veteran\" and \"chip czar\" both promoted, Apple reveals its AI competition trump card: SoC" type: "News" locale: "en" url: "https://longbridge.com/en/news/283578404.md" description: "Apple Inc. has appointed John Ternus as the new CEO and promoted Johny Srouji to Chief Hardware Engineer, marking its strategy to accelerate the independent development of chips. This move aims to closely integrate hardware and software, avoiding unnecessary capital expenditures. Compared to other tech giants, Apple has adopted a more cautious investment strategy in the field of artificial intelligence, relying on Google's Gemini model to support its AI capabilities" datetime: "2026-04-22T01:30:32.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/283578404.md) - [en](https://longbridge.com/en/news/283578404.md) - [zh-HK](https://longbridge.com/zh-HK/news/283578404.md) --- # "Hardware veteran" and "chip czar" both promoted, Apple reveals its AI competition trump card: SoC According to Zhitong Finance APP, on Monday, in addition to Apple Inc. (AAPL.US) announcing the appointment of hardware chief John Ternus as the new CEO, it also announced a significant personnel promotion that may be equally important for measuring the company's development direction. Taking over Ternus as hardware chief is Johny Srouji, who leads Apple's in-house chip development team. Apple has established a new title for Srouji—Chief Hardware Engineer, and the appointment is effective immediately. Ternus will officially assume the role of CEO on September 1. ## Apple Avoids Large AI Capital Expenditures As Apple gradually achieves in-house development of chips for all its products, including iPhone, Mac, and AirPods, the combination of Ternus and Srouji is indeed powerful. The two executives stated in interviews in 2023 that this long-planned strategy allows Apple to closely integrate hardware and software, develop specific functions it needs, while avoiding unnecessary waste of valuable computing power. A deep analysis of Apple's capital expenditure structure reveals that the management philosophy during Cook's era tends to reward shareholders through extreme supply chain management and a high-profit service ecosystem (AppleCare, iCloud, App Store revenue sharing). This has taken a distinctly different path compared to its Silicon Valley peers. So far, Apple's strategy in the field of artificial intelligence mainly reflects the avoidance of massive capital expenditures; in contrast, giants like Microsoft (MSFT.US), Google (GOOGL.US), Amazon (AMZN.US), and Meta (META.US) collectively invest hundreds of billions of dollars annually in capital expenditures to build new data centers and equip them with expensive AI chips. In the critical area of developing foundational AI models, Apple has also chosen to delay in-house development and instead rely on Google's Gemini model to provide cloud support for its AI functions—this includes the highly anticipated major upgrade of Siri, which is expected to be officially launched later this year after delays. Srouji stated at the time: "Because we do not sell chips externally, we focus on the product itself, which allows us the freedom to optimize." Moreover, this scalable architecture enables us to reuse components across different products. In December last year, Srouji denied rumors about his plans to leave, as several other executives had left one after another. His new position highlights Apple's emphasis on its chip strategy, which will become increasingly important as the application of artificial intelligence on devices becomes more widespread. Under Srouji's leadership, Apple has begun to develop more types of chips in-house, reducing its reliance on external suppliers like Intel (INTC.US), Qualcomm (QCOM.US), and Broadcom (AVGO.US). Although Ternus has been seen as a strong candidate to succeed Cook (who turned 65 last November) for months, many analysts believe that signing Srouji is equally crucial. Analysts at Oppenheimer wrote in a report on Tuesday: "We believe that appointing Srouji as the newly established Chief Hardware Officer is Apple's most proactive move to date." Apple has not only retained a world-class chip designer but has also ensured that its chip/hardware/software integration strategy is preserved and strengthened. After working at Intel and IBM, Srugy joined Apple in 2008, less than a year before Apple launched its first iPhone equipped with a Samsung core processor. A month after Srugy joined Apple, the company acquired the chip startup P.A. Semiconductor for $278 million, marking the beginning of its custom chip development journey. In 2010, Srugy and his team launched Apple's first custom processor for the iPhone. Today, custom chips have become one of the hottest trends in the tech industry, with companies like Google, Amazon, Meta, Microsoft, and Tesla (TSLA.US) turning to self-developed artificial intelligence chips to reduce reliance on Nvidia's (NVDA.US) scarce and expensive graphics processors. In terms of cloud workloads, Apple relies on Google's Tensor Processing Units (TPUs) rather than Nvidia's chips. ## Betting on Self-Developed Chips In a 2023 interview, Turnas stated that during his more than twenty years at Apple, "the most profound change at Apple" is that "we are now able to develop so much technology in-house, with chips being the most important, of course." Turnas said, "We have always had an outstanding design team and created these beautiful products, but they were limited by existing resources." Under Cook's leadership in the later years, one of Apple's most important supply chain initiatives has been to begin shifting production to the United States. All major tech giants primarily produce chips at TSMC's (TSM.US) factories in Asia and the newly built factory in Arizona. Nvidia recently surpassed Apple to become TSMC's largest customer. Apple's increasingly strong chip capabilities include significant investments in TSMC's Arizona factory and two new factories built by Texas Instruments (TXN.US) in the U.S. As part of a $600 billion U.S. investment plan by 2029, Apple stated last August that it is "leading the construction of an end-to-end chip supply chain in the U.S." Apple executives stated in a 2023 interview that its chip team has grown to thousands of engineers working in chip labs around the world, including in Israel, Germany, Austria, the UK, Japan, and the U.S. Although Apple has not yet produced data center chips for running AI workloads in the cloud, some analysts predict that Apple may collaborate with Broadcom to develop server chips as early as this year. So far, Apple has focused almost entirely on AI capabilities on end devices, with the company stating that this strategy provides top-notch security and privacy protection for users and their data. "Their goal is to continue being the best platform for running AI software, and everyone testing or running AI programs on Apple chips agrees that Apple chips are the best," said Ben Bajarin, CEO of Creative Strategies Apple's key self-developed chips include the M series processors for Mac (which replaced Intel processors starting in 2020) and the core A series chips for iPhone. Both of these chips are referred to as system-on-chip (SoC). The latest A19 and M5 series chips, released by Apple in 2025, are equipped with neural network accelerators for running artificial intelligence programs on devices. Srouji stated in 2023 that Apple has an advantage in the field of artificial intelligence because "we have chips, hardware, software, and machine learning, all concentrated in one team." The company indicated that they have built neural accelerators into each GPU core, allowing developers to switch between different tasks more quickly. Apple released its initial artificial intelligence neural network engine in 2017. In terms of modems, Apple began to reduce its reliance on Qualcomm in 2019 when it spent $1 billion to acquire most of Intel's modem business, following a settlement with Qualcomm over a series of lawsuits. Apple quietly launched its first iPhone modem, the C1, in early 2025 and is expected to introduce the C1X in the iPhone 18 in September. Bajarin predicts that by the end of next year, all iPhone modems will be produced in-house by Apple. Bajarin stated, "Even if they can never catch up to Qualcomm in performance, I don't think it will make much difference even in the Pro phones. I think it just needs to work well within your coverage area, be fast enough, and not drain the battery." ## Integration Under Srouji's Leadership In September of last year, Apple released its self-developed iPhone wireless chip, the N1, replacing Broadcom's chip. For nearly a decade, the networking chips in AirPods and Apple Watch have been developed in-house by Apple. Nevertheless, Apple will continue to rely on external vendors for a large number of small chips. It obtains key processor architecture licenses from Arm Holdings (ARM.US) and other technology licenses from companies like Broadcom and Qualcomm. It relies on Samsung for memory and analog chips from manufacturers like Texas Instruments. Srouji stated in an email to Apple employees on Monday that he will integrate hardware development into a unified department, rather than dividing it into engineering and technology departments as it is now. Srouji mentioned that he will organize the hardware department into five teams: hardware engineering, chips, advanced technology, platform architecture, and project management. Tim Miller, appointed to lead Apple's platform architecture, stated in an interview last September that self-developed chips are where the "magic lies." "When we have control, we can do things that simply purchasing commercial chips cannot achieve," he said. For Apple, as senior personnel changes occur, Wall Street is questioning its artificial intelligence strategy and whether focusing on devices rather than cloud computing is the right choice. The company's stock price has fallen 2% this year, performing the worst among all major tech giants except for Microsoft and Tesla The media interview with Turner and Sloughy took place in December 2023, about a year after OpenAI released ChatGPT, which initiated the boom in generative artificial intelligence. At that time, when asked about concerns regarding Apple's apparent lag in the field of artificial intelligence, Sloughy stated, "I don't think we're behind." Turner added with a smile that he "isn't too worried." ### Related Stocks - [AAPL.US](https://longbridge.com/en/quote/AAPL.US.md) - [SOXX.US](https://longbridge.com/en/quote/SOXX.US.md) - [SMH.US](https://longbridge.com/en/quote/SMH.US.md) - [SOXL.US](https://longbridge.com/en/quote/SOXL.US.md) - [AAPX.US](https://longbridge.com/en/quote/AAPX.US.md) - [AAPU.US](https://longbridge.com/en/quote/AAPU.US.md) - [AAPB.US](https://longbridge.com/en/quote/AAPB.US.md) - [MSFT.US](https://longbridge.com/en/quote/MSFT.US.md) - [GOOGL.US](https://longbridge.com/en/quote/GOOGL.US.md) - [AMZN.US](https://longbridge.com/en/quote/AMZN.US.md) - [META.US](https://longbridge.com/en/quote/META.US.md) - [INTC.US](https://longbridge.com/en/quote/INTC.US.md) - [QCOM.US](https://longbridge.com/en/quote/QCOM.US.md) - [AVGO.US](https://longbridge.com/en/quote/AVGO.US.md) - [IBM.US](https://longbridge.com/en/quote/IBM.US.md) - [SSNGY.US](https://longbridge.com/en/quote/SSNGY.US.md) - [TSLA.US](https://longbridge.com/en/quote/TSLA.US.md) - [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md) - [TSM.US](https://longbridge.com/en/quote/TSM.US.md) - [TXN.US](https://longbridge.com/en/quote/TXN.US.md) - [ARM.US](https://longbridge.com/en/quote/ARM.US.md) - [OpenAI.NA](https://longbridge.com/en/quote/OpenAI.NA.md) - [GOOG.US](https://longbridge.com/en/quote/GOOG.US.md) - [SMSN.UK](https://longbridge.com/en/quote/SMSN.UK.md) - [NVD.DE](https://longbridge.com/en/quote/NVD.DE.md) ## Related News & Research - [Dear Apple Stock Fans, Mark Your Calendars for April 30](https://longbridge.com/en/news/283372537.md) - [Apple Pulled Cal AI for Deceptive Billing Design, Not External Payments](https://longbridge.com/en/news/283550760.md) - [What AI bubble? 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