Apple and TSMC have had a strong relationship for years, with TSMC being the exclusive supplier of Apple’s systems-on-a-chip since 2016. The partnership started in 2014, but Apple also used Samsung for chip supply in 2015.
Now, Apple is considering expanding its exclusive relationship by having another company supply some of its processor needs, according to The Wall Street Journal (Apple News+):
Now that TSMC is doing more business with Nvidia and other AI companies, people familiar with the chip supply chain mentioned Apple’s exploration of having lower-end processors made by a different supplier.
Rolfe Winkler and Yang Jie
Intel Inside… Again?
The WSJ report hinted at Apple potentially in talks with Intel to handle some of its lower-end processor needs by 2027 or 2028.
Supply chain analyst Ming-Chi Kuo previously mentioned that Intel could start shipping Apple’s lowest-end M processor by 2027, indicating a possible collaboration for Mac and iPad models. GF Securities analyst Jeff Pu also suggested Intel supplying chips for non-Pro iPhone models in 2028.
Intel might fabricate the A22 or A23 for Apple, potentially leading to “Intel inside” for the iPhone 20 or iPhone 21.
While Intel may manufacture chips for Apple, Apple will continue designing the chips independently, relying on Intel for fabrication only. This differs from the past when Apple’s Mac lineup used Intel’s X86 processors before transitioning to Apple’s silicon platform in 2020.
In 2021, Intel shifted focus to becoming a “Foundry Services” business, aiming to manufacture chip designs for others. Intel’s CEO at the time expressed interest in having Apple as a customer for A-series and M-series chips.
The AI Tax: Beyond Processors
In the era of artificial intelligence, Apple is diversifying its supply chain due to Nvidia surpassing Apple as TSMC’s top customer. Apple faces competition for capacity and priority from Nvidia and others, affecting margins in various component markets such as RAM and NAND memory.
Rising costs from suppliers like Samsung and SK Hynix, who provide RAM chips, add to Apple’s challenges. Apple’s CEO mentioned the impact of increasing prices of RAM and SSD storage chips on the company’s gross margin, signaling potential adjustments to deal with cost pressures.
