Apple’s Potential Shift from TSMC to Intel: What It Means for the Future

Apple and TSMC have had a strong partnership, with TSMC being the sole supplier of Apple’s systems-on-a-chip since 2016. The collaboration began in 2014, with Samsung also supplying chips in 2015.

Recently, Apple has been considering diversifying its processor suppliers beyond TSMC, possibly due to TSMC’s increased business with Nvidia and other AI companies.

Intel Inside… Again?

While the report did not specify potential suppliers, there have been talks of Apple discussing with Intel to provide lower-end processors by 2027 or 2028.

Supply chain analyst Ming-Chi Kuo suggested that Intel could start shipping Apple’s lower-end M processor by 2027, indicating a possible partnership for Mac and iPad models.

Intel might also supply chips for non-Pro iPhone models by 2028, potentially fabricating the A22 or A23 processors for Apple.

Apple is expected to retain control over chip designs, with Intel focusing on manufacturing the silicon, a shift from using Intel-designed X86 processors in the past.

Intel’s shift to a “Foundry Services” model aims to attract customers like Apple for chip fabrication, aligning with Apple’s transition to its own Apple silicon platform for Mac devices.

The AI Tax: Beyond Processors

As Apple delves deeper into artificial intelligence, it seeks to diversify its supply chain due to increasing competition and rising component costs.

Nvidia has emerged as a major customer for TSMC, challenging Apple’s wafer volume supremacy for advanced nodes.

Apple faces cost pressures from suppliers like Samsung and SK Hynix for RAM and NAND memory chips, impacting its margins.

During an earnings call, Apple CEO Tim Cook acknowledged the impact of rising RAM and storage chip prices on the company’s gross margin, prompting consideration of strategies to mitigate future cost impacts.