Apple’s iPhone 15 Pro is expected to be the first and only smartphone powered by a 3 nanometer processor for a while. A new report by The Information explains how a previously undisclosed sweetheart deal between Apple and TSMC is helping bring the state-of-the-art A17 chip to market.
According to the report, Apple and the chip fab company have a special agreement that puts TSMC on the line for the cost of defects when producing the A17. TSMC is also exclusively manufacturing 3 nm chips for Apple during the first year or so of its new fab process.
This arrangement reportedly saves Apple billions of dollars on costs associated with working out the kinks of a new fab process. Meanwhile, TSMC earns enough from Apple as its largest customer that it makes financial sense to eat the cost of producing defective chips. In turn, TSMC is able to improve its 3 nm chip manufacturing process before opening orders to companies beyond Apple.
The Information adds that TSMC’s 3 nanometer chip fab process has seen yield rates between 70% and 80%. That means that as many as 1 in 5 chips manufactured with new process are defective, but Apple isn’t on the line for paying for the unusable goods.
In short, Apple’s status of being TSMC’s largest customer is helping the iPhone maker stay ahead of the competition while saving billions of dollars.
As for how far ahead of the competition Apple will be, the report calls out Intel as the only other customer with 3 nanometer chip business on the table next year for now.
Apple is expected to unveil the iPhone 15 and iPhone 15 Pro around September 13. Only the iPhone 15 Pro will feature the new A17 chip.
More
- A17 chip for iPhone 15 may focus more on battery life than power
- A17 chip – TSMC wanted price increase, Apple reportedly said no
- iPhone 15 Pro models will get A17 chip, others won’t
- What to expect from iPhone 15 Pro performance
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