Apple (NASDAQ:AAPL) has introduced its M3 lineup, a series of chips manufactured using Taiwan Semiconductor Manufacturing Co.'s (TSMC) N3 process technology. The M3 family, which includes the M3 with 25 billion transistors, the M3 Pro with 37 billion transistors, and the M3 Max with 92 billion transistors, caters to a range of computing needs from mainstream desktops to high-end tablets and laptops, performance-mainstream machines, and entry-level workstations. The M3 chips incorporate a unique GPU architecture that supports hardware-accelerated ray tracing and mesh shaders, are built on an Arm instruction set architecture, integrate a new multimedia engine, and feature an AI NPU.
The M3 Max is noted for its complexity, rivaling AMD (NASDAQ:AMD)'s Phoenix as the most complex single-die processor. Apple's adoption of TSMC's N3 fabrication process has led to increased economic efficiency, with around 415 M3 dies fitting on a single 300-mm wafer. This equates to a die size of approximately 146 mm^2, according to @Frederic_Orange.
This week, Jay Goldberg revealed on Digits to Dollars that the design and tape-out costs for the M3 series reached nearly $1 billion. This significant investment is reflected in Apple's $26.251 billion R&D budget allocation in 2022 for chip design. The tech giant also contributed $3.1 billion to TSMC's 3nm revenue and paid $20,000 per wafer without any special agreement or preferential treatment.
Despite the high costs associated with TSMC's 3nm process, Apple has chosen to use it for its latest MacBook Pro models featuring the A17 Pro chipset. This decision may be due to Apple's financial capabilities, as the high costs of the 3nm N3B process have led other companies, such as Qualcomm (NASDAQ:QCOM) and MediaTek, to favor the less expensive N3E node.
Apple's investment in cutting-edge technology comes even though TSMC's 3nm yield is around 55 percent. The base M3 MacBook Pro with 8GB unified RAM and non-upgradeable storage is priced at $1,599, while the fully-unlocked M3 Max with a 16-core CPU and 40-core GPU carries a $500 premium.
InvestingPro Insights
Apple's aggressive investment in the development of the M3 lineup is reflected in the InvestingPro data and tips. The company has a hefty market cap of 2740.0B USD and a P/E Ratio of 28.59 as of Q3 2023. Despite a slight decline in revenue growth of -0.93% over the last twelve months, Apple's gross profit margin remains strong at 43.45%.
This financial strength is echoed in the InvestingPro Tips. Management's aggressive share buyback strategy is complemented by a high return on invested capital. The company has also maintained its dividend payments for 12 consecutive years, a testament to its robust earnings.
InvestingPro offers many more tips and insights for Apple and other companies. This data can help investors make informed decisions about their portfolios. For instance, Apple's high return on assets and the prediction of profitability this year are encouraging indicators for potential investors. The InvestingPro platform provides countless more tips, making it a valuable resource for those looking to invest in the tech industry.
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