Apple May Break a 12-Year Chip Strategy

[MacRumors]

TSMC has been the exclusive supplier of Apple's systems-on-a-chip since 2014, but that 12-year streak could be nearing its end.

According to The Wall Street Journal, Apple is exploring whether some of its lower-end processors could be manufactured by a company other than TSMC.

"Now that TSMC is doing more business with Nvidia and other AI companies, people with knowledge of the chip supply chain said Apple was exploring whether some lower-end processors could be made by someone other than TSMC," the report said.

The report did not mention any candidates, but previous rumors have indicated that Intel could begin supplying some lower-end Apple processors in 2027 or 2028.

A few months ago, GF Securities analyst Jeff Pu said that he expected Intel to reach a chip supply deal with Apple for at least some non-pro iPhone models starting in 2028. Based on that timeframe, Intel could supply Apple with at least a portion of A21 or A22 chips for future iPhone models, if the companies agree to a partnership.

Apple's return to Intel might also involve some Mac and iPad chips. Last year, Tianfeng Securities analyst Ming-Chi Kuo said he expected Intel to begin shipping Apple's lowest-end M-series chip for select Mac and iPad models as early as mid-2027. For this, Kuo said Apple planned to utilize Intel's 18A process. He did not mention the iPhone.

There is no indication that Intel would play a role in designing the iPhone chips, with its involvement expected to be strictly limited to fabrication. That would differ from the era of Intel Macs, which used Intel-designed processors with x86 architecture. Apple began transitioning away from Intel processors in Macs in 2020.

Intel would help Apple diversify its supply chain, which could come at a pivotal time, as Nvidia has reportedly surpassed Apple as TSMC's largest customer amid rising competition for NAND memory and RAM chip supply for AI servers.

TSMC is not the only chip supplier seeing increased demand amid the AI server boom, as Samsung and SK Hynix have both gained enough leverage to demand Apple pay more for RAM chips, according to The Wall Street Journal's supply chain sources.

On an earnings call last week, Apple CEO Tim Cook said that rising memory chip prices had a "minimal impact" on Apple's gross margin last quarter, but he does expect a "bit more of an impact" on the company's gross margin in the current quarter. He said Apple "will look at a range of options to deal with that" as necessary.

Apple analyst Ming-Chi Kuo does not expect price increases for the iPhone 18 lineup.

Apple reported record-breaking revenue of $143.8 billion last quarter, up 16% year-over-year, and it is predicting similar 13% to 16% year-over-year growth and gross margin of 48% to 49% in the current quarter, so the company is still reporting impressive earnings results despite concerns surrounding memory chip prices.

Article Link: Apple May Break a 12-Year Chip Strategy

 

[Andres Cantu]

As long as they go to different iPhone tiers, otherwise we’d see another situation like with the A9 chips and hoping you got the one you wanted, as minimal as the real-world differences would be 😆

 

[AF_APPLETALK]

Really great to see some diversity in the fab process coming.

 

[JPack]

It's gonna be Intel and it'll be the base model chips. Apple will pay for some loss in power efficiency but will get the threat of tariffs off their back.

 

[Quasselstripper]

Not gonna buy these. Intel Macs were the worst. Many probably don’t remember it but they were running hot af and battery life was ****

 

[reyesmac]

When its time for the bulk of users to update from M1 they will have great years.

 

[lapstags]

time to buy intel stock

 

[TheDailyApple]

When its time for the bulk of users to update from M1 they will have great years.

I hope that time is still a few years off at least. I’m still rocking my M1 Max MBP and it shows few signs of age. Definitely the best computer I’ve owned.

Hoping for a snow leopard-like release in the next couple of years to maybe keep it on for the rest of its life.

 

[SnowPenguin]

Make Apple Intel Again.

Until they come out & we get to know how they perform, I don't want to own any Apple device with Intel Inside.

 

[senttoschool]

This is because the AI boom has led to TSMC running at 100% capacity for years now. There is no end in sight. Making chips for a Apple Watch or Mac Mini can't be more profitable than Nvidia selling chips for $50k each. Therefore, Nvidia is buying up all available TSMC wafers. Nvidia is set to become TSMC's biggest customer this year. Some say they already surpassed Apple last year.

So Apple has no choice but to use lower end nodes from Intel. It'll be a worse product than TSMC for sure. But Apple has no choice because of the AI boom.

 

[DreamyLucid]

Not gonna buy these. Intel Macs were the worst. Many probably don’t remember it but they were running hot af and battery life was ****

Apple is not going back to the Intel Mac

 

[zenmacx]

Giving the benefit of the doubt, time will reveal if this is good or bad.

 

[Andy_2341]

I wish this A.I. craze would go on and settle down. Or at least become more efficient. Why do these servers require so much silicon and ram? Can we not find a way to make more powerful, simple, efficient models that run well on current hardware instead of wrecking the market? This all seems really silly.

 

[coolfactor]

I want to see Apple have another "One More Thing" moment where they announce that they are building more of this stuff in-house using highly-efficient automated mini-factories.

Imagine walking into an Apple Store, ordering a custom-configured iPhone and having it assembled by robots for you on the spot?

 

[coolfactor]

I wish this A.I. craze would go on and settle down. Or at least become more efficient. Why do these servers require so much silicon and ram? Can we not find a way to make more powerful, simple, efficient models that run well on current hardware instead of wrecking the market? This all seems really silly.

That's happening. So much is happening that isn't in the mainstream news. Just follow a few A.I.-centric podcasts and you'll see it. One called "This Day in AI" by a couple of Australian brothers is fantastic! Another by NVIDIA does deep dives into the work that they are doing, which largely involves open-source (eg. open weight) models.

Lots of work is being done to explore the use of SLM (Small Language Models), combinations of purposeful models, etc.

Yes, it's crazy how the big A.I. labs are focusing on massive data centres, but that's only because they are going after the hungry click-happy consumer market in order to make money from advertising. But so much more is happening in parallel that will come to light this year.

 

[holmesf]

People need to look up Intel Panther Lake (based on latest 18A fab process node) and realize this isn’t 2021 anymore where Intel had been stuck on 14nm for 7 years while TSMC had moved into 5nm process. Intel’s latest process node is competitive with TSMC 3nm used in Apple chips today, and is no longer years behind it.

Sure, TSMC may still be a bit better than Intel, but they’re charging an arm and a leg for it. Apple is smart to diversify suppliers.

 

[Hillstones]

Not gonna buy these. Intel Macs were the worst. Many probably don’t remember it but they were running hot af and battery life was ****

Total BS. My Intel MacBook Pro (2015) does not run hot af, and I get over 7 hours of battery life (yes, Apple replaced the battery under a recall). My 2019 MacBook Pro does not run hot af either, and it is on 8 hours a day. This person is not old enough to remember the PowerPC Macs, and the Intel Macs were far superior with longer battery life than PowerPC, and they ran cooler than PowerPC Macs. If this person actually read the article, they would know that Intel is a chip fabricator and they would be making Apple's A-chips for the iPhone, not using x86 chips in Macs. Maybe this guy should look at the 4 lb. heat sink in a Mac Studio to keep the Ultra chip cool. Or look at the Liquid Cooled Power Mac G5 if he thought Intel Macs ran hot.

 

[Hillstones]

It's gonna be Intel and it'll be the base model chips. Apple will pay for some loss in power efficiency but will get the threat of tariffs off their back.

Intel is a chip fabricator. They would be making the same A-chips per Apple's spec. No different than TSMC making the same chips. No loss in efficiency.

 

[JPack]

Intel is a chip fabricator. They would be making the same A-chips per Apple's spec. No different than TSMC making the same chips. No loss in efficiency.

If that were the case, Intel would have plenty of customers lining up for their fab services. So would Samsung. Both of them have no customers for good reasons. Their processes aren't as good as TSMC's.

Of course fab processes are different. If anyone can just buy equipment and run it with the same results, Apple would have done so on day one.

 

[Frantisekj]

This is because the AI boom has led to TSMC running at 100% capacity for years now. There is no end in sight. Making chips for a Apple Watch or Mac Mini can't be more profitable than Nvidia selling chips for $50k each. Therefore, Nvidia is buying up all available TSMC wafers. Nvidia is set to become TSMC's biggest customer this year. Some say they already surpassed Apple last year.

So Apple has no choice but to use lower end nodes from Intel. It'll be a worse product than TSMC for sure. But Apple has no choice because of the AI boom.

Good luck for Nvidia when China takes over Taiwan and it will, whatever anyone says. Sooner or later.

 

[baconcat_8964]

Good luck for Nvidia when China takes over Taiwan and it will, whatever anyone says. Sooner or later.

China won't risks their entire global relationship just for invading Taiwan.

 

[TracerAnalog]

Not gonna buy these. Intel Macs were the worst. Many probably don’t remember it but they were running hot af and battery life was ****

This will be nothing like that. It will be Apple Silicon.

 

[TracerAnalog]

This has been reported on before. It makes total sense to want to rely on more than one manufacturer, especially in this volatile politically charged market.

 

[upthetoffees]

I wish this A.I. craze would go on and settle down. Or at least become more efficient. Why do these servers require so much silicon and ram? Can we not find a way to make more powerful, simple, efficient models that run well on current hardware instead of wrecking the market? This all seems really silly.

This is just the start.

 

[JoeSilver]

China won't risks their entire global relationship just for invading Taiwan.

Oh yes, the tariffs. We’ve seen how it has worked.
No western power will endanger their commercial relationship (and risk retaliation in rare earth export from China) to save Taiwan.