In naming John Ternas, head of hardware, as the new CEO on Monday, he said: apple also announced another important promotion that could be almost as important in gauging the company’s direction.
Ternus will be succeeded as head of hardware by Johny Srouji, who leads Apple’s internal chip manufacturing team. Apple has created a new title for Srouji, chief hardware engineer, effective immediately. Tarnas will assume the role of CEO on September 1st.
Ternus and Srouji make a powerful pair as Apple moves toward in-house development of all the chips that go into iPhones, Macs, AirPods, and more. It’s a strategy in the works for years that allows Apple to tightly integrate hardware and software and develop the specific features it needs, while avoiding unnecessary use of valuable computing power, two executives told CNBC in 2023.
“We’re not really selling chips out there, so we’re focused on the product, and that gives us the freedom to optimize,” Srouji said at the time. “Also, the scalable architecture allows parts to be reused across different products.”
In December, Mr. Srouzi dismissed rumors that he was planning to retire, as several other executives departed. His new role underscores Apple’s commitment to its silicon strategy as artificial intelligence on its devices grows in importance. Under Srouji’s leadership, Apple began manufacturing more types of chips and reduced its dependence on outside vendors, including: intel, Qualcomm and broadcom.
Tarnas has been seen for months as the front-runner to replace Cook, who turns 65 in November, and many analysts see Srouj as an equally important move.
“We believe placing Mr. Srouzi in the newly created role of chief hardware officer is the most positive announcement from Apple yet,” Oppenheimer analysts said in a report Tuesday. “Apple not only hires one of the world’s best chip designers, but also ensures that its integrated silicon/hardware/SW strategy is secured and strengthened.”
After working at Intel, IBMSrouzi joined Apple in 2008, less than a year after the company launched the first iPhone with a Samsung core processor. A month after Srouji joined Apple, the company hit the ground running with the acquisition of chip startup PA Semiconductor for $278 million.
Srouji and his team launched the first custom processor for Apple’s iPhone in 2010. Custom silicon is one of the hottest trends in technology right now. google,Amazon, MetaMicrosoft, tesla Everyone is turning inward to reduce their dependence on AI chips. Nvidia’s A rare and expensive graphics processing unit.
When it comes to cloud workloads, Apple relies on Google’s tensor processing units (TPUs) rather than Nvidia’s chips.
“You’re limited by what’s available.”
In a 2023 interview with CNBC, Tarnas said that the “most significant change at Apple” in his more than 20 years at the company was that “we now do a lot of these technologies in-house, and of course at the top of that list is silicon.”
“We’ve always had a great design team and created these beautiful products, but we were constrained by what was available,” Ternas said.
One of the biggest initiatives in Apple’s supply chain during Cook’s later years was to start domestic manufacturing.
The tech giants all primarily manufacture their chips in the following locations: Taiwan Semiconductor Manufacturing Co., Ltd.manufacturing facilities in Asia, and at TSMC’s new facility in Arizona. Nvidia recently replaced Apple as TSMC’s biggest customer.
Apple’s increase in chip capabilities includes major manufacturing efforts at TSMC’s Arizona campus and Texas Instruments’ two new U.S. factories.
Apple said in August that it is “leading the way in building an end-to-end silicon supply chain in the U.S.” as part of its $600 billion investment commitment to the U.S. through 2029.
Apple executives told CNBC in 2023 that the company’s chip team has expanded to thousands of engineers working in chip labs around the world, including Israel, Germany, Austria, the United Kingdom, Japan and the United States.
Apple doesn’t currently make data center chips to run AI workloads in the cloud, but some analysts predict it could partner with Broadcom on server chips as early as this year.
So far, Apple has focused almost entirely on AI capabilities on end devices, an approach the company claims provides the best security and privacy for users and their data.
“Their goal is to continue to be the best place to run AI software, and everyone who tests or runs AI on Apple Silicon continues to say Apple Silicon is the best,” said Ben Bajarin, CEO of Creative Strategies.
Apple’s main in-house chips are the M-series processors for Macs, which have been replaced by Intel processors since 2020, and the A-series chips that are the heart of the iPhone. Both are known as system-on-chip (SoC). When Apple introduced its latest generation A19 and M5 in 2025, the devices included neural accelerators to power the AI.
Srouzi said in 2023 that Apple’s advantage in AI is because “we own the silicon, the hardware, the software, and the machine learning all in one team.”
The company says each GPU core has a built-in neural accelerator, allowing developers to switch between different tasks more quickly. Apple announced its own neural engine for AI in 2017.
When it comes to modems, Apple acquired most of Intel’s modem business for $1 billion in 2019 after settling a series of lawsuits with Qualcomm and began its exit from Qualcomm.
Apple quietly released its first iPhone modem, the C1, in early 2025 and announced the C1X with the iPhone 19 in September. Bajarin predicts that by the end of next year, all iPhone modems will be made by Apple.
“Even if we can’t catch up with Qualcomm in performance, I don’t think it’s a deal breaker even if it’s a Pro phone,” Bajarin said. “I think it needs to work well in your coverage area, be fast enough, and not drain your battery.”
Consolidated under Srouji
In September, Apple replaced Broadcom with its own wireless chip for the iPhone, called N1. The network chips in AirPods and Apple Watch have been made by Apple for nearly a decade.
Still, Apple will continue to rely on outside companies for many small chips. We license the following major processor architectures: arm holdingsand other technologies from Broadcom and Qualcomm. It relies on memory from Samsung and analog chips from manufacturers such as Texas Instruments.
Srouzi told Apple employees in an email on Monday that the company intends to bring hardware development under one umbrella, rather than separating it into engineering and technology. Srouji said the hardware will be organized into five teams: hardware engineering, silicon, advanced technology, platform architecture, and project management.
Tim Millett, the company’s new head of platform architecture, said in a September interview with CNBC that there is “magic” to the company’s chips.
“Once we have control, we can do things beyond what you can do by buying off-the-shelf silicon parts,” he said.
For Apple, the changes at the top come as Wall Street questions the company’s AI strategy and whether it’s making the right bet by focusing on devices rather than the cloud. The company’s stock price is down 2% this year, lagging all of its mega-sized peers except Microsoft and Tesla.
CNBC’s interview with Ternus and Srouji took place in December 2023, about a year after OpenAI released ChatGPT and the generative AI boom began.
When asked by CNBC at the time to respond to concerns that Apple seemed to be falling behind in AI, Srouzi said, “We don’t think so.”
Ternas added with a laugh: “I’m not too worried.”
WATCH: Apple talks about new iPhone chips and on-device AI plans
