Why is Apple bothering with the ARM A5 chip?

As the Tame Apple Press (TAP) reports about the tear downs which are being carried out on the new iPad 2, they rush to praise Apple’s A5 chip.

However one thing that Apple Insider has spotted is that the new A5 processor is jolly expensive.

The chip is made by Samsung and it has the new 46nm Low Power DDR2 memory. It also has a variable clock speed and costs about $25. Nvidia’s Tegra 2 is nearly $10 cheaper than that.

While the chip cost is not the biggest part of the Apple tear down bill it does beg the question, why is Apple bothering to make its own chip for $25 when it could buy the thing off the shelf for $15?

Obviously if Jobs guarantees production to Samsung, or TSMC, and the A5 will be used in all Apple products it will bring down the cost a bit. In fact there are rumours that Jobs’ Mob is working with TSMC anyway. However the A5 that is under the bonnet is made by Samsung using its 45nm process, said Apple Insider.

There is no doubt that the A5 is an improvement on what has gone before, but it is pretty much on a par with what is already available in the industry. Both it and the Tegra are based on the same ARM  A9 technology.

The A5 does seem to have some controller technology which sometimes slows down the chip speed for power reasons, but really it is not that significant.

It would appear that Jobs has insisted that Apple develop the A5 in-house with no clear business reasons to do so. He could have popped around to Nvidia and bought the whole thing for less and not had to worry about the administrative headache.

True, him and Nvidia have not been the best of chums, but for $5 a machine at least he would have had nothing to lose. If he was doing a deal that big with the Green Goblin he might have got a hefty discount.

The only reason we can think of is that he wanted more control over his suppliers, even if it cost him a bit extra. If you have your own chip you can tell people how to make it. Telling Nvida something like that would always be tricky.

However an extra $5 is a heavy price for what is usually only a technical amount of control.