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My Other Car Is a Mac

Speed Indicator Device

Moore’s law, the rule saying that the number of transistors on a chip doubles every two years, has been expected to crash against the laws of physics for some time. There’s just no easy way to make chips any smaller than they already are.  

Time to try the hard way then. This month Apple announced new MacBooks with its own M1 chips claiming to offer almost double the performance (1.7 times more) at 70% less power than comparable Intel chips its previous models used. This is such a feat of engineering that it shocked even the Microsoft Windows chief at the time of the “Mac vs. PC” ads: 

One Small Beam of Light, One Giant Leap for Projectors

One technical reason for the improvement is that Apple’s M1 chips internals are 5 nanometers (nm), or 5 billionths of a meter in width. In comparison, older MacBook models used 14nm chips. The process to make things as little as 5 nanometers is a little absurd. It’s called extreme ultraviolet (EUV) lithography and to call it “a kind of printing” is correct but doesn’t help you understand it at all.  

Only one company in the world makes EUV systems: ASML of the Netherlands. The company was founded in 1984 and delivered its first prototype machines 22 years later in 2006 (talk about the virtues of patience). ASML committed to EUV technology after listing their shares in New York in 1995, much earlier than their clients, like chip manufacturer TMSC which adopted EUV in 2018.          

As we gather, lasers alone are too imprecise to print the tiny features of a 5nm chip. Instead, an EUV lithographer like the ones at a TMSC factory projects laser light against molten tin droplets 50,000 times per second to achieve the desired 13.5nm frequency, closer to X-rays than light. Super fine Zeiss mirrors can then further reduce printing to as little as 1.5nm. TMSC has already announced plans for 3nm chips.  

The Twinscan NXE:3400C EUV lithography system 

All very impressive, you say, but why go to all that trouble for the tiny print? Answer: TSMC, ASML, and Apple are all printing money. TMSC grew nearly 20% year over year in the last quarter, ASML had 52% gross margin in the last quarter while growing 33% year over year, and Apple’s earnings grew 70% year over year in the latest quarter, a record for the company.  

Not that they haven’t earned it. Apple announced its first laptop, the PowerBook, 30 years to the week of its latest MacBook announcement. The PowerBook used custom chips by Motorola, which Apple was forced to change for standard Intel chips to catch up to the competition when it had no money for its own chip development. They can do the M1 now because of all their experience (and profits) making cutting-edge iPhone chips, which you guessed it, today are also 5nm. 

The Cheapest Chips 

Compare that to carmakers, which use chips ranging from 45 to 90 nanometers in entertainment and safety systems in cars. These are the cheapest chips in production today. Even when a new MacBook is $2,500 and a new car is $25,000, if you are a chip manufacturer like TSMC, Intel, or Samsung, you make a bigger profit working for Apple than for Volkswagen. That’s why the chip shortage has hit the auto industry hardest.    

Still, supply chain problems are behind a rare warning on Apple future sales. Like other advanced technologies, chip making is a politically sensitive industry. Perhaps that is why TMSC has said that they are ramping up production of the kind of chips automakers use. In any case, it seems supply and demand laws are better at forecasting microchip progress than the laws of physics.