alt Hacker NewsApple is fighting for TSMC capacity as Nvidia takes center stage
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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.
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)
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.
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 fan with additional available capacity.
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...
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.
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...
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.
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.
I thought this got sorted out with giant piles of cash several years ago, didn't it?
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.
I look forward to Intel announcing that Apple is the major customer they hinted at having for their 14A process.
How about they take a break and focus on their software for the next 2 years?
How the turn tables
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.
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.
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.
what a strange world, guess iPhones will cost a million bucks now
It used to be „don’t use Wikipedia as an academic source“ now it’s the same wit ChatGPT
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.
Prayers for Apple
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?
Am I the only one who is excited about the AI bubble bursting?
Karma’s a bit.
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.
ugh dark mode
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
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.
...and then China invades Taiwan, and nobody ain't getting nothing.
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applesisters...
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.
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)
pft Emotional intelligence damage ,, instant karma pov: apple be like
Hey Apple, how does it feel?
Well, someone is tasting a bit of their own medicine.
Hopefully this makes them think twice about I dunno, putting chips into cables.
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!
Here's what G AI estimates when asked about "base on public data, estimate how many mm^2 of apple/Nvdia silicon are produce in TSMC for the past 3 years."
Apple:
2023 A16, A17 Pro, M2, M3 ~330M ~135 ~4,455M
2024 A17 Pro, A18, M3, M4 ~350M ~150 ~5,250M
2025 A18, A19 (pre-launch), M4 ~415M ~200 ~8,300M
NV:
2023 Ada (RTX 40), Hopper ~60M ~280 ~1,680M
2024 Hopper (H100), Blackwell ~85M ~450 ~3,825M
2025 Blackwell (B200), Rubin ~105M ~775 ~8,135M
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?