3 Things to Expect From Apple Inc.'s A12 Chip

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This year, Apple (NASDAQ: AAPL) introduced three new iPhones, all of which are powered by the company's custom-designed A11 Bionic chip. The A11 Bionic is, as is usually the case, a wonderful chip, boasting best-in-class processor and graphics performance, integrated artificial intelligence acceleration, and all sorts of improvements to areas like the media engine, image signal processor, and more.

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It's just a beastly chip.

Although Apple almost certainly has a few unpredictable surprises in store for us when it unveils its next-generation chip, which I'll just refer to as the A12, here are three things that I expect to see from the A12 next year.

A 30% boost in CPU performance

With the A11 Bionic, Apple claimed that the high-performance CPU cores deliver up to 25% better performance than the high-performance cores in the prior-generation A10 Fusion.

I think that with the transition to Taiwan Semiconductor Manufacturing Company's (NYSE: TSM) 7nm technology for the A12 Bionic, Apple will enjoy a bigger manufacturing-related improvement than it did in moving to TSMC's 10nm technology for the A11 Bionic this year.

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Indeed, TSMC claims that its 10nm technology delivers approximately 15% higher speed than the prior-generation 16nm technology upon which the A10 Fusion was built. TSMC also claims that its 7nm technology delivers a roughly 20% speed boost compared to its 10nm technology.

So, with the combination of a bigger generational leap in manufacturing technology performance as well as continued cleverness from Apple's chip design teams, I expect no less than a 30% improvement in the high-performance CPU cores found on the chip.

Double the graphics performance

Next year, I expect all of the new iPhones to have very high display resolutions and, quite possibly, high refresh rates for the higher-end models.

Since Apple designs its chips specifically for the devices they're meant to power, I'd expect the company to be quite aggressive in improving the performance of the graphics processor embedded inside the A12.

Apple achieved a 30% increase with the A11 Bionic this year, which certainly wasn't bad, especially considering the A11 Bionic has Apple's very first custom-designed graphics processor, but I think that to deliver great user experience on next year's iPhones, Apple will need to roughly double the graphics performance of the A11 Bionic in the A12. 

The combination of the move to the 7nm manufacturing technology, a next-generation Apple graphics architecture, and more liberal use of silicon real estate should allow Apple to deliver such an improvement.

A smarter neural engine

One of the new technologies that Apple introduced in the A11 Bionic was what the company calls an Apple Neural Engine. This, Apple claims, is a piece of "specialized hardware built for a set of machine learning algorithms."

It's apparently a dual-core design that Apple says can perform 600 billion operations per second and is a critical part of Apple's Face ID biometric authentication system.

I expect Apple to quickly grow the capabilities of the Apple Neural Engine over time by both adding sheer computing power (I wouldn't be surprised to see the Neural Engine in the A12 capable of performing over a trillion calculations per second) as well as support for a wider range of algorithms to expand its utility across the iOS app ecosystem.

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Ashraf Eassa has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.