# Episode 2: The Business of Going Vertical

- Show: [The Circuit](https://hardwarepodcasts.com/podcast/the-circuit)
- Published: 2022-12-28
- Length: 33m
- Episode: 2
- Page: https://hardwarepodcasts.com/podcast/the-circuit/2022-12-28-episode-2-the-business-of-going-vertical
- Listen: https://share.transistor.fm/s/b7e1ff6f

## Summary

Ben Bajarin and Jay Goldberg discuss the strategic drivers behind technology companies like Apple, Google, and Amazon designing their own silicon, arguing that vertical integration is driven by competitive advantage and roadmap control rather than simple cost savings. They highlight how semiconductor giants like Broadcom, AMD, and MediaTek are responding by offering semi-custom services to retain these high-value customers, while noting that Chinese automotive companies are aggressively pursuing in-house chip design for autonomy due to US sanctions. The conversation explores the shift from commodity merchant silicon to specialized, high-ASP custom chips, emphasizing the role of software-defined hardware and the democratization of chip design tools.

## Chapters

- [0:01](https://hardwarepodcasts.com/podcast/the-circuit/2022-12-28-episode-2-the-business-of-going-vertical#t=1) Introduction: The Trend of Semiconductor Verticalization
- [2:04](https://hardwarepodcasts.com/podcast/the-circuit/2022-12-28-episode-2-the-business-of-going-vertical#t=124) Historical Context: Consolidation and the Return to In-House Design
- [5:37](https://hardwarepodcasts.com/podcast/the-circuit/2022-12-28-episode-2-the-business-of-going-vertical#t=337) Apple's M1: Strategic Advantage Over Cost Savings
- [8:49](https://hardwarepodcasts.com/podcast/the-circuit/2022-12-28-episode-2-the-business-of-going-vertical#t=529) Moore's Law Slowdown and the Rise of Specialized ASICs
- [13:23](https://hardwarepodcasts.com/podcast/the-circuit/2022-12-28-episode-2-the-business-of-going-vertical#t=803) Semiconductor Giants Responding with Semi-Custom Services
- [17:37](https://hardwarepodcasts.com/podcast/the-circuit/2022-12-28-episode-2-the-business-of-going-vertical#t=1057) Non-Tech Companies Entering Silicon Design: John Deere and TP-Link
- [20:44](https://hardwarepodcasts.com/podcast/the-circuit/2022-12-28-episode-2-the-business-of-going-vertical#t=1244) The Business Model Shift: Services and Software Integration
- [24:32](https://hardwarepodcasts.com/podcast/the-circuit/2022-12-28-episode-2-the-business-of-going-vertical#t=1472) Controlling the Roadmap and Vendor Relationships
- [25:59](https://hardwarepodcasts.com/podcast/the-circuit/2022-12-28-episode-2-the-business-of-going-vertical#t=1559) China's National Strategy and Automotive Chip Independence
- [30:02](https://hardwarepodcasts.com/podcast/the-circuit/2022-12-28-episode-2-the-business-of-going-vertical#t=1802) US Defense Sector and the CHIPS Act Implications
- [32:17](https://hardwarepodcasts.com/podcast/the-circuit/2022-12-28-episode-2-the-business-of-going-vertical#t=1937) Future Vertical Integration: Automotive and Innovation Leaders

## Topics

- [Chips, FPGAs & semiconductors](https://hardwarepodcasts.com/topic/chips-and-fpgas)
- [Pricing, margins & unit economics](https://hardwarepodcasts.com/topic/pricing-and-unit-economics)
- [Policy, trade & tariffs](https://hardwarepodcasts.com/topic/policy-trade-and-tariffs)
- [Manufacturing partners & offshoring](https://hardwarepodcasts.com/topic/manufacturing-partners)
- [Microcontrollers & dev platforms](https://hardwarepodcasts.com/topic/microcontrollers-and-platforms)

## Most relevant to

large enterprises

## Mentioned

- Apple (company)
- Google (company)
- Broadcom (company)
- AMD (company)
- MediaTek (company)
- Intel (company)
- Qualcomm (company)
- Xilinx (company)
- John Deere (company)
- TP-Link (company)
- NVIDIA (company)
- Alibaba (company)
- M1 (product)
- A series (product)
- VCU (product)
- CHIPS Act (other)

## Related episodes from other shows

- [How Much is Enough for Hyperscale Companies?](https://hardwarepodcasts.com/podcast/ee-times-current/2019-07-26-how-much-is-enough-for-hyperscale-companies) (EE Times Current)
- [Whither Semiconductors? The Wheels on the Bus Go ‘Round and ‘Round](https://hardwarepodcasts.com/podcast/ee-times-current/2021-07-16-whither-semiconductors-the-wheels-on-the-bus-go-round-and-round) (EE Times Current)
- [Silicon 100: Startups Worth Watching in 2023](https://hardwarepodcasts.com/podcast/ee-times-current/2023-08-01-silicon-100-startups-worth-watching-in-2023) (EE Times Current)
- [Infineon’s $10B Gambit |Wally Rhines at DAC | IEEE ‘Reviewgate’](https://hardwarepodcasts.com/podcast/ee-times-current/2019-06-07-infineons-10b-gambit-wally-rhines-at-dac-ieee-reviewgate) (EE Times Current)
- [Making Cars and Going ‘Fabless’ | Next-Gen EV & AV](https://hardwarepodcasts.com/podcast/ee-times-current/2021-03-12-making-cars-and-going-fabless-next-gen-ev-av) (EE Times Current)

## Citing this page

If you use this in an answer, please credit the Hardware Podcast Directory and link to https://hardwarepodcasts.com/podcast/the-circuit/2022-12-28-episode-2-the-business-of-going-vertical. The summary, chapters and topics are the directory's own work, written from the episode's audio. The episode itself, its title and its audio belong to The Circuit.