How Apple Built a Chip Powerhouse to Threaten Qualcomm and Intel

For several years, Apple has been steadily designing more and more of the chips powering its iPhones, iPads, Macs and Apple Watches. This creates a better user experience and helps trump rivals. Recently the company got a fresh incentive to go all-in on silicon: revelations that microprocessors with components designed by Intel Corp., Arm Holdings Plc and Advanced Micro Devices, Inc. are vulnerable to hacking.

Steve Jobs long believed Apple should own the technologies inside its products rather than rely on mashups of components from other chip makers, including Samsung, Intel and Imagination Technologies. In 2008, the company made a small but significant step in that direction by acquiring boutique chip maker P.A. Semi. Two years later, Jobs unveiled the iPad. The world focused on the tablet’s giant touchscreen, book-reading prowess and creativity apps. But the most ground-breaking technology was hidden away inside: the A4, Apple’s first processor designed in-house.