Apple’s In-House Server Chips Reportedly Entering Mass Production In H2 2026, But The Company Is Expected To Face Two Short-Term Challenges With AI Development
Jan 13, 2026
The Apple Silicon transition isn’t just stopping at mass-producing workstation-based chipsets, because the technology giant is said to be working on a new chip codenamed ‘Baltra,’ with its primary function focused on AI inference. Now, according to one analyst, the Cupertino firm will commence the mass production of these in-house server chips in the second half of 2026.
This update arrives shortly after it was reported that Apple had entered into an agreement with Google to leverage its Gemini model for the revamped version of Siri. The development of these in-house server SoCs has been talked about for a couple of years, with the same analyst pointing out two challenges for the iPhone maker concerning its AI development roadmap. In short, artificial intelligence is expected to become a pivotal element of hardware and software, with the technology titan severely missing out at this time.
The proper rollout of Apple Intelligence in on-device AI form could arrive from 2027 onward
Similar to how Apple maintained its relationship with Qualcomm until it had a potent 5G solution that eventually found its way into the iPhone 16e, the company has established a similar tag-team with Google, until it is successful in launching its own Large Language Model. According to TF International Securities analyst Ming-Chi Kuo, Apple is facing two short-term challenges in its in-house AI development quest.
Even if the company fulfills its past promises around Apple Intelligence and offering a revamped Siri, it may not be sufficient, as there is a need to deliver a more capable on-device AI model. Of course, as witnessed by surging sales of the iPhone 17 lineup, which resulted in Apple surpassing Samsung to become the number one smartphone brand for 2025 with a 10 percent shipment growth, Kuo notes that on-device AI isn’t expected to drive shipments in the near term.
However, Google’s partnership with Apple will only relieve pressure for a small period, and it is only a matter of time before AI ‘becomes central to hardware, the OS and the overall user experience.’ Kuo also states that long-term, Apple continues to face the challenge of gaining stronger control over its core AI technologies. Fortunately, the development of in-house server chips can eliminate various bottlenecks, as Apple has proven that its custom silicon delivers sufficient firepower and flaunts impressive memory bandwidth, both of which are crucial for AI processing.
Best of all, these in-house server chips can operate at practically half the power, as demonstrated by the top-tier M3 Ultra, which consumes 55 percent less juice compared to x86 processors when running HandBrake. Kuo also predicts that, while mass production of Apple’s in-house server chips will commence in H2 2026, the proper rollout of on-device AI could grow more meaningfully from 2027 onward.
