Apple’s once dominant position as a TSMC customer is facing fresh challenges as the AI boom raises GPU demand from companies like NVIDIA and AMD, according to a new report.
New report covers Apple and TSMC’s evolving relationship
When CC Wei visited Cupertino last August, he had bad news for his largest client. Apple would need to acquiesce to the largest price rise in years, TSMC’s CEO told its executives.
Tim Cook and his team took the news on the chin. Wei had been telegraphing hikes in earnings calls over the past few quarters, and the Taiwanese chip maker’s rising gross margins were testament to its increasing pricing power.
That wasn’t the worst news, my sources tell me.
Apple, which once held a dominant position on TSMC’s customer list, now needs to fight for production capacity. With the continuing AI boom, and each GPU from clients like Nvidia and AMD taking up a larger footprint per wafer, the iPhone maker’s chip designs are no longer guaranteed a place among TSMC’s almost two dozen fabs.
What Wei probably didn’t tell Cook is that Apple may no longer be his largest client.
Apple and TSMC have had a long, mutually fruitful partnership. But it’s no surprise that the AI boom is having a big impact on their evolving relationship.
We’ve seen reports before that hinted changes were coming.
Top comment by Fernan
It seems that TSMC / Samsung / Micron, etc... can't produce chip or ram in enough quantities nor fast enough to satisfy market demands. I wonder how much longer this will last.
There was a China Times report last fall that indicated the iPhone’s forthcoming A20 chip would be significantly more expensive for Apple due to TSMC price hikes.
We’ve also seen multiple reports about Apple and Intel exploring a renewed partnership to produce both Mac and iPhone-class chips. Though no one expects Apple to abandon TSMC entirely, the rumors imply that Apple now has a greater need for supply chain diversification than it did before.
What impact will these changes have on consumers? It’s hard to say. But if the iPhone 18 line ends up being more expensive than its predecessors, we might have a good idea of why.
What are your takeaways from this report on Apple and TSMC’s relationship? Let us know in the comments.
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