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From the outside, having Apple securing the latest and greatest nodes for so long feels kind of anti-competitive. Apple has been selling phones and laptops wit

From the outside, having Apple securing the latest and greatest nodes for so long feels kind of anti-competitive. Apple has been selling phones and laptops with N5 for two years and I don't think we still have any competing product in the hands of consumers using N5 yet. If I'm not mistaken Nvidia and AMD are about to release products using N5.

klelatti 4y ago
We probably have 3nm production on this timescale because of the long term relationship between Apple and TSMC and the $100bn + that Apple have spent with TSMC over that time period. No one else has done this. Apple pays the money and takes the risks, so they get the rewards.
- ohgodplsno 4y ago
  "Takes the risks" Takes what risks ? Buying the riskless new transistors that TSMC puts out because they know that they work ? Apple taking risks would be making the chips themselves (see: the failure that was itanium and how it screwed Intel because they had to reorganize their facilities for it), not buying it wholesale and just having TSMC print it.
  - klelatti 4y ago
    The risk that TSMC doesn't deliver on node improvements / deliver the relevant SoCs in the required numbers. And if you think that risk is small / nil I would point you to Intel's recent track record. And just to point out that Apple actually does bear the risk you've highlighted as Itanium was a design (which Apple does) not a manufacturing failure.
    - lotsofpulp 4y ago
      There is also risk that sufficient consumers do not want to buy Apple’s products at a sufficient price premium to offset the price premium that Apple paid to TSMC.
      - klelatti 4y ago
        Good point!
      - ohgodplsno 4y ago
      - wmf 4y ago
        For a specific recent example of this risk we can look at Nvidia who put down huge deposits for N4 wafers and now doesn't have enough customer demand for those chips.
    - ohgodplsno 4y ago
      - colinmhayes 4y ago
        > Oh no, the company that never failed a delivery might fail the delivery! Such a risk You could say the same thing about Intel until they blew it with 10nm. Who knows what the future holds
        klelatti 4y ago
        Exactly. Also blaming Intel's process problems on Itanium (discontinued 2011) is - well an interesting perspective!
  - deleted 4y ago
    [deleted]
  - Tagbert 4y ago
    One risk comes from the long lead times of chip design and production. They are committing to a design and process and hoping that production can occur on time and in the right volume to meet there needs. That is not a certainty and a delay could be very expensive since product releases are tied to the new chips.
gjsman-1000 4y ago
From a (slightly) insider perspective, companies that want the latest node actually pay billions of dollars yearly to TSMC for both factory construction and research, not just production capacity. Thus, in a few years anyone will be able to buy similar production capacity for the same cost, but Apple is bearing massive upfront costs others will not need to pay, for the privilege of being first. I'd call that a benefit for everyone, not anti-competitive. TSMC claims that without this investment, new nodes would be far less frequently deployed, so somebody has to be willing to pay the upfront to help them out.
- nicolaslem 4y ago
  That's a good point. However from a consumer and enthusiast perspective I would like all competitors to be able to compete on level playing field to see which one gets the most out of the technology.
  - themitigating 4y ago
    What would allow them to get the most out of some technology if the playing field is level? What's the difference between having an agreement with a factory and having a better employee?
  - piva00 4y ago
    Then it's not a free market anymore. And I say that being a very leftist person, what you wish isn't compatible with capitalism as it is.
- acomjean 4y ago
  Apple isn't doing this to be altruistic. They see a huge business advantage. Look at the hype on HN the M1/M2 MacBooks have.
  - gjsman-1000 4y ago
    They don't have to be altruistic. Without Apple's investment or similar, TSMC is very clear they would deploy new nodes far less frequently, simply because they could not otherwise afford it.
alberth 4y ago
While I fully agree it gives Apples a huge advantage to be on a better node than competitors by 2+ years. But this is also a free market. Apple is both willing to pay more and has the needed scale to buy up all capacity. If someone else wanted to both pay more and buy up all capacity - they have the ability to do so.
- titzer 4y ago
  What you have described is not a free market, but in fact 100% monopolistic anti-competitive moves that fall under anti-trust regulations.
  - Kerrick 4y ago
    It’s a free market, but not a competitive market. Antitrust laws reduce the freedom of the market in order to increase competition, because it’s considered better for the majority of market participants to trade that freedom for competition.
  - cpursley 4y ago
    How so? There are multiple chip makers (supply) and a huge pool of buyers (demand). As a consumer, I can now go out and buy a machine with Apple silicone, Intel, AMD. If anything, we're finally seeing some improvements after years of chip stagnation.
    - cma 4y ago
      Apple did this with the ipod and later ipod mini too, full exclusivity for small drives in deals (covering music players only) to monopolize the segment, eventually across multiple additional drive manufacturers and technologies after the mini to keep it full monopoly. Everyone else was stuck for years with laptop drives that could never be pocketable. I'm not sure if node exclusivity was why Apple has the first true wireless earbuds, there was one competitor first with some giant ones so I suspect so, but lots of competitors followed fast (other foundry's nodes were more competitive then). Anyone know the history on that and what nm chips were used by them and earliest competitors?
scarface74 4y ago
How is it “anticompetitive”? Do you propose that TSMC give the capacity to a company who is willing to pay less?
- 0x457 4y ago
  I guess free market capitalism is when Apple pays for R&D and fabs and everyone else gets a slice of production capacity at the same price.
sct202 4y ago
Huawei launched a line of cellphone chips using N5 at the same time as Apple, right before they got banned from using TSMC. It seems like others could pay enough if they really wanted to.
duxup 4y ago
If someone else is willing to pay enough I would hope a manufacturer would provide the capacity for that competitor. Up to now it doesn’t seem like anyone is willing to pay. I suspect the competition really is “ok” with waiting / don’t want to pay.
- arroz 4y ago
  “A manufacturer” just Samsung and TSMC do high end chips Idk if Samsung has an equivalent to TSMC 3nm though
etempleton 4y ago
Apple is willing to pay upfront and fund research to be first in line. Intel, Nvidia, and others could probably do the same if they wanted to and were willing to take on that risk.
jmyeet 4y ago
So I'm critical of Tim Cook because he's just not a leader like Steve Jobs was. This doesn't mean he isn't capable however. Tim Cook has had a massive impact on Apple's success and things like this TSMC deal are more evidence of this. This began more than 10 years ago when Apple was sitting on a massive pile of cash. What do you do with all that cash? Most companies will simply pay dividends or, more commonly now, do share buybacks (side note: it's become popular to view share buybacks as some kind of systemic problem but they're functionally no different to dividends). Instead Apple engaged in vendor financing. A lot of components Apple needs requires massive capital investment. Companies might borrow money for this. Apple essentially became the bank, saying we'll give you the money for this. In return Apple gets some combination of preferential pricing, guaranteed availability or exclusivity for a certain period. Eventually Apple doesn't even need to spend money to do this. Just the commitment for a buyer the size of Apple to purchase your output can have the same effect. It'll help secure financing and Apple can extract the same preferential treatment for that commitment. This is the logistics side of Apple's business and Tim Cook was the architect of that.
- semireg 4y ago
  Not to mention the backward vertical integration of P.A. Semi in 2008.
jhickok 4y ago
Intel had a spot reserved for 3nm and backed out (reportedly): https://www.tomshardware.com/news/intel-postpones-production-of-meteor-lake-3nm-gpu-tile https://www.tomshardware.com/news/intel-postpones-production... The issue seems to be these other companies being ready to port their designs. I have not seen any report that Apple is undertaking anti-competitive behaviors in order to secure the entire generation of wafers.
florakel 4y ago
Actually Qualcomm moved from Samsung to TSMC 4NM to build the Snapdragon 8 Gen 1 (4NM is the marketing name for the most advanced 5NM node) https://www.qualcomm.com/products/application/smartphones/snapdragon-8-series-mobile-platforms/snapdragon-8-gen-1-mobile-platform https://www.qualcomm.com/products/application/smartphones/sn... Qualcomm saw big gains in efficiency and performance by moving from Samsung to TSMC. Various high end Android phones use this chip already. https://www.anandtech.com/show/17395/qualcomm-announces-snapdragon-8-gen-1-moving-to-tsmc-for-more-speed-lower-power https://www.anandtech.com/show/17395/qualcomm-announces-snap...
GeekyBear 4y ago
> Apple has been selling phones and laptops with N5 for two years and I don't think we still have any competing product in the hands of consumers using N5 yet. Qualcomm's current flagship mobile chip, the Snapdragon 8+ Gen 1, is on TSMC 4nm. https://www.anandtech.com/show/17395/qualcomm-announces-snapdragon-8-gen-1-moving-to-tsmc-for-more-speed-lower-power https://www.anandtech.com/show/17395/qualcomm-announces-snap...

klelatti 4y ago

We probably have 3nm production on this timescale because of the long term relationship between Apple and TSMC and the $100bn + that Apple have spent with TSMC over that time period. No one else has done this. Apple pays the money and takes the risks, so they get the rewards.

ohgodplsno 4y ago
"Takes the risks" Takes what risks ? Buying the riskless new transistors that TSMC puts out because they know that they work ? Apple taking risks would be making the chips themselves (see: the failure that was itanium and how it screwed Intel because they had to reorganize their facilities for it), not buying it wholesale and just having TSMC print it.
- klelatti 4y ago
  The risk that TSMC doesn't deliver on node improvements / deliver the relevant SoCs in the required numbers. And if you think that risk is small / nil I would point you to Intel's recent track record. And just to point out that Apple actually does bear the risk you've highlighted as Itanium was a design (which Apple does) not a manufacturing failure.
  - lotsofpulp 4y ago
    There is also risk that sufficient consumers do not want to buy Apple’s products at a sufficient price premium to offset the price premium that Apple paid to TSMC.
    - klelatti 4y ago
      Good point!
    - ohgodplsno 4y ago
    - wmf 4y ago
      For a specific recent example of this risk we can look at Nvidia who put down huge deposits for N4 wafers and now doesn't have enough customer demand for those chips.
  - ohgodplsno 4y ago
    - colinmhayes 4y ago
      > Oh no, the company that never failed a delivery might fail the delivery! Such a risk You could say the same thing about Intel until they blew it with 10nm. Who knows what the future holds
      - klelatti 4y ago
        Exactly. Also blaming Intel's process problems on Itanium (discontinued 2011) is - well an interesting perspective!
- deleted 4y ago
  [deleted]
- Tagbert 4y ago
  One risk comes from the long lead times of chip design and production. They are committing to a design and process and hoping that production can occur on time and in the right volume to meet there needs. That is not a certainty and a delay could be very expensive since product releases are tied to the new chips.

gjsman-1000 4y ago

From a (slightly) insider perspective, companies that want the latest node actually pay billions of dollars yearly to TSMC for both factory construction and research, not just production capacity. Thus, in a few years anyone will be able to buy similar production capacity for the same cost, but Apple is bearing massive upfront costs others will not need to pay, for the privilege of being first. I'd call that a benefit for everyone, not anti-competitive. TSMC claims that without this investment, new nodes would be far less frequently deployed, so somebody has to be willing to pay the upfront to help them out.

nicolaslem 4y ago
That's a good point. However from a consumer and enthusiast perspective I would like all competitors to be able to compete on level playing field to see which one gets the most out of the technology.
- themitigating 4y ago
  What would allow them to get the most out of some technology if the playing field is level? What's the difference between having an agreement with a factory and having a better employee?
- piva00 4y ago
  Then it's not a free market anymore. And I say that being a very leftist person, what you wish isn't compatible with capitalism as it is.
acomjean 4y ago
Apple isn't doing this to be altruistic. They see a huge business advantage. Look at the hype on HN the M1/M2 MacBooks have.
- gjsman-1000 4y ago
  They don't have to be altruistic. Without Apple's investment or similar, TSMC is very clear they would deploy new nodes far less frequently, simply because they could not otherwise afford it.

alberth 4y ago

While I fully agree it gives Apples a huge advantage to be on a better node than competitors by 2+ years. But this is also a free market. Apple is both willing to pay more and has the needed scale to buy up all capacity. If someone else wanted to both pay more and buy up all capacity - they have the ability to do so.

titzer 4y ago
What you have described is not a free market, but in fact 100% monopolistic anti-competitive moves that fall under anti-trust regulations.
- Kerrick 4y ago
  It’s a free market, but not a competitive market. Antitrust laws reduce the freedom of the market in order to increase competition, because it’s considered better for the majority of market participants to trade that freedom for competition.
- cpursley 4y ago
  How so? There are multiple chip makers (supply) and a huge pool of buyers (demand). As a consumer, I can now go out and buy a machine with Apple silicone, Intel, AMD. If anything, we're finally seeing some improvements after years of chip stagnation.
  - cma 4y ago
    Apple did this with the ipod and later ipod mini too, full exclusivity for small drives in deals (covering music players only) to monopolize the segment, eventually across multiple additional drive manufacturers and technologies after the mini to keep it full monopoly. Everyone else was stuck for years with laptop drives that could never be pocketable. I'm not sure if node exclusivity was why Apple has the first true wireless earbuds, there was one competitor first with some giant ones so I suspect so, but lots of competitors followed fast (other foundry's nodes were more competitive then). Anyone know the history on that and what nm chips were used by them and earliest competitors?

scarface74 4y ago

How is it “anticompetitive”? Do you propose that TSMC give the capacity to a company who is willing to pay less?

0x457 4y ago
I guess free market capitalism is when Apple pays for R&D and fabs and everyone else gets a slice of production capacity at the same price.

sct202 4y ago

Huawei launched a line of cellphone chips using N5 at the same time as Apple, right before they got banned from using TSMC. It seems like others could pay enough if they really wanted to.

duxup 4y ago

If someone else is willing to pay enough I would hope a manufacturer would provide the capacity for that competitor. Up to now it doesn’t seem like anyone is willing to pay. I suspect the competition really is “ok” with waiting / don’t want to pay.

arroz 4y ago
“A manufacturer” just Samsung and TSMC do high end chips Idk if Samsung has an equivalent to TSMC 3nm though

etempleton 4y ago

Apple is willing to pay upfront and fund research to be first in line. Intel, Nvidia, and others could probably do the same if they wanted to and were willing to take on that risk.

jmyeet 4y ago

So I'm critical of Tim Cook because he's just not a leader like Steve Jobs was. This doesn't mean he isn't capable however. Tim Cook has had a massive impact on Apple's success and things like this TSMC deal are more evidence of this. This began more than 10 years ago when Apple was sitting on a massive pile of cash. What do you do with all that cash? Most companies will simply pay dividends or, more commonly now, do share buybacks (side note: it's become popular to view share buybacks as some kind of systemic problem but they're functionally no different to dividends). Instead Apple engaged in vendor financing. A lot of components Apple needs requires massive capital investment. Companies might borrow money for this. Apple essentially became the bank, saying we'll give you the money for this. In return Apple gets some combination of preferential pricing, guaranteed availability or exclusivity for a certain period. Eventually Apple doesn't even need to spend money to do this. Just the commitment for a buyer the size of Apple to purchase your output can have the same effect. It'll help secure financing and Apple can extract the same preferential treatment for that commitment. This is the logistics side of Apple's business and Tim Cook was the architect of that.

semireg 4y ago
Not to mention the backward vertical integration of P.A. Semi in 2008.

jhickok 4y ago

Intel had a spot reserved for 3nm and backed out (reportedly): https://www.tomshardware.com/news/intel-postpones-production-of-meteor-lake-3nm-gpu-tile https://www.tomshardware.com/news/intel-postpones-production... The issue seems to be these other companies being ready to port their designs. I have not seen any report that Apple is undertaking anti-competitive behaviors in order to secure the entire generation of wafers.

florakel 4y ago

Actually Qualcomm moved from Samsung to TSMC 4NM to build the Snapdragon 8 Gen 1 (4NM is the marketing name for the most advanced 5NM node) https://www.qualcomm.com/products/application/smartphones/snapdragon-8-series-mobile-platforms/snapdragon-8-gen-1-mobile-platform https://www.qualcomm.com/products/application/smartphones/sn... Qualcomm saw big gains in efficiency and performance by moving from Samsung to TSMC. Various high end Android phones use this chip already. https://www.anandtech.com/show/17395/qualcomm-announces-snapdragon-8-gen-1-moving-to-tsmc-for-more-speed-lower-power https://www.anandtech.com/show/17395/qualcomm-announces-snap...

GeekyBear 4y ago

> Apple has been selling phones and laptops with N5 for two years and I don't think we still have any competing product in the hands of consumers using N5 yet. Qualcomm's current flagship mobile chip, the Snapdragon 8+ Gen 1, is on TSMC 4nm. https://www.anandtech.com/show/17395/qualcomm-announces-snapdragon-8-gen-1-moving-to-tsmc-for-more-speed-lower-power https://www.anandtech.com/show/17395/qualcomm-announces-snap...