It's long overdue for Apple to start producing its own chips and cut out the middleman.
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Apple Reportedly Refuses to Accept TSMC Chip Price Hike
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If they started now youd see it take off in 10-20 years maybe. The equipment required is not on the open market and those who are capable of making lithography machines have capacity bought up making the next machines for ASML and other tech.
Apple has money but that money only goes so far. YOu can't throw money at things and expect it to just happen.
Its not realistic for apple to just do it.
The fabrication process is basically so specialized that even hiring staff won't get you off the ground itll take contractors, vendors, specialized companies to get you started and they are all busy with other companies.
This is all a negotiation. In real life Apple will agree to some kind of price increase; not the full amount, but likely somewhere near the middle (or because it's Apple, the low quarter).
At some point everyone has to make money to survive. In any case TSMC has more leverage, since Apple's a quarter of its business but TSMC makes 100% of Apple's CPUs.
At some point everyone has to make money to survive. In any case TSMC has more leverage, since Apple's a quarter of its business but TSMC makes 100% of Apple's CPUs.
A silly comment given that the iPhones price has not changed at all even though costs have gone up for everyone from Apple top down.
Price increases have generally followed the introduction of higher end features and materials and haven’t been for the sake of raising prices, otherwise this years iPhone wouldn’t have costed $999 like the ones before it.
Those are some pretty broad assumptions you appear to be making about somebody that you don’t know beyond a single forum post.
Borderline ad hominem.
True, as I am sure there are some who are using that as an excuse to hike prices for nonsensical reasons. At the same time, there are entities and industries that are greatly impacted by the change in environment and economy directly and have no choice.
TSMC may be in a hybrid situation of both issues. There are likely a lot of critical elements that go into chip fabrication that are being impacted by the volatile economy.
This is exactly why the 1% spend so much time making sure the working class is divided.
But I, the consumer, have complete control over the price hike: I'm choosing to not buy
I'm sure Apple hedges on currency risk, but I still have to imagine pricing for chips should have dropped a bit because of the strength of the dollar.
It's the coming retail price of Apple products in the EU/GB/Asia that I'm worried about.
It's the coming retail price of Apple products in the EU/GB/Asia that I'm worried about.
Apple would likely be prohibited of doing any business with the new China+Taiwan by Western sanctions if China invaded Taiwan.
If China were to invade Taiwan, they would at a minimum nationalize TSMC. It's quite likely that many of the top executives would wind up in Chinese prisons or more likely dead. I doubt Apple or most of the western world would deal with them again.
Problem is, TSMC is the best right now. The other option is Samsung, and they butchered the Snapdragon 8 gen 1 so bad that Qualcomm turned to TSMC. I mean I don’t know who Apple would use if they don’t like TSMC price. Intel?
Yes you can refuse. One, hold onto current iPhone longer. Two, competitive Phone options. Three, purchase a less expensive iPhone. Three good refuse options today.
That’s what the fed is doing through increasing interest rates. Reduce peoples income so they buy less and therefore companies can’t charge as much.
By the way, TSMC is only the most advanced because they use the latest machines from ASML. CNBC says Intel is first in line for ASML’s next-gen EUV machine, so perhaps Apple thinks they have leverage now. I know the Intel fabs are years out, but this negotiation is likely also for chips that are years out. I am pro-TSM and anti-INTC, not a fan of Pat Gelsinger, but Apple just needs to use whoever has the latest ASML machine, and I’m sure they are also eager to reduce their “China/Taiwan war” risk factor.
I think there might be antitrust issues with that. Not to mention, developing the capability would cost a good fraction of Apple's total worth.
Apple may not have a choice about using TSMC for its high-end gear, but it has a choice about the extent to which it uses the latest nodes and can cut its orders (it can raise prices and trade volume for margin).
TSMC on the other hand will have made huge capital expenditure but with relatively low costs per wafer, so needs to keep utilisation up.
I wouldn't be surprised if Apple did try and second source a few products with Samsung or even Intel to try and reduce their dependence on TSMC and to show TSMC they aren't the only game in town (even though they are for many products).
TSMC on the other hand will have made huge capital expenditure but with relatively low costs per wafer, so needs to keep utilisation up.
I wouldn't be surprised if Apple did try and second source a few products with Samsung or even Intel to try and reduce their dependence on TSMC and to show TSMC they aren't the only game in town (even though they are for many products).
Yeah, refuse to pay more and fabricate your own chips in the US! See if you are willing to invest that money, Apple.
HobeSoundDarryl
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FED can only do so much... mostly in pinching credit. Fed doubling rates from here won't do much to impact people "just paying" or refusing to pay for soda at 2X pricing, or eggs, steak, gas, tech, etc.
FED raising rates doesn't touch incomes (for almost everyone). Instead, it just pressures what they can buy on credit by making the future payback more expensive (due to higher interest). I would not place a big bet on that affecting consumer purchasing much at all... except up at the big ticket level (homes, cars) where modestly higher interest rates translates into many thousands to tens or even hundreds of thousands in extra (interest) cost... and the "trickle down" effect of that (people not buying new homes means that furniture to fill those new homes won't be purchased, etc).
If consumers as a group chose to not "just pay" (more), price hikes would cease and start working down. FED playing around with the core rate won't have much effect on those day-to-day consumer purchasing decisions until the interest they pay eats up any spare cash available and/or pinches their ability to "pay later" on additional credit.
A few generations ago- your grandparents or so- seemed to value cash more than modern consumers. They would barter/bargain and "just say no" to things they wanted if they didn't feel there was enough value in whatever was being offered. If food prices were too high, those that could might raise their own or barter with local farmers to bypass the middlemen, etc. If energy prices were too high, they might use less AC/Heat, carpool/bus/train instead of use their own car/gas, etc.
Modern consumer just buys. If they lack the cash, they use credit. Yes, they may complain about higher prices... they may spin how they are "forced" (to buy)... they may proclaim how unfair it is... etc... but they simply roll over and pay. As long as they have any spare cash, get a payment to fit into that remaining cash pool and they may finance another purchase they really can't afford. Etc.
In doing so, they reward the seller seeking higher revenue and drive "record profits." We could all learn something from our grandparents and older... or paying closer attention to the financial situation of anyone we know on "fixed income" (where they have no choice but to squeeze every bit of value out of each scarce dollar they have). You'll see those people very carefully scrutinizing each purchase, passing on most anything that is not absolutely essential, etc.
So why is there so much spin about the FED "corralling inflation"? Because the above approach would definitely lead to recession. Pricing would recede. Profits would recede. And by spinning it as a FED problem to solve, consumers may be fooled into continuing to consume-consume-consume, perhaps blaming the FED for the "too high" prices they are paying "because of inflation" like it's something they simply must tolerate... instead of recognizing it as a CHOICE, most easily addressed with one simple word "No."
What would your Grandparents do? Make do with what they have... stretching the use of things already owned vs. paying any price asked to have "latest & greatest."
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