What made PC big in the first place was compatibility between vendors. I don't think any of those companies will be sacrificing the compatibility anytime soon. Even if Microsoft was to release a vertically integrated product it would be more like Intel's NUC and Ultrabook branding, a guideline for OEMs on how to build good systems. Similarly Microsoft hasn't gone into war with Lenovo, Dell, HP and Asus by selling Surface laptops.

Why is vertical integration necessary for making faster chips?

No reason Microsoft wouldn't port to a new ARM variant from e.g. nVidia, or some other RISC.

The argument is an economic one - if all you are doing is selling a chip, and competing with others selling chips, you only can capture the margin on the chip. A vertically integrated vendor can capture margins across the whole product bundle and do things like charge $200 for 8gb of ram. That extra margin makes it possible to sustain low to no margins on the actual cpu, and you can afford to make much bigger chips at a more advanced process node.

It also makes it easy to add specialized accelerators and processor instructions that you can then build support for in the operating system you ship.

And yet Intel (and at various times AMD) has been extremely profitable, and not hesitant to spend billions on R&D. If you have a performance advantage you've moved out of the commodity space. I've no doubt Apple could sell billions of M1 chips if it wanted, with considerable profit (huge margins even after design costs), but it won't because it can use them to differentiate (and not just to sell overpriced RAM). (And because for decades Apple has suffered from press about its chips being slower than competitors'.)

There is no processor feature of a modern CPU that doesn't give advantage to all the operating systems that use it. VT-x virtualisation, AVX, AES-NI, ARM Neon: all are used by MacOS, Linux and Windows.

TEEs (SGX+MEE/TrustZone/SEV, Google Titan, Apple T2) serve similar purposes and have similar flaws (like permanent exploits) and trade-offs (same CPU -> side channels, uarch complexity problems, different CPU -> cost; separate chip -> heterogeneity, cost). It seems like the Titan/T2 approach leads to higher security, but I'm not sure that is settled yet. A new arch like RISC-V could do better (though it doesn't look like RISC-V will do that). I would love to see hardware support for micro/nano kernels, but that seems as far away as ever.

Obviously it is good to have a guaranteed client for your chips, but I can't see it stopping Intel if shoestring outfits can build something like RISC-V.

The M1 chip is a good example of where vertical integration is helpful. My understanding is that apple spent considerable effort on baking into silicon the ability to do some common memory-management related OSX/iOS low-level operations. For a chip vendor that sells to a broader market, this is probably not worth the effort. That said, there are, of course, also downsides to stronger vertical integration.

> My understanding is that apple spent considerable effort on baking into silicon the ability to do some common memory-management related OSX/iOS low-level operations.

I think they profiled these operations easily and made sure that they were cheap to execute on their CPU but I'm not certain there's dedicated silicon for that.

Additionally, I can't think of anything that would be useful for MacOS (Mach related or not) that wouldn't also help other operating systems.

It's difficult to switch IAs without the cooperation of OS vendor, device driver authors, and ideally app developers.

It's probably easier to achieve that coordination when there's a vertical integrator who can strong-arm everyone to make that migration.

Moving faster.