alt Hacker NewsAt 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.
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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.
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?
Apple knows first hand how difficult and expensive it is to fire your CEO, I mean chip fab, only to rehire them when its clear that decision didn't pan out.
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?
I think this misses a key point. TSMC is leading edge. When Apple switched they were leading edge for pure play, but not far ahead of Samsung and certainly behind Intel. Now not only TSMC is the best, it is also the largest. Which means Apple don't have a choice.
It the old days the leverage was that without Apple, no one is willing to pay for leading edge foundry development, at least not enough money to make it so compared to Apple. Now it is different. The demands for AI meant plenty of money to go around. And Nvidia is the one to beat, not Apple any more. The good thing for Apple is that as long as Nvidia continues to grow, their order can be spilt between them. No more relying on single vendor to pus.
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.
>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.
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.