Major Earthquake in Taiwan Halts Some Apple Chip Production Lines

[heretiq]

Who else could manufacture chipsets? Lots of companies would jump at the chance, though, admittedly, TSMC appears to be great.

Imagine if Apple knew this was coming five years ago. Imagine if G-d came to Tim in a dream. I guarantee you, they would find an alternative. My point was that they choose not to invest in manufacturing diversity.

In theory Intel, AMD, NVIDIA, Samsung, Qualcomm, Texas Instruments and others have the foundational capability to manufacture chipsets for Apple. The implication that they are not chomping at the bit to compete for Apple's business because Tim Cook was shortsighted or uninspired is hollow.

It's obvious that these companies are aware of Apple and would love to win Apple's business and money -- so there is no need for Tim Cook to have an epiphany or provide encouragement for these companies to see the obvious opportunity and try and win it.

The issue is that they either have not been able to deliver what Apple needs (e.g., Intel, AMD, Samsung, Qualcomm and TI) and/or have other priorities (NVIDIA). Up to this point only TSMC can deliver what Apple needs and the *T* in TSMC stands for *Taiwan*. However, as early as 2021 there were reports that TSMC were exploring options to build fabs in the US and Japan.

It takes a high level of cynicism to believe Apple was too shortsighted or uninspired to either be behind (or encouraging) this in order to increase supplier diversity. The reason why it hasn't happened yet is because this is expensive and complex work that takes way more time and money than might be apparent to lay people.

 

[seek3r]

I’m sure Apple has been reevaluating Taiwan frequently as a manufacturer of its chips since China has threatened to take control of Taiwan.

Similar to Hong Kong and when China took back control of Hong Kong from the British almost 30 years ago, they would largely not interfere too much in Taiwan’s economics as it is a great source of income for the PRC. Basically it would be run as a capitalistic territory under a socialist country.

Depending on Apple’s stance on human rights, which to this point has been mostly talk, they may very well keep producing microchips in Taiwan even under China control, but if they put their money where their mouths are, they’ll move production.

Taiwan currently produces 60% of *all* semiconductors globally and 90% of the most advanced chips. They are the absolute center of the industry, expertise and production alike. This isnt something Apple, as big as they are, can change. They're big, but not *that* big. Even as countries invest in diversifying that a bit, all your eggs in one basket is risky even without the PROC threat, Taiwan is going to be crucially important to tech for a very very long time.

 

[Rigby]

In theory Intel, AMD, NVIDIA, Samsung, Qualcomm, Texas Instruments and others have the foundational capability to manufacture chipsets for Apple.

Only Intel and Samsung are capable of producing (near) leading edge chips. The others either have no fabbing anymore (AMD, Nvidia, Qualcomm) or can only fabricate chips based on older nodes (think 16nm) themselves. The barriers of entry are high due to the enormous cost of leading edge fabs and EUV lithography machines.

The implication that they are not chomping at the bit to compete for Apple's business because Tim Cook was shortsighted or uninspired is hollow.

Of course Intel and Samsung would love to get a slice of Apple's business. That's no secret. Their respective CEOs have publicly said so.

The issue is that they either have not been able to deliver what Apple needs (e.g., Intel, AMD, Samsung, Qualcomm and TI) and/or have other priorities (NVIDIA). Up to this point only TSMC can deliver what Apple needs

That is probably about to change. Intel seems to be on track with its expensive "5 nodes in 4 years" turnaround plan. Their 18A process will likely come online in 2025 (though with limited quantities), well before TSMC's comparable 2nm node. It takes more than just technology to run a successful leading edge foundry business, but they have essentially bet the farm on this and there is strong demand for diversified semiconductor supply chains.

 

[JosephAW]

Have several earthquake apps, usually takes 30+ minutes to get an alert in the states for overseas events. Assuming they are verifying it’s not a false positive before the push. Also on the USGS email list as well.

Is there a better app that reports immediately with a push reguardless a false or positive event?

Have friends in Southern Europe, Kunming China and Kyrgyzstan areas and like to keep my antenna up just in case they are in need of any help.

 

[Steve686]

Taiwan currently produces 60% of *all* semiconductors globally and 90% of the most advanced chips. They are the absolute center of the industry, expertise and production alike. This isnt something Apple, as big as they are, can change. They're big, but not *that* big. Even as countries invest in diversifying that a bit, all your eggs in one basket is risky even without the PROC threat, Taiwan is going to be crucially important to tech for a very very long time.

No matter what they are at the current point in time, Apple is surely evaluating an exit strategy in a worst case scenario, no matter how feasible it may be in 5, 10, or even 15 years.

It's only business basics.

 

[heretiq]

Only Intel and Samsung are capable of producing (near) leading edge chips. The others either have no fabbing anymore (AMD, Nvidia, Qualcomm) or can only fabricate chips based on older nodes (think 16nm) themselves. The barriers of entry are high due to the enormous cost of leading edge fabs and EUV lithography machines.


Of course Intel and Samsung would love to get a slice of Apple's business. That's no secret. Their respective CEOs have publicly said so.


That is probably about to change. Intel seems to be on track with its expensive "5 nodes in 4 years" turnaround plan. Their 18A process will likely come online in 2025 (though with limited quantities), well before TSMC's comparable 2nm node. It takes more than just technology to run a successful leading edge foundry business, but they have essentially bet the farm on this and there is strong demand for diversified semiconductor supply chains.

Agree 100%. I was trying to be generous to the comment I was replying/challenging to by acknowledging that theoretically those companies had capability to service Apple because of their history in the space; but practically and realistically they can’t at this point in time — which you explained better than I could/did. 🙏🏽

 

[svish]

Hope the damages if any, to the facilities are minimum and that production can resume soon.

 

[Velli]

However, since the 90s, and certainly the early 2000s, there has been a growing concern, regarding the US in particular and the world in general, over the reliance on China and SE Asia.

The world is overly reliant on the US. I think it just has to come to terms with no longer being the centre of the Earth. Not saying it is better, but instead of fighting the inevitable, the West needs to Focus on how to cope with realities. We won’t win by building walls, we will win by figuring out what we have to offer that they don’t, preferrably something that doesn’t make us fatter and lazier. While the West is making burgers and sodas, Asia is making computers and electric cars.

Apple CAN’t choose to manufacture iPhones in the US. The capability is not there.

 

[Realityck]

Status update

The Taiwan earthquake is a stark reminder of the risks to the region’s chipmaking industry | CNN Business

The world’s biggest chipmaker is working to resume operations following the massive earthquake that struck Taiwan Wednesday — a welcome sign for makers of products ranging from iPhones and computers to cars and washing machines that rely on advanced semiconductors.

www.cnn.com

As of late Wednesday, the company said that more than 70% of the tools in its fabs had been recovered within 10 hours of the earthquake, with recovery levels higher in some newer facilities. TSMC said impacted facilities were expected to resume production throughout Wednesday night.

As of Thursday, TSMC said it expected to have fully recovered operations of all of its facilities by the end of the day. However, it noted that “certain production lines in areas which experienced greater seismic impact are expected to require more time for adjustment and calibration before returning to fully automated production.”

Even an hours-long shutdown of certain chip production could take weeks to recover from.

“Some of the high-end chips need 24/7 seamless operations in vacuum state for a few weeks,” Barclays analysts said in an investor note Wednesday, adding that operation halts could mean “some high-end chips in production may be spoiled.” They noted that TSMC could see a $60 million impact to its second quarter earnings from the disruption.

 

[skeptech]

Workers in Taiwan are much more underpaid and overworked compared to fabs in other parts of the world. It's basically as close as you can get to a "sweatshop" for semiconductors. It's also partially why TSMC is having trouble hiring workers in Arizona.

See https://www.ceicdata.com/en/indicator/taiwan/annual-household-income-per-capita

 

[szw-mapple fan]

See https://www.ceicdata.com/en/indicator/taiwan/annual-household-income-per-capita

This is just the income per capita for Taiwan as a whole. I’m not saying Taiwan’s average income is low. I’m talking about the income and working conditions for workers in semiconductors specifically compared to others in the same industry elsewhere in the world relative to their pay.