Intel shares down 4.6% after Apple announces switch to in-house chips for Mac Pro.

Shares of Intel Corporation (NASDAQ: INTC) dropped after Apple (NASDAQ: AAPL) announced that its new Mac Pro will be using M2 Ultra, a new chip built by the company itself. Apple stated that the M2 Ultra is three times faster than the fastest Mac Pro computer with an Intel chip. INTC saw a nearly 5% decrease in its shares on the day and closed at $29.86.

Apple announced that the new Mac Pro will have up to 192GB and will start at $6,999. Apple also revealed the Mac Studio and the Mac Pro, referring to both products as the “two most powerful Macs ever made.” Apple also stated that the Mac Pro “completes the Mac transition to Apple silicon”. Apple first launched its own chip, the M1, in 2020 to much success.

Apple announced that the new Mac Pro computer will start at $6,999.

Intel Struggles Outside of Mac Pro and Mac Studio Transition to In-House Silicon

Intel may continue to see a decline in its shares following Apple’s transition to its own chips. The company will have to work harder to gain a significant market share while competing with rival semiconductor company AMD (NASDAQ: AMD). AMD’s chips have been crucial to data centers and personal computers. In addition to AMD, Intel also has competition from Nvidia (NASDAQ: NVDA). Since the rise of AI, Nvidia has gained ground as its chips are in high demand for AI services.

Intel’s numbers have also not been impressive. In April, the company reported its figures for Q1 2023, which showed the largest quarterly loss in the company’s history. The Q1 results also showed that Intel saw its second consecutive quarter of losses. Additionally, the first quarter marked Intel’s fifth straight quarter of reduced sales.

According to the report, Intel’s quarterly revenue fell to $11.7 billion, a 36% year-over-year (YoY) decrease. Furthermore, the company suffered a 133% annual earnings per share reduction. GAAP loss per share was recorded as $0.66, with non-GAAP loss per share at $0.04.

Intel also discontinued its line of Bitcoin mining chips. A year after announcing the Blocksale application-specific integrated circuit (ASIC), Intel announced in April that it would stop taking orders in October. Intel also estimates that it will ship the last Blocksale ASIC by April 20, 2024. According to a spokesperson quoted in a Reuters report, Intel ended the Blocksale 1000 Series ASIC line to prioritize IDM 2.0. The company’s IDM 2.0 strategy is to outsource chip-making while focusing on smaller and faster options.

Apple Completely Moves Away from Intel

An official Apple press release announcing the Mac Studio and the Mac Pro describes the computers’ respective M2 Max and M2 Ultra chips. Apple said the M2 Max chip is “up to 6x faster than the most powerful Intel-based 27-inch iMac,” while also touting the Mac Pro’s speed.

The Mac Studio is much cheaper than the Mac Pro, starting at $1,999.

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