Calling Nvidia niche feels a bit wild given their status-quo right now, but from a foundry perspective, it seems true. Apple is the anchor tenant that keeps the lights on across 12 different mature and leading-edge fabs.
Nvidia is the high-frequency trader hammering the newest node until the arb closes. Stability usually trades at a discount during a boom, but Wei knows the smartphone replacement cycle is the only predictable cash flow. Apple is smart. If the AI capex cycle flattens in late '27 as models hit diminishing returns, does Apple regain pricing power simply by being the only customer that can guarantee wafer commits five years out?
This article repeatedly cites revenue growth numbers as an indicator of Nvidia and Apple’s relative health, which is a very particular way of looking at things. By way of another one, Apple had $416Bn in revenue, which was a 6% increase from the prior year, or about $25Bn, or about all of Nvidia’s revenue in 2023. Apple’s had slow growth in the last 4 years following a big bump during the early pandemic; their 5 year revenue growth, though, is still $140Bn, or about $10Bn more than Nvidia’s 2025 revenues. Nvidia has indeed grown like a monster in the last couple years - 35Bn increase from 23-24 and 70Bn increase from 24-25. Those numbers would be 8% and 16% increases for Apple respectively, which I’m sure would make the company a deeply uninteresting slow-growth story compared to new upstarts.
I get why the numbers are presented the way they are, but it always gets weird when talking about companies of Apple’s size - percent increases that underwhelm Wall Street correspond to raw numbers that most companies would sacrifice their CEO to a volcano to attain, and sales flops in Apple’s portfolio mean they only sold enough product to supply double-digit percentages of the US population.
US tech companies aren’t built to be like 3M is/was and able to have their hands in infinite pies.
The giant conglomerates in Asia seem more able to do it.
Google has somewhat tried but then famously kills most everything even things that could be successful if smaller businesses.
I think there's something about both the myth of the unicorn and of the hero founder/CEO in tech that forces a push towards legibility and easy narratives for a company - it means that, to a greater degree than other industries, large tech companies are a storytelling exercise, and "giant corporate blob that sprawls into everything" isn't a sexy story, nor is "consistent 3% YoY gains," even when that's translating into "we added the GDP of a medium-sized country to our cash pile again this year."
Every time a CEO or company board says "focus," an interesting product line loses its wings.
It's because the storytelling needed for Wall Street. It's the only way to get sky high revenue multiples, selling a dream, because if you're a conglomerate all you can do is to sell the P&L - it's like selling an index. If you have a business division that's does exceedingly well compared to the rest, you make more money by spinning it off.
I think Asian companies are much less dependent on public markets and have as strong private control (chaebols in South Korea for example - Samsung, LG, Hyundai etc).
If you look at US companies that are under "family control" you might see a similar sprawl, like Cargill, Koch, I'd even put Berkshire in this class even though it's not "family controlled" in the literal sense, it's still associated with two men and not a professional CEO.
I think this is more of a result of big US tech being extremely productive (with their main competency)
Yeah, it is insane what areas and products companies like Mitsubishi, Samsung, IHI or even Suntory are involved in.
I agree. People confuse relative for absolute numbers.
And ironically Apple acts like being a small contender the moment they feel some heat after a decade of relatively easy wins everywhere it seemed.
So finally there is a company that gives Apple some much needed heat.
That’s why I in absolute terms side with NVIDIA, the small contender in this case.
PS: I had one key moment in my career when I was at Google and a speaker mentioned the unit “NBU”. It stands for next billion units.
This is ten years ago and started my mental journey into large scale manufacturing and production including all the processes included.
The fascination never left. It was a mind bender for me and totally get why people miss everything that large.
At Google it was just a milestone expected to be hit - not one time but as the word next indicates multiple times.
Mind blowing and eye opening to me ever since. Fantastic inspiration thinking about software, development and marketing.
How did you get into large scale manufacturing and production? Was it a career switch? Downsides? It too fascinates me. Any book recommendations?
It’s also strange because I highly doubt Google has manufactured a billion physical units of anything. Most of their consumer hardware is designed and built by partners, including Pixel.
I think the parent comment said "mental journey", not a real one, although it will be good to get more insights.
Waiting OP response too, fascinating.
Because shares are no longer about investing in a company that is making healthy margins and has a solid business, that will pay you a decent dividend in return for your investment.
Shares are a short-term speculative gamble; you buy them in the hope that the price will rise and then you can sell them for a profit. Sometimes the gap between these two events is measured in milliseconds.
So the only thing that matters to Wall St is growth. If the company is growing then its price will probably rise. If it's not, it won't. Current size is unimportant. Current earnings are unimportant (unless they are used to fund growth). Nvidia is sexy, Apple is not, despite all the things you say (which are true).
> Nvidia has indeed grown like a monster in the last couple years - 35Bn increase from 23-24 and 70Bn increase from 24-25.
Worringly for Nvidia, Apple is producing products people want and are provenly useful, thus a vast majority of its value is solid, so revenue streams for fabs Apple uses is solid.
Nvidia on the other hand, is producing tangible things of value, GPUs, but which are now largely used in unproven technologies (when stacked against lofty claims) that barely more than a few seem to want, so Nvidia's revenue stream seems flimsy at best in the AI boom.
The only proven revenue stream Nvidia has (had?) is GPUs for display and visualisation (gaming, graphics, and non-AI non-crypto compute, etc.)
Calling AI an unproven market is a wild statement. My mother and every employed person around me is using AI backed by Nvidia GPUs in some way or the other on a daily basis.
It might matter that Nvidia sells graphics cards and Apple sells computers and computer-like devices with cases and peripherals and displays and software and services. TSMC is responsible for a much larger proportion of Nvidia's product than Apple's.
I dislike this dramatization in reporting of mundane facts.
So report the facts but sentences like "What Wei probably didn’t tell Cook is that Apple may no longer be his largest client" make it personal, they make you take sides, feel sorry for somebody, feel schadenfreude... (as you can observe in the comments)
> I dislike this dramatization in reporting of mundane facts.
Okay, but this isn't a news article, it's an opinion piece on some guy's substack.
"PopFi"
Clickbait permeates all things. Next thing you know they'll be adding ____ (insert favorite controversial world leader) enraged to the headline.
Or perhaps insert favorite controversial world leader will insert themselves into the real facts of the story behind the title
I hate this writing as well. Is not about technology and finance? The reporter writes as if it is a novel.
It's written in "HBS case study" tone. You might not like it, but frankly, ICs aren't the target demographic anyhow.
They didn't tweak their prompt styling request enough... The ChatGPT world is depressing.
Doesn't seem like LLM generated text to me. Even prior to ChatGPT some journalists preferred to write in a novel-style with extraneous fluff like that.
The sheer number of em dashes in the text suggest to me that the reporter didn't write anything, ChatGPT did.
The other day I read some old blog posts of mine (~2016) and they contain "em dashes". According to you they were all written by AI.
If we give up every bit of punctuation that ChatGPT uses, written language will become much worse.
For the last time.. Word (the program very popularly used by many reporters across the world to write articles) automatically autocorrects hyphens to em-dashes according to the default loaded grammar rules for En-US. The existence of em-dashes in an article does NOT immediately imply GenAI slop.
You know posh schools teach people to write with em dashes too, right?
A lot of people don't actually learn good writing at their fancy schools - but they do they learn the stylistic quirks that signal one went to the fancy school.
How do you think it got in the LLM training set in the first place?
The most important signal is actually that demand is far exceeding supply and there is no AI Bubble
Except this makes no sense. There isn’t enough power to run all these new chips, so the demand must be speculative, not growth.
It seems a bit odd that data center operators aren’t willing to put their money where their mouth is. Data center operators say: expand more quickly. TSMC says: we need long term demand to justify that. And all the data center guys say is: don’t worry that won’t be an issue, trust us. I would think that if they were serious they would commit to cofinancing new foundries or signing long term minimum purchasing agreements.
Semiconductors is extremely cyclical. One of the reasons TSMC survived the previous boost-boom cycles is their caution. If you overexpand, you risk going out of business in the next downturn.
AFAIK only Apple has been commiting to wafers up to 3 years in the future. It would be a crazy bet for NVidia to do the same, as they don't know how big will be the business.
The data center builders are hesitant, too.
If the long term demand disappears, there may not be anyone left for TSMC to collect from on those MPA. This somewhat undermines their utility as a security.
> I would think that if they were serious they would commit to cofinancing new foundries or signing long term minimum purchasing agreements.
That would ruin TSMC and others' independence.
Nvidia already did buy Intel shares so it is a thing.
Nvidia did discuss with TSMC for more capacity many times. It's not about financing or minimum purchasing agreements. TSMC played along during COVID and got hit.
How do you figure? Demand for electronics skyrocketed when everyone working from home bought new laptops webcams, tablets. There was a fire on a TSMC manufacturing line that caused a shortage early on but capacity recovered, demand stayed strong throughout and there was a massive spike at the end when car manufacturers needed to ramp back up to handle all the paused orders.
As far as I know there was never a demand dip at any point in there.
> there was a massive spike at the end when car manufacturers
Which barely impacts TSMC. Most of their revenue and focus is on the advanced nodes - not the mature 1s.
> As far as I know there was never a demand dip at any point in there.
When did I imply there was a demand dip? I said they built out too much capacity.
What happened during COVID? Could you please explain shortly what they agreed to, and how it bit them?
And what of the natural resources sustaining all of this? This conglomerate of data centers, gpus and other chips will surely have to push manufacturers to the maximum in other industries. I don't think sustainable energy, recycling and carbon credits will be enough to cover for it.
I think the opposite. Having NVIDIA investing in TSMC's bleeding-edge process node should benefit Apple rather than disadvantage.
It means that Apple doesn't have to be sole investor in latest node development which is more harder to justify, especially in the year where smartphone upgrade cycle is slowdown. Having NVIDIA (and AI boom) in the picture should help Apple reduce CAPEX for their semi-conductor investment.
Explains why Apple is looking to diversify their fabs with Intel. If Intel can stay on their current trajectory and become a legitimate alternative they will do very well as a fab with additional available capacity.
Maybe I missed something but aren't Intel looking to wind down some of their production ?
The key here is Intel is expanding the idea of operating their fab for an external customer (foundry services). What they’re doing with specific fabs or processes is less important relative to their bigger emphasis on working for a client like Apple.
Not that I've heard. I searched and I see nothing. Where has Intel said they are winding down chip fabrication?
I'm thinking back to over the summer, they were reducing their work force and changing the previous CEO's direction.
https://www.manufacturingdive.com/news/intel-layoffs-25-perc...
Ah okay, that's good news actually, would love to see Intel growing more. I know I'm rooting for their GPU range too.
New CEO said he'll continue with Foundry provided he gets significant customers to justify the cost. In a recent comment/press release, Intel said they are continuing production on 14A. Ergo, they have external customers (or Trump is bullying him into it, but I suspect it's mostly the former).
Sneak preview of the TSMC shortage that will sweep the world in 2027 when China takes Taiwan and the TSMC scuttles their chip fabs on the island.
I don’t know the hedge to position against this but I’m pretty sure China will make good on its promise.
There is no "promise".
The 2027 date was a guideline for their military to be "ready", which they may not be either. That is a far cry from the decision to actually make a move. They will only do that if they're certain it will work out for them, and as things stand, it is very risky for Xi.
I'm not sure how true it is or not but I heard that TSMC has the ability to remotely destroy all of their main fab equipment in the event the Chinese are invading Taiwan.
This is correct: https://www.bloomberg.com/news/articles/2024-05-21/asml-tsmc...
The most advanced ASML machines also cost something like $300-400M each and I am willing to bet if configured wrong can heavily damage themselves and the building they are in.
You don't need to physically destroy anything. All you need to do is zero-fill the storage devices in the facility and walk away. The tools are worthless without parameters/recipes/configuration. Reinventing this stuff is harder than acquiring an EUV tool.
Alternatively, China could make progress fabricating and exporting its own chips and designing its own GPUs. The entire chip sector could go the way of solar panels and EVs with prices dropping and margins collapsing to near zero.
Yup, they're also like 5-10 years out from their own lithography machines as well. China wanted Taiwan before TSMC was a thing, by the time they take Taiwan back they won't need TSMC.
> I don’t know the hedge to position against this
Buy in-demand fab output today, even at a premium price and even if you can't install or power it all, expecting shortages tomorrow. Which is pretty much the way the tech economy is already working.
So no, no hedge. NVIDIA's customers already beat you to it.
I'm about 100% positive America would consider that an act of war and respond accordingly.
the sad part of this is that volume/priority at TSMC shifting from consumer chips that get sold to you and me, to corporate chips which likely will get sold to OpenAI/Amazon/MS or some other corporate datacenter, means that the un-democratization of computing power is well underway....
mirroring, come to think of it, the movement to un-democratize of modern governments...
(I would be happier if the news behind Nvidia's strength was sales of good, reasonably priced consumer GPU cards...but it's clearly not. I can walk down the street and buy anything from Tim Cook, but 9 out of 10 times, I cannot buy a 5080/5090 FE card from Jenson Huang).
non Apple consumers were already used to this clown fiesta since AMD processors had late access to SoTA nodes for the very same reason.
And possibly other types of hardware also had price bumped or used outdated chips because Apple has to build their iPhone/mac n+1.
That's why you see some folks actually mocking Apple about the situation. They were already affected.
If anything this might force a market-wide fix in the medium term.
Plus... Apple kinda wastes it. Not to be judgy, but we don't need 2nm chips to hardware-accelerate Netflix and Pornhub. The iPhone is locked-down, there's no worry that it will be a poor gaming platform or disrupt valuable workflows. A new iPhone chip means nothing anymore.
Between the $99/year sideloading, Liquid Glass and fighting fruitlessly against CUDA, I think Apple needs a break to reflect on why their software strategy is so unpopular with everyone. The hardware advances are doing them more harm than good at this point.
TSMC is a for profit business. Why would they care about the moral virtue purity of the applications running on their chips? Seriously illogical statement
This piece provides a fair bit of insight:
> Apple-TSMC: The Partnership That Built Modern Semiconductors
In 2013, TSMC made a $10 billion bet on a single customer. Morris Chang committed to building 20nm capacity with uncertain economics on the promise that Apple would fill those fabs. “I bet the company, but I didn’t think I would lose,” Chang later said. He was right. Apple’s A8 chip launched in 2014, and TSMC never looked back.
https://newsletter.semianalysis.com/p/apple-tsmc-the-partner...
As a heavy user of OpenAI, Anthropic, and Google AI APIs, I’m increasingly tempted to buy a Mac Studio (M3 Ultra or M4 Pro) as a contingency in case the economics of hosted inference change significantly.
Don't buy anything physical, benchmark the models you could run on your potential hardware on (neo) cloud provider like HuggingFace. Only if you believe the quality is up to your expectation then do it. The test itself should take you $100 and few hours top.
This is certainly the best approach.
If theres a market crash, there could be a load cheap H100s hitting ebay
You can't run those at home.
Why?
Plenty of home runs all electric heating systems. Running inference on a H100 could be dual-purpose and also heat your home! (albeit less efficient than heat pumps, but identically as efficient as resistive heating)
The 8-10kW isn’t a big deal anymore given the prevalence of electric vehicles and charging them at home. A decade ago very few homes have this kind of hookup. Now it’s reasonably common, and if not, electricians wouldn’t bat an eye on installing it.
FWIW the M5 appears to be an actual large leap for LLM inference with the new GPU and Neural Accelerator. So id wait for the Pro/Max before jumping on M3 Ultra.
Thanks, that helps me keep things in perspective.
You'd want to get something like a RTX Pro 6000 (~ $8,500 - $10,000) or at least a RTX 5090 (~$3,000). That's the easiest thing to do or cluster of some lower-end GPUs. Or a DGX Spark (there are some better options by other manufacturers than just Nvidia) (~$3000).
Yes, I also considered the RTX 6000 Pro Max-Q, but it’s quite expensive and probably only makes sense if I can use it for other workloads as well. Interestingly, its price hasn’t gone up since last summer, here in Germany.
I have MacStudio with 512GB RAM, 2x DGX Spark and RTX 6000 Pro WS (planing to buy a few of those in Max-Q version next). I am wondering if we ever see local inference so "cheap" as we see it right now given RAM/SSD price trends.
Yeah, Exo was one of the first things to do - MacStudio has a decent throughput at the level of 3080, great for token generation and Sparks have decent compute, either for prefill or for running non-LLM models that need compute (segment anything, stable diffusion etc). RTX 6000 Pro just crushes them all (it's essentially like having 4x3090 in a single GPU). I bought 2 sparks to also play with Nvidia's networking stack and learn their ecosystem though they are a bit of a mixed bag as they don't expose some Blackwell-specific features that make a difference. I bought it all to be able to run local agents (I write AI agents for living) and develop my own ideas fully. Also I was wrapping up grad studies at Stanford so they came handy for some projects there. I bought it all out of pocket but can amortize them in taxes.
That‘s exactly my fear.
the thing is GLM 4.7 is easily doing the work Opus was doing for me but to run it fully you'll need a much bigger hardware than a Mac Studio. $10k buys you a lot of API calls from z.ai or Anthropic. It's just not economically viable to run a good model at home.
You can cluster Mac Studios using Thunderbolt connections and enable RDMA for distributed inference. This will be slower than a single node but is still the best bang-for-the-buck wrt. doing inference on very-large-sized models.
True — I think local inference is still far more expensive for my use case due to batching effects and my relatively sporadic, hourly usage. That said, I also didn’t expect hardware prices (RTX 5090, RAM) to rise this quickly.
M3 Ultra with DGX Spark is right now what M5 Ultra will be in who knows when. You can just buy those two, connect them together using Exo and have M5 Ultra performance/memory right away. Who knows what M5 Ultra will cost given RAM/SSD price explosion?
There is a reason no one uses Apple for local models. Be careful not to fall for marketing and fanboyism.
Just look at what people are actually using. Don't rely on a few people who tested a few short prompts with short completions.
yes, I'm using smaller models on a Mac M2 Ultra 32GB and they work well, but larger models and coding use might be not a good fit for the architecture, after all.
That's great! Apple has the resources to incentivize and invest in alternate production capacity(Intel, Samsung, or others). Sure, it will take years, but a thousand mile journey begins with one step...
Apple is actually a big reason why TSMC is the king of fabs today. They were a reliable cash source for years before TSMC was even ahead of Intel.
Apple can and should do it again!
Fabs are in kind of a catch 22. They need big business to improve and to get lots of business they need to be competitive. Im mostly familiar with that narrative in terms of Intel's current uphill battle - was it really the same for TSMC? I guess maybe there was a similar dynamic except the playing field was more even at that time, so it was a bit less of a catch 22.
Yes, it was. Intel was well ahead of TSMC for quite some time. But TSMC had a diversified and hungry list of clients, with Apple at the forefront. Apple got the taste for wanting their own chips which pushed TSMC to be hungrier. Meanwhile, Intel got fat and complacent. It also helped that phone chips were considerably smaller, so managing yields was easier.
Legit question - what is the current status of the construction of chip production factories in the US?
I know about the existence of the initiative but I don't know how it is progressing / what is actually going on on that front.
TMSC's Arizona fab is up and running producing 4nm chips
There's ~a dozen in the works or under construction
TMSC plans to have 2-3nm fabs operational in the next 2-3 years
So we're 2-3 years behind the standard (currently 2nm), and further behind on the bleeding edge sub-2nm fabs
Don't forget Intel. They are producing chips on 18A right now, with 14A up next.
> TMSC's Arizona fab is up and running producing 4nm chips
Are the majority of the staff still shipped in from Asia?
No. It was originally 50%, unclear what the current numbers are (it was supposed to decrease over time as they train local replacements).
TSMC is already producing at their first one in Arizona (N4 process), second one comes online for N3 in 2028, and third one (N2) broke ground in April 2025 (online date 2029-30)
The projects seem to go well and then union bosses threaten to shut the whole thing down.
Then the essential skilled personnel can’t come train people because the visa process was created by and is operated by the equivalent of four year olds with learning disabilities. Sometimes companies say fuck it we’re doing it anyway and then ice raids their facility and shuts it down.
I’d post the news articles about th above, but your googling thumbs work as well as mine.
This all is just spotlighting the weakness of NVIDIA, AMD, Apple, Microsoft, etc. They all avoided manufacturing in-house for so long and now they're fighting for fab time. Intel on the other hand is interesting...
Intel still hasn't proven that they've got the whole EUVL thing figured out. The best Intel chips you can buy right now use TSMC chiplets on the die.
This isn't really news. Apple has to pay market price like everybody else.
NVidia gets the capacity because they're willing to pay more. If Apple wants to, they can pay more to get it back.
I'm surprised that Apple is not considering opening up its own fabs. Tim Cook is all about vertical-integration and they have a mountain of cash that they could use to fund the initial startup capex.
Semiconductor manufacturing is not an incremental step for Apple. It's an entirely new kind of vertical. They do not have the resources to do this. If they could they would have by now.
They could buy global foundaries and pour in a pile of cash, 5 years later they’d have something useful
Or they could buy out Intel and sell off their cpu design division
In that case they would have just burnt cash for 5 years and didn't have anything to show for it.
If it was that simple, they would have done it.
How do they not have the resources? Certainly they have the cash resources.
At this point it would be corporate suicide if they were not outlining a strategy to own their own fab(s).
> Taiwan Semiconductor Manufacturing Co. plans to spend a record of up to $56 billion this year to feed the world’s insatiable appetite for chips, as it grapples with pressure to build more factories outside Taiwan, especially in the U.S. [0]
Apple has less cash available than TSMC plans to burn this year. TSMC is not spending 50 billion dollars just because it's fun to do so. This is how much it takes just to keep the wheels on the already existing bus. Starting from zero is a non-starter. It just cannot happen anymore. So, no one in their right mind would sell Apple their leading edge foundry at a discount either.
There was a time when companies like Apple could have done this. That time was 15+ years ago. It's way too late now.
[0]: https://www.wsj.com/business/earnings/tsmc-ends-2025-with-a-...
Designing CPUs also wasn't their core business and they did it anyway. Apple probably won't care that much about price hikes but if they ever feel TSMC can't guarantee steady supply then all bets are off.
I wonder what will happen in future when we get closer to the physical "wall". Will it allow other fabs to catch up or the opposite will happen, and even small improvements will be values by customers?
Apple has very much been wanted absolute flexibility to adopt major technology changes so much they’ve tried hard to not be the sole customer of a supplier and deal with political ramifications (source: Apple in China/Patrick McGee)
$20 billion for a new fab is a lot of money, even to Apple.
Closer to $40b for a new fab for an established company to do it all correctly. It's a much more major investment to open a fab without ever doing it before, then continually use the brain power/institutional knowledge you've built up to stay near the forefront of fab tech, and then basically have weird incentives to build a foundry for only your products rather than the world at large.
You're setting yourself up for making a huge part of your future revenue stream being set aside for ongoing chipfab capex and research engineering. And that's a huge gamble, since getting this all setup is not guaranteed to succeed.
Is that true? I guess what I mean is, is it $40B if you are trying to replicate the scale of a TSMC fab? Or could you do it for considerably less if the fab is initially designed to the needs of single customer (Apple)?
Closer to $40B for some of the latest fabs from TSMC you're seeing, yes. While there could be huge simplification in SoC and packaging processes if it was focused on a single product, Apple's needs will likely still be about having cutting edge processors, so it would still be pretty high even if they were to just buy TSMC.
If it were only 20B then Apple would jump at the chance.
As would almost innumerable others.
Well, if the future of your company depends on a fab, twice $20B is cheap.
I thought this got sorted out with giant piles of cash several years ago, didn't it?
someone has a larger pile of cash now
I look forward to Intel announcing that Apple is the major customer they hinted at having for their 14A process.
Didn't someone cancel the chips act...
I am very unhappy with the increased RAM prices - and now general increase in prices for hardware. To me this is collusion, a de-facto monopoly. Governments that don't stop this practice are also part of the mafia.
We really need many more smaller, more independent manufacturers. All the big guns, from NVIDIA, Apple, Intel, AMD, etc... have massively disappointed about 99.9% of us here now.
How about they take a break and focus on their software for the next 2 years?
One would think (hope / pray?) that a $4T company could walk and chew gum at the same time. But, apparently not.
Software quality is just canary in the coal mine that the company culture has changed and they will continue to enshittify their products.
Are you suggesting their semiconductor engineers should down tools and start fixing bugs in macOS?
Apple could afford building their own fab couldn't they?
oh, darn. my least favorite walled garden / vertical monopoly / rentseeker will have to raise prices. I'm sure they can spin this as a quality improvement.
It used to be „don’t use Wikipedia as an academic source“ now it’s the same wit ChatGPT
Quite the opposite actually, way too many people treat LLMs as oracles, all the while they are fundamentally unreliable at knowledge storage and retrieval. If there was legitimate doubt in the early days as to whether a collaborative encyclopedia could self organise and self censor into a reliable source, the engineering of LLMs makes the opposite a certainty.
what a strange world, guess iPhones will cost a million bucks now
Nvidia direct silicon revenue is higher.
Also Nvidia's margins are higher which means that they will be willing to pay a higher unit price.
This seems like an open and closed case from TSMC's side.
It also means that we will have a trouble buying new laptops for a few next years.
They will simply be more expensive.
More likely they will not use leading the leading edge fab process, which TBH is fine for the vast majority.
Prayers for Apple
ugh dark mode
The real loser in all of this is consumers. Pricing on software and hardware is going to continue to rise and rise.
Laughs in Intel.
Apple fabs?
It seems PC(mostly dx11/12)+console gaming is niche compared to mobile gaming (mostly on android which support linux/wayland/vulkan)
How much new capacity is under construction? Seems like it should be a lot, but other than Arizona and Ohio and a few other places I'm not reading about a ton of cutting-edge node fab construction happening.
I find that my cell phone which is 4 generations old and my desktop computer which is 2 generations old are totally adequate for everything I need to do, and I do not need faster processing
I used to think that.
I really don't care about most new phone features and for my laptop the M1 Max is still a really decent chip.
I do want to run local LLM agents though and I think a Mac Studio with an M5 Ultra (when it comes out) is probably how I'm going to do that. I need more RAM.
I bet I'm not the only one looking at that kind of setup now that was previously happy with what they had..
Apple has made some good progress on memory sharing over thunderbolt. If they could get that ironed out you maybe could run a good LLM on a cluster of Mac minis. Again you cannot today but people are working on it. One guy might have gotten it to work but it’s not ready for prime time yet.
> Apple has made some good progress on memory sharing over thunderbolt
The only reason that Thunderbolt exists is to expose DMA over an artificial PCI channel. I'd hope they've made progress on it, Thunderbolt has only been around for fourteen years after all.
But do you use any ai services like chat gpt, Claude, Gemini? If so you’re offloading your compute from a local stack to a high performance nvidia gpu stack operated by one of the big five. It’s not that you aren’t using new hardware, it’s that you shifted the load from local to centralized.
I’m not saying this is bad or anything, it’s just another iteration of the centralized vs decentralized pendulum swing that has been happening in tech since the beginning (mainframes with dumb terminals, desktops, the cloud, mobile) etc.
Apple might experience a slowdown in hardware sales because of it. Nvidia might experience a sales boom because of it. The future could very well bring a swing back. Imagine you could run a stack of Mac minis that replaced your monthly Claude code bill. Might pay for itself in 6mo (this doesn’t exist yet but it theoretically could happen)
> Imagine you could run a stack of Mac minis that replaced your monthly Claude code bill. Might pay for itself in 6mo (this doesn’t exist yet but it theoretically could happen)
You don't have to imagine. You can, today, with a few (major) caveats: you'll only match Claude from roughly ~6 months ago (open-weight models roughly lag behind the frontier by ~half a year), and you'd need to buy a couple of RTX 6000 Pros (each one is ~$10k).
Technically you could also do this with Macs (due to their unified RAM), but the speed won't be great so it'd be unusable.
Wonderful!
I wish I were in that situation, but I find myself able to use lots more compute than I have. And it seems like many others feel the same.
We have data, people are buying phones in aggregate about every 2.5 - 3 years. Especially in the US where almost no one pays for a phone outright
You are anecdote, not data.
Data is saying demand >>>>> supply.
Am I the only one who is excited about the AI bubble bursting?
"Am I the only one" posts are pure engagement farming.
Apple, now you know how it feels to be kicked out of the FabStore.
...and then China invades Taiwan, and nobody ain't getting nothing.
I feel like China invading Taiwan isn't happening in our lifetimes. Yes, they stand to benefit from it, but I doubt any of the people in charge of decision making are that interested in rocking the boat. There's nobody forcing their hand and the country is doing great without needing to invade anyone.
> Yes, they stand to benefit from it
They would benefit in what way?
Because their government seems to benefit a lot from Taiwan existing and being an enemy.
That depends on a certain administration, and it isn't looking good, "if they can, we also can".
Let's hope China doesn't get a leader like Donald Trump in our lifetimes, then I think your prediction will apply. Despite the political tensions, China and Taiwan are so deeply integrated economically that an invasion would hurt not only Taiwan and the global economy, but also China (directly and indirectly). The EU and the US are making efforts to re-shore some semiconductor manufacturing, but TSMC and others will probably still keep a sizable amount of manufacturing in Taiwan, so I don't think this interconnectedness will change anytime soon...
It seems that their leaders are and have been planning to take over Taiwan for decades. At least according to most of what I’ve read on the topic from all the various sources.
If or when China’s economic and/or demographics issues become problematic is exactly when the CCP likely would want to strike. At least seems to me like it’d be a good time to foment national pride.
Of course hopefully I’m wrong and you’re right.
Many of these larger geopolitical things are decades in the making. Even Trump’s Venezuela action has been a long time brewing. So much so that “US troops in Venezuela” has become a trope in military sci-fi. The primary change with Trump is how he presents and/or justifies it, or rather doesn’t.
"They stand to benefit from it" how!? The only thing they'll get is immediate geopolitical scorn which could very well escalate to mass military action considering how much TSMC now means for the world's economy. A single temporary shutdown of the fabs would mean a global economic apocalypse. They'd be inviting all powers of the world to attack them for no upside whatsoever, because it will all be over by the time they figure out how to leverage the fabs themselves.
I mean who would have put 'US talks about invading Greenland' on the list of bullshit we have to deal with.
2027 is the 100th anniversary of the Chinese Communist Party and they have publicly disclosed they want Taiwan re-united by then.
They are 100% going to force the issue.
It will likely be a naval plus air blockade to force a political solution to avoid the messiness of an invasion, but time is on China's side there.
Is time on their side?
Long term: demographics are worsening for China relative to now or 5 years ago.
Short term: China doesn’t yet have viable homegrown replacements for ASML, TSMC, etc.
Really short term: China blockading Taiwan and suffering the economic fallout would be much more painful than US blockading Cuba/Venezuela/etc.
A decisive kinetic action or a very soft political action, rather than a blockade seems more viable in the current state.
Atlantic? IDK if China even has aspirations to play World Police like the US. Military protection of things like their interests and the stability of Belt and Road, sure, but I don’t see China trying something like the Gulf War or OEF.
It’s very possible that they will be able to dominate South China Sea and their zone of the Pacific, even now, given the proximity advantages and ship/missile production; and I think that would be satisfactory to them.
20 years from now, China’s sphere and America’s sphere are separate, with China having a lead in competing for Africa, and Europe in a very weird place socially, economically, demographically, and WRT Russia/US competition.
That's exactly what the USA has been doing to Cuba since 1959 and they're still (barely) hanging around. If we go by that example, it'll only end with with an actual invasion (which is what will happen to Cuba within one to two years).
The leader of China literally publicly told his military to have “all options for reunification of Taiwan ready by 2027”
What options do you suppose the military might be working on? Training to surround, and blockade? (Check) Information warfare? (Check) Building high numbers of landing craft? (Check) Building high numbers of modular weapon systems that can rapidly increase the number of offensive ships? (Check) Building numerous high volume drone warfare ships and airborne launchers? (Check)
Keep in mind that there are public language cues that preceded invasion such as declarations of the invalidity of the other country’s sovereignty, declarations that the other country is already part of the invading country. Have you seen any signs of that?
Your persistent doubts require ignorance of strong evidence.
Wow, I knew China were full of it but 900 final warnings?!
This retarded meme gets posted about PRC bluffing but context behind it illustrates the opposite. The warnings were against US/TW based U2s overflights, which PRC was both warning and doing - actively attempting to shoot down despite having inferior capabilities. The chefs kiss that this is an USSR meme is that PRC shot down more U2s using modified soviet hardware than USSR herself. Even more so when consider PRC issued actual final warning to USSR that ended up in border skirmishes. PRC's actual final warning is "don't say we didn't warn you" which historically predicts PRC kinetic action with high certainty. USSR, India border skirmishes. Korean war against UN. PRC also has directly supported North Vietnam against the French, and threatened UK when they hinted at granting HK independence under Thatcher. That's every NPT nuclear state over territorial / security issues less important than TW. It doesn't always lead to immediate action, but has consistently been prelude to it.
The US has its own TSMC supply (insert comments about it not being cutting edge). And the US will stand-down and let China take Taiwan with no serious conflict in exchange for supply agreements. Not more than 5-10 years out at this point.
The US can't even remotely come close to stopping China in its own backyard today, in another 5-10 years they'll just have that much larger of a Navy. The US knows that's the situation. The US can supply a large one week bombing campaign against China and that's it, based on inventory levels. The US will exhaust its cruise missile supply instantly and the US has almost no meaningful drone-bomb supply. China can build cheap missiles by the tens of thousands perpetually, train them to the coast, and flatten Taiwan and any opponents as necessary. China is the only country that can sustain a multi-year WW2 style bombing campaign today, thanks to its manufacturing capabilities. Imagine them on a full war footing.
Yeah, I just don’t know that there’s the will to blow up the world economy for which flag flies over Taiwan.
China absorbing Taiwan (especially to Americans) just doesn’t seem like a radical, terrifying concept.
A Hong Kong style negotiated transfer might be best for the world - Taiwanese that want to leave can, the US can build up a parallel source of semiconductors, China gets Taiwan without firing a shot.
That didn't work out so well for Hong Kong.
Is it better than the alternative? Do you think TSMC wants to see a Dongfeng or ATACMS headed for their fab, if the alternative is a negotiated handover?
Better than it has for Ukraine.
> The US has its own TSMC supply (insert comments about it not being cutting edge)
USA has been strategically re-homing TSMC to the US mainland for a long time now. 30% of all 2nm and better technologies are slated to be produced in Arizona by 2030.
The real loser in all of this will be the EU which will be completely without the ability to produce or acquire chips. They'll just end up buying from China and USA, which will only further deepen their dependence on those countries.
Just because you haven't heard of it doesn't mean that the EU isn't doing anything: https://overclock3d.net/news/software/bringing_advanced_semi...
That's announcing 40k WSPMs of eventual capacity spread across 28nm and 16nm nodes. I mean, it's a start, and I'm sure automakers are totally stoked given the Nexperia debacle, but the EU will remain completely dependent on foreign advanced node semiconductors.
Compare to TSMC's Arizona project, which will supply 30% of TSMC's 2nm and smaller process output. Already just one of the six planned TSMC fabs in Arizona is pumping out ~30k WSPMs at 5nm or smaller.
And that doesn't even get into CoWoS packaging, which is essential for all the highest-performance and highest-margin parts.
The fact is: In semiconductors, Europe is getting left in the dust. Sure they can fab some mature node chips for industrial uses--and that's not nothing--but Smartphone SoCs, "AI" accelerators, DRAM, even boring CPUs simply cannot be made any more in Europe, and to the limited extent that they can, they will be horrendously uncompetitive on the market and outclassed in every performance metric by Chinese and American chips.
EU is on a big sovereignty kick right now, which makes sense given that their foreign dependencies keep blowing up in their faces. So it's strange that EU is so complacent about their foreign dependency on advanced node semiconductors.
Has the Ukraine situation not shown that the EU has relegated itself to second fiddle?
It’s too old, too complacent, and too broke. Even compared to the US and our level of discord, there’s no unity across divisions.
The US absurdly threatens Greenland, but Denmark/EU’s response is “Sanction US tech or kick out US military bases on Europe”, rather than be able to rattle a saber back and show some credible backbone.
> rather than be able to rattle a saber back and show some credible backbone.
They sent warships to Greenland. What level of saber rattling do you expect?
ASML...
xLight is coming up quickly... https://www.xlight.com/
ASML is a critical component, but they don't actually build the chips. And a significant part of their technology is developed in California anyway.
I think Taiwan invasion by China will happen after foundries are built in the UI.
My conspiracy theory is that there is some kind of "gentleman agreement" on this topic between the US and China.
As soon as Taiwan is not needed anymore by the US for chip fabrication, the US will at the very least loose their grip on it.
Note to commenters: that's my theory, does not mean I endorse it in any way.
Taiwan's TSMC foundries are their nuclear currency: they must keep them to remain protected by others, and yet the others didn't completely build interchangeable and resilient capacity elsewhere to do what essential for them that they had the money to do.
So now Apple, Nvidia, AMD (possibly), and most car manufacturers will be up a creek without a paddle when China invades in 1-2 years. That is unless China's Xi is bluffing to mollify domestic war hawks and reunification zealots by going through the motions of building an army of war machines without intent to use them, but I don't think that's probable. It's possible that Trump already made agreements with Xi to cede "Oceania" if they allow the US to take Greenland and South America for empire-building neocolonialism.
My main takeaway: TSMC's gross profit margin in Q4 was 62.3%. (Net profit margin about 48%, supposedly.)
I mean this is pretty fantastic.
[dead]
[dead]
[flagged]
[flagged]
[flagged]
If people want an AI to hallucinate for them they can do it themselves, thanks.
applesisters...
You could at least link to a Satania pic
Tim Cook failing on the Cook doctrine ("We believe that we need to own and control the primary technologies behind the products that we make") is ironic.
I'm sure if Apple could manage to run a fab with the quality and costs they get with TSMC, they would. I have little doubt they've been pushing forward on that mission.
Owning a leading edge fab is not practical for most companies, even huge some ones like Apple.
Intel has even struggled with it since they traditionally didn’t sell capacity to other buyers. It worked for Intel because they traditionally had a near-monopoly over the laptop, desktop, and server chip market.
Apple certainly has the money to spin up their own chip fabricator, but there’s no guarantee it would be as good as TSMC, it would cost billions, and they would have less of an ability to sell capacity to other customers.
At the end of that effort they could be left with a chip fab that produces chips that still cost the same or more than what TSMC manufactures them for. It might just be cheaper to try and outbid Nvidia for priority.
Apple already is in the process of moving "most" chip production to Texas Instruments in Sherman, TX.
https://appleinsider.com/articles/25/08/22/apple-chips-to-be...
Per that very article, Sherman will be for support chips for power and peripherals, on legacy 45nm+ nodes.
Apple's investing heavily in the TSMC fab in Arizona, due to open in 2027, to have 3nm capabilities for its flagship chips, but it's unlikely that would ever cover a majority of that chipmaking.
https://www.aztechcouncil.org/tucson-chipmaker-tsmc-arizona-...
https://wccftech.com/tsmc-plans-to-bring-3nm-production-to-t...
Karma’s a bit.
not a word?
Ha! Well if it isn't karma that has come for Apple.
(Apple is well known for shoving "lesser vendors" out of the way at TSMC)
Is it karma or is it just normal business activities? When you're a large player like this you get pricing power. If another large player moves in and also has pricing power then negotiations and things like that take place. Business deals, profits, &c. all ebb and flow and this is no different.
It is just normal business. At the end of the day money talks -- and only Nvidia has more money than Apple -- for now.
Apple doesn’t operate the fab, TSMC does. Apple doesn’t shove anyone out of the way, TSMC makes those decisions. It is weird to blame Apple.
Weird take. If you want to undertake approximately a bajillion dollars in capex to prove out and scale up a new node, it is extremely to have one massive, anchor customer who will promise well in advance to offtake basically the entire thing for a bit and who has creditworthiness exceeded by few non-sovereign entities, and thus is able to write contracts against which it is easy to lend. Also this customer makes little chips (when your defect rate is higher) and bigger chips (when your defect rate is lower). Of course you don't try to synthesize this profile out of a bajillion tiny customers.
so if you win an ebay auction, did you shove "lesser people" out of the way?
Hey Apple, how does it feel?
feels pretty good. thanks for asking
customers will pay the bill so it doesn't matter
pft Emotional intelligence damage ,, instant karma pov: apple be like
Well, someone is tasting a bit of their own medicine.
Hopefully this makes them think twice about I dunno, putting chips into cables.
I think you are referring to thunderbolt cables with their signal conditioning chips, and if that’s the case then I would like to say that TSMC isn’t making those chips. Afaik Intel and maybe some others make the chips that go into thunderbolt cables.
Putting computers into cars was the real killer.
Of course they did stock buybacks instead of using their mountains of cash to lock out the competition or keeping their powder in reserve. Brilliant!
Pepperidge Farm remembers when stock buy backs were illegal stock manipulation
Stock buy-backs can be part of an illegal scheme but, in general, they are one of the few mechanisms in corporate actions through which the regular joe shareholder doesn't get the short end of the stick.
How is owning a larger share of a company with proportionally less cash and a higher price per share than what you could have sold it for before bad.
Have you looked at precious metal charts as of late? Do 1/x and that's the value of the cash these companies are trading for a valuable business.
So let's say TMSC reciprocated Apple's consistency as a customer by giving them preferential treatment for capacity. It's good business after all.
However, everyone knows that good faith reciprocity at that scale is not rewarded. Apple is ruthless. There are probably thousands of untold stories of how hard Apple has hammered it's suppliers over the years.
While Apple has good consumer brand loyalty, they arguably treat their suppliers relatively poorly compared to the Gold standard like Costco.
At this scale and volume, it's not really about good faith.
Changing fabs is non-trivial. If they pushed Apple to a point where they had to find an alternative (which is another story) and Apple did switch, they would have to work extra hard to get them back in the future. Apple wouldn't want to invest twice in changing back and forth.
On the other hand, TSMC knows that changing fabs is not really an option and Apple doesn't want to do it anyway, so they have leverage to squeeze.
At this level, everyone knows it's just business and it comes down to optimizing long-term risk/reward for each party.
Apple has used both Samsung and TSMC for its chips in the past. Until the A7 it was Samsung, A8 was TSMC, and the A9 was dual-sourced by both! Apple is used to switching between suppliers fairly often for a tech company; it's not that it's too hard for them to switch fab, it's that TSMC is the only competitive fab right now.
There are rumours that Intel might have won some business from them in 2 years. I could totally see Apple turning to Intel for the Mac chips, since they're much lower volume. I know it sounds crazy, we just got rid of Intel, but I'm talking using Intel as a fab, not going back to x86. Those are done.
Job's thermonuclear threats were about Android & Google, not Samsung because Schmidt was on Apple's board during the development of Android.
> "I will spend my last dying breath if I need to, and I will spend every penny of Apple’s $40 billion in the bank, to right this wrong. I’m going to destroy Android, because it’s a stolen product. I’m willing to go thermonuclear war on this."
The falling out with Samsung was related, but more about the physical look of the phone
If Samsung (or any other fab) were to make Apple chips they wouldn’t learn anything that a good microscope couldn’t already tell them.
Samsung still makes the displays and the cameras for most iPhones. They continued to do business even while engaged in legal action. That they are still competitors wont stop them doing business when it suits them. Business doesn’t care about pride or loyalty; only money.
Doesn't seem likely, TBH. Nevermind the legal agreements they would be violating, TSMC fabs Qualcomm's Snapdragon line of ARM processors. The M1 is good, but not that good (it's a couple generations old by this point, for one). Samsung had a phone line of their own to put it in as well. TSMC does not.
Which but is false? Samsung definitely did manufacture Apple chips.
Common manufacturer Samsung[2]
https://en.wikipedia.org/wiki/TSMC
Apple A6 which is fabricated with Samsung 32 nm HKMG (Hi dielectric K, Metal Gate) CMOS process
https://www.ifixit.com/Teardown/Apple+A6+Teardown/10528
TSMC holds the real power. Apple’s stability and Nvidia’s cash both matter but AI demand is distorting the entire semiconductor ecosystem. There are no easy exits. Building fabs, switching suppliers or waiting out the cycle all carry massive risk.
In the long run, competition (where via Intel, Samsung or geopolitical diversification) is the only path that benefits anyone other than TSMC
Then why are they switching from Sony to Samsung for custom camera sensors for the next iPhone?
Why do they keep using Samsung for their customized screens despite LG and Chinese competitors being competitive?
wait til you find out who supplies iPhone screens.
At the end of the month, laptops with Intel's latest processors will start shipping. These use Intel's 18A process for the CPU chiplet. That makes Intel the first fab to ship a process using backside power delivery. There's no third party testing yet to verify if Intel is still far behind TSMC when power, performance and die size are all considered, but Intel is definitely making progress, and their execs have been promising more for the future, such as their 14A process.
Apple is the company that just over 10 years ago made a strategic move to remove Intel from their supply chain by purchasing a semiconductor firm and licensing ARM. Managing 'painful' transitions is a core competency of theirs.
I think you’re correct that they’re good at just ripping the band-aid off, but the details seem off. AFAIK, Apple has always had a license with ARM and a very unique one since they were one of the initial investors when it was spun out from Acorn. In fact, my understanding is that Apple is the one that insisted they call themselves Advanced RISC Machines Ltd. because they did not want Acorn (a competitor) in the name of a company they were investing in.
Which acquisition are you referring to? Apple bought PA Semi in 2008 and Intrinsity in 2010.
Not all of Apple‘s chips need to be fabbed at the smallest size, those could certainly go elsewhere. I’m sure they already do.
Is there anyone who can match TSMC at this point for the top of the line M or A chips? Even if Intel was ready and Apple wanted to would they be able to supply even 10% of what Apple needs for the yearly iPhone supply?
>On the other hand, TSMC knows that changing fabs is not really an option and Apple doesn't want to do it anyway, so they have leverage to squeeze.
They're Apple. If TSMC fucks around too much, they might just start working towards building their own fab.
I would imagine they could split their orders between different fabricators; they can put in orders for the most cutting edge chips for the latest Macs and iPhones at TSMC and go elsewhere for less cutting edge chips?
presumably they already do that (since non cutting edge chip fab is likely to be more competitive and less expensive) so, given they are already doing that, this problem refers to the cutting edge allocations which are getting scare as exemplified at least by Nvidia's growth
It's ridiculous that a trillion dollar company feels beholden to a supplier. With that kind of money, it should be trivial to switch. People forget Nvidia didn't even exist 35 years ago. It would probably take like 3 to 5 years to catch up with the benefit of hindsight and existing talent and tools?
And anyway consumers don't really need beefy devices nowadays. Running local LLM on a smartphone is a terrible idea due to battery life and no graphics card; AI is going to be running on servers for quite some time if not forever.
It's almost as if there is a constant war to suppress engineer wages... That's the only variable being affected here which could benefit from increased competition.
If tech sector is so anti-competitive, the government should just seize it and nationalize it. It's not capitalism when these megacorps put all this superficial pressure but end up making deals all the time. We need more competition, no deals! If they don't have competition, might as well have communism.
It can be interpreted a different way too. Apple is just a channel for TSMCs technology. Also the cost to build a fab that advanced, in say a 3 year horizon, let alone immediately available, is not one even Apple can commit to without cannibalising its core business.
I'm joking yes but as an engineer who has seen the bureaucracy in most big tech companies, the joke is getting less funny over time.
I've met many software engineers who call themselves communists. I can kind of understand. This kind of communist-like bureaucracy doesn't work well in a capitalist environment.
It's painful to work in tech. It's like our hands are tied and are forced to do things in a way we know is inefficient. Companies use 'security' as an excuse to restrict options (tools and platforms), treat engineers as replaceable cogs as an alternative to trusting them to do their job properly... And the companies harvest what they sow. They get reliable cogs, well versed in compliance and groupthink and also coincidentally full-blown communists; they're the only engineers remaining who actually enjoy the insane bureaucracy and the social climbing opportunities it represents given the lack of talent.
>If tech sector is so anti-competitive, the government should just seize it and nationalize it.
Trump is using his DOJ to probe Jerome Powell with a bogus lawsuit because the Fed won't lower rates on demand.
An independent Fed is the most important body for the USA. Lowering rates should be based on facts, not dictated by some bankrupt casino CEO. And now you want our government to nationalize the tech sector?
About 17 years ago I worked at a company that was clamoring to get products into Costco, when we did I was shocked at the fees they charged us for returns. If they're the gold standard for supplier relations it's a wonder anyone bothers being a supplier.
You were shocked that they didn't absorb the cost of your shipping mistakes?
Apple loaned TSMC money in order to build manufacturing capacity back around the M1 era. They’ve done that for a number of suppliers and the “interest payments” were priority access to capacity. Everyone was complaining about how Apple got ARM chips while others had to wait in line.
That said, they did that for a sapphire glass supplier for the Apple Watch and when their machines had QC problems they dropped them like a rock and went back to Corning.
But is that really any different from any other supplier? And who tf do you think they’re going to drop TSMC for right now? They are the cock of the walk.
> And who tf do you think they’re going to drop TSMC for right now?
Don't look now: https://www.macrumors.com/2025/11/28/intel-rumored-to-supply...
If Apple cares about their Softbank investment, the best possible outcome is that Intel copies their IP wholesale. Arm's white whale is Intel buying an architectural license, which they have zero incentive to do unless someone gives them an off-the-shelf core design that doesn't suck.
The modern Cortex and Infiniverse designs are so pathetic that RISC-V might mature by the time ARM is the industry standard. And the smaller ARM IP hasn't been profitable since China mass-produced the clones. Courting Intel into buying an architectural license with a free IP bonus is a legitimately smart move for ARM's longevity, from Apple's POV.
Counter argument is that is NVIDIA friendly to their supply chain? I have to think that maybe they are with their massive margins because they can be - their end buyer is currently willing to absorb costs at no expense. But I don't know, and that will change as their business changes.
Your underlying statement implies that whoever is replacing apple is a better buyer which I don't think is necessarily true.
Nvidia is famously a pain to work with. Apple vowed never to use their chips, Microsoft and Sony can't get them to make any GPU for their consoles.
The only complete package integrator that manages to make a relationship work with Nvidia is Nintendo.
> Apple vowed never to use their chips
I thought that was mainly due to bad thermals. I always got the impression that (like Intel) Nvidia only cared about performance, and damn the power consumption.
EVGA outright gave up on selling GPUs rather than continue working with NVidia.
And also the Switch 1 was just the hardware for a nvidia shield tablet from nVidia’s perspective, without the downside of managing the customer facing side and with the greater volume from Nintendo’s market reach. (Not that it wasn’t more than that for consumers or Nintendo, just talking nvidia here)
I think that works out tremendously well for Nintendo, especially when you look at the Wii-U vs the Switch.
I shot a video at CNET in probably 2011 which was a single touchscreen display (i think it was the APX 2500 prototype iirc?) and it has the precise dimensions to the switch 1.
Nintendo was reluctantly a hardware company... they're a game company who can make hardware, but they know they're best when they own the stack.
> EVGA Terminates Relationship With Nvidia, Leaves GPU Business
> According to Han, Nvidia has been difficult to work with for some time now. Like all other GPU board partners, EVGA is only told the price of new products when they're revealed to everyone on stage, making planning difficult when launches occur soon after. Nvidia also has tight control over the pricing of GPUs, limiting what partners can do to differentiate themselves in a competitive market.
https://www.gamespot.com/articles/evga-terminates-relationsh...
Funnily enough Apple and Nvidia has old beef with one another, this especially led them to sever ties:
https://www.semiaccurate.com/2010/07/11/investigation-confir...
If your customers are known to be antagonistic to business partners, the correct answer is to diversify them as much as you can, even at reasonable costs from anything else.
That means deprioritizing your largest customer.
Yep, you can be close allies with a nation and have many shared interests, and even a trade deficit with them as we in Britain did, and then they stab you in the back with tariffs.
Even if Apple isn't very good at reciprocating faithful service from its suppliers, there's also the matter of how it treats suppliers who cause it problems instead.
Costco does not treat their suppliers well.
Do you have a source for this? Most information I’ve seen around this (e.g. Acquired podcast, from the Costco side) claims strong positive relationships.
Suppliers really hate working with Costco. They're slow to pay, allow for only small margins, and often need too high of a percentage of a businesses revenue, all of which is not friendly towards suppliers.
Not true at all. Costco uses the industry-standard Net 60 for supplier payment.
Companies have to be fairly large to be Costco suppliers. What suppliers lose in margin they more than make up for in scale. It's better to sell 10 million at 5% margin than 1 million at 10% margin.
And they don't require a % of supplier's business revenue as that would be illegal in the U.S. Most of the products found at Costco are generally found at other retailers, just in smaller packages or as different SKUs.
Agreed TSMC can do whatever they want. in 2027 no other fabs will match what tsmc has today, anything that requires the latest process node is going to get more expensive, so your apple silicone and your AMD chips
As of today Intel is very around leading node
yield is more important than leading node.
I'll believe it when I see it (at scale). I hope 18A is good enough as competition is good, and a weak Intel is bad for us all.
No public company will be loyal or nice to their suppliers. That is just not in the playbook for public companies. They have "fiduciary duty", not human duty.
Private companies can be nice to their suppliers. Owners can choose to stay loyal to suppliers they went to high school with, even if it isn't the most cost-efficient.
> they arguably treat their suppliers relatively poorly compared to the Gold standard like Costco.
I’m not saying you’re wrong but you’re previous paragraph sounding like you were wondering if it was the case vs. here you’re saying it’s known. Is this all true? Do they have a reputation for hammering their suppliers?
Apple is so notoriously ravenous for profit margin that they can’t not be that way.
It felt like a more confident statement and I was legitimately asking. I have little love for Apple. Ditched my Mac Studio earlier this year for a Linux only build after 20 years of being on Macs. I say this because I think folks think I am trying to sealion/“just ask questions:tm:” or some nonsense, when I am legitimately asking if this is a documented practice and what the extent is. I am not finding it easy to find info on this.
Apple dealt exclusively with Chinese labor prices until they were directly threatened by the POTUS. You tell me.
https://www.bbc.com/news/articles/c86jx18y9e2o
Apple has responded and has started moving a lot of manufacturing out of China. It just makes sense for risk management.
It would be a $6000 phone if they built it in America.
I've seen the leaked BOMs, I'm not dumb enough to think that Americans can match it.
I tend to agree with you, feels to me like the root of this is essentially whether foundries will "go all in" on AI like the rest of the S&P 500. But why trade away one trillion-dollar customer for another trillion-dollar customer if the first one is never going away, and the second one might?
I think it is less of a trade and more of a symbiotic capital cycle, if I can call it that?
Nvidia's willingness to pay exorbitant prices for early 2nm wafers subsidizes the R&D and the brutal yield-learning curve for the entire node. But you can't run a sustainable gigafab solely on GPUs...the defect density math is too punishing. You need a high-volume, smaller-die customer (Apple) to come in 18 months later, soak up the remaining 90% of capacity and amortize that depreciation schedule over a decade.
Isn’t the smaller die aspect more valuable early in the node’s maturity, where defects are less punishing?
I am curious about the binning factor too since in the past, AMD and Intel have both made use of defect binning to still sell usable chips by disabling cores. Perhaps Apple is able to do the same with their SoCs? It's not likely to be as granular as Nvidia who can disable much smaller areas of the silicon for each of their cores. On the other hand, the specifics of the silicon and the layout of the individual cores, not to mention the spread of defects over the die might mitigate that advantage.
I thought they binned CPUs for things like AppleTV and lower cost iPads?
With current AI pricing for silicon, I think the math’s gone out the window.
For Apple, they have binning flexibility, with Pro/Max/Ultra, all the way down to iPads - and that’s after the node yields have been improved via the gazillion iPhone SoC dies.
NVIDIAs flexibility came from using some of those binned dies for GeForce cards, but the VRAM situation is clearly making that less important, as they’re cutting some of those SKUs for being too vram heavy relative to MSRP.
Why are foundries going 'All In' on AI? They fab chips for customers, doesnt matter what chips they are and who the customer is.'Who will pay the most for us to make their chips first' is the only question TMSC will be asking. The market of the customer is irrelevant.
AI capex may or may not flatten in the near future (and I don't necessarily see a reason why it would). But smartphone capex already has.
Like smartphones, AI chips also have a replacement cycle. AI chips depreciate quickly -- not because the old ones go bad, but because the new ones are so much better in performance and efficiency than the previous generation. While smartphones aren't making huge leaps every year like they used to, AI chips still are -- meaning there's a stronger incentive to upgrade every cycle for these chips than smartphone processors.
> AI chips depreciate quickly -- not because the old ones go bad
I've heard that it's exactly that, reports of them burning out every 2-3 years. Haven't seen any hard numbers though.
Lifetime curve is something they can control. If they can predict replacement rate, makes sense to make chips go bad on the same schedule, saving on manufacturing costs.
Nvidia have been using TSMC since the Riva 128. That's before Apple started making any of their own silicon. GPUs are easily as predictable as mobile phones.
> GPUs are easily as predictable as mobile phones
They really, absolutely, are not.
It's not about "will there be a new hardware", it's about "is their order quantity predictable"
> the smartphone replacement cycle is the only predictable cash flow
people are holding onto their phones for longer: https://www.cnbc.com/2025/11/23/how-device-hoarding-by-ameri...
Still more predictable than GPU buys in the current climate. Power connector melting aside, GPUs in most cases get replaced less frequently than cell phones, unless of course you have lots of capital/profit infusion to for whatever reason stay ahead of the game.
Heck if Apple wanted to be super cheeky, they could probably still pivot on the reserved capacity to do something useful (e.x. revised older design for whatever node they reserved where they can get more chips/wafer for cheaper models.)
NVDA on the other hand is burning a lot of good-will in their consumer space, and if a competitor somehow is able to outdo them it could be catastrophic.
Yea, it’s anecdata, but I only replaced my 1080 ti about 1.5 years ago.
Graphical fidelity is at the point that unless some new technology comes out to take advantage of GPUs, I don’t see myself ever upgrading the part. Only replacing it whenever it dies.
And that 1080 ti isn’t dead either, I passed the rig onto someone who wanted to get into PC gaming and it’s still going strong. I mostly upgraded because I needed more ram and my motherboards empty slots were full of drywall dust.
The phone I’m more liable to upgrade solely due to battery life degradation.
That's a really hilarious take given Nvidia's history with TSMC.
I would also bet significant money that Apple's unique market position will give them the confidence to invest in in-house fabrication before 2030.
Would it be feasible for them to buy Intel instead? Starting your own foundry would likely take over a decade.
Yup; or potentially just purchasing a fab from them, given that Intel has signaled they want to leverage TSMC more, and much of Intel's remaining value is wrapped up in server-grade chips that Apple wouldn't be interested in.
But also; Apple is one of the very few companies at their size that seems to have the political environment to make, and more importantly succeed, at decade investments. The iPhone wasn't an obvious success for 5 or 6 years. They started designing their own iPhone chips ~the iPhone 4 iirc, and pundits remarked: this isn't a good idea; today, the M5 in the iPad Pro outperforms every chip made by EVERYONE else in the world, by 25%, at a tenth the power draw and no active cooling (e.g. 9950X3D). Apple Maps (enough said). We're seeing similar investments today, things we could call "failures" that in 10 years we'll think were obviously going to be successful (cough vision pro).
> Apple is one of the very few companies at their size that seems to have the political environment to make, and more importantly succeed, at decade investments.
Definitely! But I'd recon they would want to bootstrap that part of their supply chain as soon as possible? Say China does invade Taiwan, suddenly their main supplier is gone and the Intel capacity mostly goes to military and other high margin segments. If they instead own Intel they not only control the narrative but also capitalize on the increase in Intel's value.
> the M5 in the iPad Pro outperforms every chip made by EVERYONE else in the world
No, it does not. The core inside the M5 is faster than every other core design in single-threaded burst performance. That is common for small machines with a low core count and no hyperthreading.
The chip itself does not outperform every other chip in the world, nor is it 10x more efficient than the 9950X3D. That's not even napkin math at that point, you're making up numbers with no relation to relevant magnitude.
Very much this.
Apple has to price in the risk of the US government forcing their hand in various ways. They have a negotiating disadvantage.
On the other hand, it's not like Apple can just switch fabs without any cost or difficulty. Sure, TSMC is undoubtedly happy to have a customer with predictable needs, but Apple is also subject to some level of lock-in.
Regardless of that, fab industry is based on a short and mid term auction-like planning.
If Nvidia pays more, Apple has to match.
> Regardless of that, fab industry is based on a short and mid term auction-like planning
Not a system that necessarily works all that well if one player has a short-term ability to vastly outspending all the rest.
You can't let all your other customers die just because Nvidia is flush with cash this quarter...
> die
Is the argument that Apple will go out of business? AAPL?
Wait,
> one player has a short-term ability to vastly outspending all the rest.
I assure you, Apple has the long-term and short-term ability to spend like a drunken sailor all day and all night, indefinitely, and still not go out of business. Of course they’d prefer not to. But there is no ‘ability to pay’ gap here between these multi-trillion-dollar companies.
Apple will be forced to match or beat the offer coming from whoever is paying more. It will cost them a little bit of their hilariously-high margins. If they don’t, they’ll have to build less advanced chips or something. But their survival is not in doubt and TSMC knows that.
That's exactly how it is supposed to work and Apple has outspent competitors for ages getting prio.
TSMC isn't running a charity, it sells capacity to the highest bidder.
Of course customers as big as Apple will have a relationship and insane volumes that they will be guaranteed important quotes regardless.
I mean, these things are likely already written down and Apple still gets lots of capacity for the reasons you mention.
But Nvidia has also spent billions/year in TSMC for more than a decade and this just keeps increasing.
> Not a system that necessarily works all that well if one player has a short-term ability to vastly outspending all the rest.
Well yeah, people were identifying that back when Apple bought out the entirety of the 5nm node for iPhones and e-tchotchkes. It was sorta implicitly assumed that any business that builds better hardware than Apple would boot them out overnight.
It's not that, either. Low-margin, high-volume contracts are the worst business you can take. It devalues TSMC's work and creates an unnatural downward force on the price of cutting-edge silicon. By ignoring Apple's demands they're creating natural competition that raises the value of their entire portfolio.
It really is about making better hardware. Apple would be out-bidding Nvidia right now, but only if the iPhone had equivalent value-add to Nvidia hardware. Alas, iPhones are overpriced and underpowered, most people will agree.
I doubt that we will hit diminishing returns in AI. We still find new ways to make them faster or cheaper or better or even train themselves...
The flat line prediction is now 2 years old...
I thought the prediction was that the scaling of LLMs making them better would plateau, not that all advancement would stop? And that has pretty much happened as all the advancements over the last year or more have been architectural, not from scaling up.
Feels like top of s curve lately
You say that, but to me they seem roughly the same as they've been for a good while. Wildly impressive technology, very useful, but also clearly and confidently incorrect a lot. Most of the improvement seems to have come from other avenues - search engine integration, image processing (still blows my mind every time I send a screenshot to a LLM and it gets it) and stuff like that.
Sure maybe they do better in some benchmarks, but to me the experience of using LLMs is and has been limited by their tendency to be confidently incorrect which betrays their illusion of intelligence as well as their usefulness. And I don't really see any clear path to getting past this hurdle, I think this may just be about as good as they're gonna get in that regard. Would be great if they prove me wrong.
"Apple is smart. If the AI capex cycle flattens in late '27 as models hit diminishing returns, does Apple regain pricing power simply by being the only customer that can guarantee wafer commits five years out?"
That's the take I would pursue if I were Apple.
A quiet threat of "We buy wafers on consumer demand curves. You’re selling them on venture capital and hype"
Why should that change TSMC decision making even a little?
The reality is that TSMC has no competition capable of shipping an equivalent product. If AI fizzles out completely, the only way Apple can choose to not use TSMC is if they decide to ship an inferior product.
A world where TSMC drains all the venture capital out of all the AI startups, using NVidia as an intermediary, and then all the bubble pops and they all go under is a perfectly happy place for TSMC. In these market conditions they are asking cash upfront. The worst that can happen is that they overbuild capacity using other people's money that they don't have to pay back, leaving them in an even more dominant position in the crash that follows.
Because apple can play hard(er) ball in 12 or 18 or 24 months when this (likely) irrational spend spree dies?
Business is a little more nuanced than this audience thinks, and it’s silly to think Apple has no leverage.
Except AMD would be happy to take up any excess unused capacity that TSMC has to compete with Intel and nVidia.
Nvidia is not a venture capital outlet. They are a self-sustaining business with several high-margin customers that will buy out their whole product line faster than any iPhone or Mac.
From TSMC's perspective, Apple is the one that needs financial assistance. If they wanted the wafers more than Nvidia, they'd be paying more. But they don't.
> several high-margin customers
This is the "venture capital and hype" being referred to, not Nvidia themselves.
Thanks. I didn't think my comment was super nuanced.
But Nvidia wasn't able to compete with Apple for capacity on new process nodes with Nintendo volumes (the concept is laughable; compare Apple device unit volumes to game console unit volumes). What has changed in the semiconductor industry is overwhelming demand for AI focused GPUs, and that is paid for largely with speculative VC money (at this point, at least; AI companies are starting to figure out monetization).
[flagged]
Louis Vuitton didn't make 18% of all handbags in 2024.