TL;DR
A report says TSMC has told Apple it must accept significant price increases and also compete for production slots as AI-driven GPU demand from customers like NVIDIA and AMD grows. The shift reflects rising foundry pricing power and has prompted renewed talk of Apple diversifying its chip supply chain.
What happened
A Culpium report by Tim Culpan, citing sources, says TSMC CEO CC Wei warned Apple during an August visit that the company would need to accept the largest price increase in years. The article notes TSMC has been telegraphing higher prices in recent earnings calls and that its rising gross margins point to stronger pricing power. Sources told the reporter that Apple’s former dominance among TSMC customers is diminishing: the AI boom has increased demand for GPUs from firms such as NVIDIA and AMD, and those GPUs occupy more wafer area, forcing Apple to compete for capacity across TSMC’s nearly two dozen fabs. The piece also references earlier reports that the upcoming A20 chip could cost Apple more under TSMC’s pricing and mentions recurring rumors about Apple exploring renewed chip manufacturing talks with Intel. The report stops short of definitive outcomes for device pricing or supply arrangements.
Why it matters
- Higher foundry prices could raise Apple’s chip costs and compress margins or lead to higher device prices.
- Growing GPU demand from AI customers is changing how TSMC allocates wafer capacity, reducing guaranteed slots for legacy clients.
- If Apple cannot secure preferred fab capacity, it increases the urgency for supply-chain diversification.
- Shifts in customer ranking at TSMC could influence industry sourcing strategies and competitive dynamics for advanced nodes.
Key facts
- Report by Tim Culpan at Culpium relays sourced details about TSMC and Apple discussions.
- TSMC CEO CC Wei reportedly told Apple executives in August that Apple must accept a major price rise.
- TSMC has been signaling price hikes in earnings calls and its gross margins have grown, per the report.
- AI-driven GPU demand from companies such as NVIDIA and AMD is taking more wafer area per chip, affecting capacity.
- Apple’s chips are no longer guaranteed placement across TSMC’s nearly two dozen fabrication plants, according to the report.
- A China Times item previously suggested Apple’s forthcoming A20 chip would cost Apple more due to TSMC price increases.
- There have been multiple reports suggesting Apple and Intel are exploring renewed chip-production collaboration.
- The report says no one expects Apple to abandon TSMC entirely, but Apple may now need greater supply diversification.
What to watch next
- Whether iPhone 18 pricing reflects higher chip costs — not confirmed in the source
- Any formal announcements of deeper Apple-Intel chip production partnerships — not confirmed in the source
- TSMC’s next earnings calls and public comments on pricing and capacity allocation
- Reports on how GPU volume from AI customers affects TSMC fab scheduling and customer rankings
Quick glossary
- TSMC: A semiconductor foundry based in Taiwan that manufactures chips designed by other companies.
- GPU: Graphics processing unit, a type of processor often used for rendering graphics and accelerating AI workloads; it can occupy significant wafer area in chip production.
- Wafer: A thin slice of semiconductor material on which multiple integrated circuits are fabricated before being cut into individual chips.
- Fab: Short for fabrication plant, a factory where semiconductor wafers are processed into finished chips.
Reader FAQ
Is Apple still TSMC’s largest customer?
The report says Apple may no longer be TSMC’s largest client but does not present definitive confirmation.
Will Apple stop using TSMC for its chips?
According to the report, industry observers do not expect Apple to abandon TSMC entirely.
Are TSMC’s price increases confirmed?
The report states CC Wei told Apple the company would face the largest price rise in years and that TSMC has signaled hikes in earnings calls.
Will the iPhone 18 be more expensive because of this?
The report suggests higher chip costs could be a factor if iPhone 18 prices rise, but it does not confirm any pricing for the device.
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Sources
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