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Apple Reportedly Refuses to Accept TSMC Chip Price Hike
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Normal biz negotiations, and other than Apple and TSMC, no-one has any knowledge of that
Nowhere does he say TSMC will destroy its own factories if China invades. Stop spreading fake news.
Agreed, TMSC is just too far ahead of everyone else, this is probably Apple's invitation to negotiate, and off to find a middle of the price increase they will go.
I think it would be too much even for Apple and I doubt Taiwan's government would allow it - their government literally sees TMSC as something that would prevent the world from saying "just let China take them..." regarding a takeover or invasion of Taiwan.
Of course they'll reach an agreement. While Apple needs TSMC more than TSMC needs Apple, TSMC still gets over 25% of revenue from Apple. Losing Apple's business would be painful for them.
TSMC: revenue share of leading customers 2021| Statista
In 2021, Apple was the largest customer of the Taiwanese semiconductor foundry TSMC, contributing a ******* of the company's revenues.
www.statista.com
You have never spent any time with diplomatic speak have you. "Factories will be rendered inoperable" is just another way of saying, "We will shut them down so they can't be restarted." Yes, he talked about supply chain issues rendering the factories dead. That was simply because one does not say, "We will take a hammer to our billion dollar equipment if you invade."
Let’s say Apple did. What would Apple do with the excess capacity TSMC currently has above the quantities that Apple needs. Will they start fabricating chips for other companies? They could sell off the extra equipment but then they would be losing money since selling off the equipment piecemeal would generate less revenue than they would have paid for that portion of TSMC since TSMC was successfully running it as a going concern.
There are lifestyle choices that can lessen or eliminate one's dependence upon gasoline and/or retail food.
How dare you. MacRumors adheres to the highest standard of journalistic integrity.
You're absolutely making this up. Just stop.
Here's the actual full quote:
He is not at all saying that TSMC will destroy its own factories as you suggested. All he's saying here is that TSMC relies on suppliers and technology from so many countries and companies that any attempt at seizing it by force would render it "not operable". And it makes a ton of sense. A chip fab requires thousands of suppliers.
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But Apple doesn’t need it though. You don’t need to have the most advanced node, you could be using a Samsung chip without any issue at all. This year for example the A16 is only 20% faster than previos iPhone. That’s a marginal improvement.
Samsung's node is significantly behind. In fact, Qualcomm's latest high-end Snapdragon manufactured by Samsung was so bad that they had to make an emergency revision using TSMC's node.
What’s not mentioned in the article is the direct and indirect spending on R&D that Apple contributes by acting as the lead guinea pig for all these new nodes.
Apple does not simply send a blueprint to TSMC and chips show up on the front porch 6 months later. Both companies are working together to finalize transistor layouts, establish best practices, and identify improvements that reduce defects and enhance yields. Some of that knowledge can be applied to other customers’ fabrication requests, further increasing TSMC’s profitability on the other 74% of their revenue.
Apple does not simply send a blueprint to TSMC and chips show up on the front porch 6 months later. Both companies are working together to finalize transistor layouts, establish best practices, and identify improvements that reduce defects and enhance yields. Some of that knowledge can be applied to other customers’ fabrication requests, further increasing TSMC’s profitability on the other 74% of their revenue.
A few points
1) TSMC isn't for sale
2) Taiwan would block the sale because TSMC is seen as a pride of the country; It's one of their biggest succes stories
3) Apple isn't going to spend over $600 billion (Apple would have to pay a big premium) to buy TSMC even if they were for sale
4) I would explect the other chip customers of TSMC (NVidia, Qualcomm, AMD, Intel, etc) to push for a block of such a sale
I can see Apple jumping over to cheaper, more basic CPUs for those who want to buy a basic Apple phone on a subscription model… something A14 equivalent would be more than plenty. They could still have TSMC make premium Pro phone CPUs at a higher price.
The A14,or even A13 is still plenty fast for a mid-ranger. And yes, Samsung and others are behind TSMC, but they HAVE reached A13 speed levels.
The A14,or even A13 is still plenty fast for a mid-ranger. And yes, Samsung and others are behind TSMC, but they HAVE reached A13 speed levels.
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It's called diplomatic speak. I have been doing it all my life. Reading between the lines is a very important skill.
I hope Apple will pass the savings to its customers rather than investors!
Yes, just like TSMC is OK with the price hike. Just like Apple you have a choice not to be OK with it and not buy the product.
It's a very worthy stance but we can't manage that level of coordinated militancy.
It's a bit like how I said a few weeks ago if everyone worldwide below General level said 'nah I don't feel like fighting', wars would end. Yes: ending conflict really is that simple. But we can't do it.
Hopefully, you're not getting paid to do these interpretations. Yikes.