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Can anyone speculate what will happen to Apple if for any reason TSM abruptly stops supplying chips? Will their revenue just drop by 80%?

gjsman-1000 4y ago
You mean TSMC. Well, they would be seriously hurt. However, does that matter when almost every tech company (including Qualcomm, MediaTek, AMD, Apple, ARM, Broadcom, Marvell, Nvidia, Intel, so forth) would also be harmed? TSMC going down is basically the MAD (Mutually Assured Destruction) of tech companies. Kind of a single point of failure. Intel would probably weather it best but would still be hurt because they need TSMC for some products. Plus, well, in the event of TSMC's destruction (most likely by a Chinese invasion), Intel might raise prices considerably or even stop sale to consumers especially as their chips would now have major strategic value for government operations. NVIDIA might also survive by reviving older products which can be manufactured by Samsung in Korea, but same situation about the strategic value there, and getting chips from Korea to US might be difficult in such a conflict.
- nomel 4y ago
  > TSMC going down is basically the MAD (Mutually Assured Destruction) of tech companies. This is why it's appropriately called the "Silicon Shield", within Taiwan: https://semiwiki.com/china/314669-the-evolution-of-taiwans-silicon-shield/ https://semiwiki.com/china/314669-the-evolution-of-taiwans-s...
- deleted 4y ago
  [deleted]
- earthscienceman 4y ago
  Does anyone have any resources that explain the historical reason(s) TSMC became what it is? How did the world's most important hardware manufacturer manage to get constructed on a geopolitical pinchpoint?
  - kochb 4y ago
    This podcast covers most of the important points: https://www.acquired.fm/episodes/tsmc https://www.acquired.fm/episodes/tsmc
wilsonnb3 4y ago
Everybody except Intel and Samsung is screwed if TSMC stops making chips. Apple (and the rest of the mobile industry) would try to move to using Samsung's fabs and Intel would go back to being the undisputed king on desktops, laptops, and servers. I think TSMC has like 2-3 times the fab capacity that Samsung does right now for modern chips, so there would be a huge chip shortage. Apple's $200 billion cash pile would come in handy when trying to buy fab capacity from Samsung so they might come out ahead of less cash-rich competitors. There would be a significant hit to processor performance. Samsung fabbed the recent Snapdragon 8 Gen 1, which has comparable single core performance to the iPhone 7's A10 fusion chip.
- Tostino 4y ago
  The performance of that core is not necessarily all dependent on the node... Apple have been lauded for their designs. Samsung / arm, not so much.
  - kergonath 4y ago
    > Samsung / arm, not so much. I don’t think that is fair. ARM and Apple have very different objectives. Apple does not care if its CPU design division makes any money and they can get away with very large SoCs that rely on cutting edge manufacturing. ARM on the other hand needs to sell designs that manufacturers can use to make money. So there is a tendency to go towards simpler designs that are easier to manufacture. So sure, Apple has an edge in performance. But they don’t have the same business model or optimise for the same things.
- florakel 4y ago
  >There would be a significant hit to processor performance. You are probably right. Look at the gains Qualcomm saw by migrating from Samsung to TSMC: 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...
  - 2muchcoffeeman 4y ago
beautifulfreak 4y ago
TSMC announced its new Phoenix Arizona fab would begin mass production in the first quarter of 2024.
- bogomipz 4y ago
  Similarly Intel just announced a new partnership to accomplish similar. Also in Arizon: https://money.usnews.com/investing/news/articles/2022-08-23/intel-brookfield-to-invest-up-to-30-billion-in-arizona-chip-factories https://money.usnews.com/investing/news/articles/2022-08-23/...
- eis 4y ago
  By that time it'll be far from bleeding edge. The Taiwan fab will be close to N2 while the Arizona fab will be able to produce 5nm generation chips, that'll be 4-5 year old tech then.
- joenathanone 4y ago
  That is funny we are literally about to run out of water over here in AZ.
zaroth 4y ago
If WW3 goes hot beyond the regional proxies, we all lose pretty hard. A new iPhone 14 or Mac M2 will be a pipe that we all chuckle about how we used to care about such things.
- kyriakos 4y ago
  If the economic situation we are all into at the moment is because of Ukraine war, I think is ww3 happens slower iPhones will be the least of our concerns.
deleted 4y ago
[deleted]
ytdytvhxgydvhh 4y ago
Way down the road I hope Tim Cook writes a memoir. I’m curious as to his unvarnished thoughts about doing business in (and being so reliant on) Taiwan and China. I’m sure he can’t publicly express some of those thoughts without unnecessarily adding risk for Apple but he must have lots of interesting opinions about things like being reliant on TSMC vs trying to build their own fabs, etc.
- bredren 4y ago
  Based on how Jobs life and legacy are discussed at Apple, I doubt cook will ever speak frankly about matters that affect Apple. Kara Swisher is interviewing him and Laureen Powell Jobs soon. I expect that interview to continue to focus on only the best possible characterizations of Steve.
- mrtksn 4y ago
  I recall Tim Cook speaking about it actually. He says, Apple is there not because it's cheap but because they actually have unmatched engineering capacity. He was talking about how much quicker everything can get moving and how much accessible engineering talent they have. It makes sense, after all there are much poorer countries in the world but you can't expect for Afghanistan for example be like "okay okay Apple, we will do the chips and the phone at %25 discount". In fact, you can't expect even EU or USA to start easily doing that because the manufacturing know how is long gone with the de-industrialisation of the west. Sure, there's some talent and capacity left but its not anywhere near the scale of what exists in Taiwan and China.
mlindner 4y ago
For what reason would TSMC abruptly stop supplying chips short of war? There's nothing other than war that would cause it. And if there's a war, Apple's profits are the least of problems.
- Bud 4y ago
  Climate change impacts or global pandemics could also significantly impact TSMC's operations. Or, Chinese actions that are somewhat short of full-on war. Also relevant here: TSMC is building a chip fab in the US.
- lostlogin 4y ago
  > For what reason would TSMC abruptly stop supplying chips short of war? Earthquakes would be top of my list of things that would cause problems.
  - kaushikc 4y ago
    The facilities are made to mitigate and reduce damage due to earthquakes. https://esg.tsmc.com/en/update/governance/caseStudy/1/index.html#:~:text=TSMC%20improved%20seismic%20resistance%20of,1.5%20times%20for%20Nonstructural%20components https://esg.tsmc.com/en/update/governance/caseStudy/1/index.....
- rowanG077 4y ago
  Meteor, Large tsunami, Earth quake, Solar flare, extremely infectious disease that isn't as weak as Covid-19. There are so many natural disasters that could cripple or outright destroy TSMC production facilities.
  - mlindner 4y ago
    Meteor and Solar Flare that are big enough to cause problems would be global problems. Large tsunami is possible, but I doubt they built these things right next to the ocean, and as the other poster says they're built to withstand large earthquakes. Infectious diseases are another global problem.
jkestner 4y ago
Repeat of the car market? I'm going to make a bunch of money off the old computers collecting dust here, and Apple's going to have to unlock support for new OSes on them, making all its money on services.
novok 4y ago
If TSMC poofed out of existence because of a few bombs from china or a freak super natural disaster, global GDP would drop significantly and quickly. One of the biggest SPOF that I'm worried about in the world.

gjsman-1000 4y ago

You mean TSMC. Well, they would be seriously hurt. However, does that matter when almost every tech company (including Qualcomm, MediaTek, AMD, Apple, ARM, Broadcom, Marvell, Nvidia, Intel, so forth) would also be harmed? TSMC going down is basically the MAD (Mutually Assured Destruction) of tech companies. Kind of a single point of failure. Intel would probably weather it best but would still be hurt because they need TSMC for some products. Plus, well, in the event of TSMC's destruction (most likely by a Chinese invasion), Intel might raise prices considerably or even stop sale to consumers especially as their chips would now have major strategic value for government operations. NVIDIA might also survive by reviving older products which can be manufactured by Samsung in Korea, but same situation about the strategic value there, and getting chips from Korea to US might be difficult in such a conflict.

nomel 4y ago
> TSMC going down is basically the MAD (Mutually Assured Destruction) of tech companies. This is why it's appropriately called the "Silicon Shield", within Taiwan: https://semiwiki.com/china/314669-the-evolution-of-taiwans-silicon-shield/ https://semiwiki.com/china/314669-the-evolution-of-taiwans-s...
deleted 4y ago
[deleted]
earthscienceman 4y ago
Does anyone have any resources that explain the historical reason(s) TSMC became what it is? How did the world's most important hardware manufacturer manage to get constructed on a geopolitical pinchpoint?
- kochb 4y ago
  This podcast covers most of the important points: https://www.acquired.fm/episodes/tsmc https://www.acquired.fm/episodes/tsmc

wilsonnb3 4y ago

Everybody except Intel and Samsung is screwed if TSMC stops making chips. Apple (and the rest of the mobile industry) would try to move to using Samsung's fabs and Intel would go back to being the undisputed king on desktops, laptops, and servers. I think TSMC has like 2-3 times the fab capacity that Samsung does right now for modern chips, so there would be a huge chip shortage. Apple's $200 billion cash pile would come in handy when trying to buy fab capacity from Samsung so they might come out ahead of less cash-rich competitors. There would be a significant hit to processor performance. Samsung fabbed the recent Snapdragon 8 Gen 1, which has comparable single core performance to the iPhone 7's A10 fusion chip.

Tostino 4y ago
The performance of that core is not necessarily all dependent on the node... Apple have been lauded for their designs. Samsung / arm, not so much.
- kergonath 4y ago
  > Samsung / arm, not so much. I don’t think that is fair. ARM and Apple have very different objectives. Apple does not care if its CPU design division makes any money and they can get away with very large SoCs that rely on cutting edge manufacturing. ARM on the other hand needs to sell designs that manufacturers can use to make money. So there is a tendency to go towards simpler designs that are easier to manufacture. So sure, Apple has an edge in performance. But they don’t have the same business model or optimise for the same things.
florakel 4y ago
>There would be a significant hit to processor performance. You are probably right. Look at the gains Qualcomm saw by migrating from Samsung to TSMC: 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...
- 2muchcoffeeman 4y ago

beautifulfreak 4y ago

TSMC announced its new Phoenix Arizona fab would begin mass production in the first quarter of 2024.

bogomipz 4y ago
Similarly Intel just announced a new partnership to accomplish similar. Also in Arizon: https://money.usnews.com/investing/news/articles/2022-08-23/intel-brookfield-to-invest-up-to-30-billion-in-arizona-chip-factories https://money.usnews.com/investing/news/articles/2022-08-23/...
eis 4y ago
By that time it'll be far from bleeding edge. The Taiwan fab will be close to N2 while the Arizona fab will be able to produce 5nm generation chips, that'll be 4-5 year old tech then.
joenathanone 4y ago
That is funny we are literally about to run out of water over here in AZ.

zaroth 4y ago

If WW3 goes hot beyond the regional proxies, we all lose pretty hard. A new iPhone 14 or Mac M2 will be a pipe that we all chuckle about how we used to care about such things.

kyriakos 4y ago
If the economic situation we are all into at the moment is because of Ukraine war, I think is ww3 happens slower iPhones will be the least of our concerns.

deleted 4y ago

[deleted]

ytdytvhxgydvhh 4y ago

Way down the road I hope Tim Cook writes a memoir. I’m curious as to his unvarnished thoughts about doing business in (and being so reliant on) Taiwan and China. I’m sure he can’t publicly express some of those thoughts without unnecessarily adding risk for Apple but he must have lots of interesting opinions about things like being reliant on TSMC vs trying to build their own fabs, etc.

bredren 4y ago
Based on how Jobs life and legacy are discussed at Apple, I doubt cook will ever speak frankly about matters that affect Apple. Kara Swisher is interviewing him and Laureen Powell Jobs soon. I expect that interview to continue to focus on only the best possible characterizations of Steve.
mrtksn 4y ago
I recall Tim Cook speaking about it actually. He says, Apple is there not because it's cheap but because they actually have unmatched engineering capacity. He was talking about how much quicker everything can get moving and how much accessible engineering talent they have. It makes sense, after all there are much poorer countries in the world but you can't expect for Afghanistan for example be like "okay okay Apple, we will do the chips and the phone at %25 discount". In fact, you can't expect even EU or USA to start easily doing that because the manufacturing know how is long gone with the de-industrialisation of the west. Sure, there's some talent and capacity left but its not anywhere near the scale of what exists in Taiwan and China.

mlindner 4y ago

For what reason would TSMC abruptly stop supplying chips short of war? There's nothing other than war that would cause it. And if there's a war, Apple's profits are the least of problems.

Bud 4y ago
Climate change impacts or global pandemics could also significantly impact TSMC's operations. Or, Chinese actions that are somewhat short of full-on war. Also relevant here: TSMC is building a chip fab in the US.
lostlogin 4y ago
> For what reason would TSMC abruptly stop supplying chips short of war? Earthquakes would be top of my list of things that would cause problems.
- kaushikc 4y ago
  The facilities are made to mitigate and reduce damage due to earthquakes. https://esg.tsmc.com/en/update/governance/caseStudy/1/index.html#:~:text=TSMC%20improved%20seismic%20resistance%20of,1.5%20times%20for%20Nonstructural%20components https://esg.tsmc.com/en/update/governance/caseStudy/1/index.....
rowanG077 4y ago
Meteor, Large tsunami, Earth quake, Solar flare, extremely infectious disease that isn't as weak as Covid-19. There are so many natural disasters that could cripple or outright destroy TSMC production facilities.
- mlindner 4y ago
  Meteor and Solar Flare that are big enough to cause problems would be global problems. Large tsunami is possible, but I doubt they built these things right next to the ocean, and as the other poster says they're built to withstand large earthquakes. Infectious diseases are another global problem.

jkestner 4y ago

Repeat of the car market? I'm going to make a bunch of money off the old computers collecting dust here, and Apple's going to have to unlock support for new OSes on them, making all its money on services.

novok 4y ago

If TSMC poofed out of existence because of a few bombs from china or a freak super natural disaster, global GDP would drop significantly and quickly. One of the biggest SPOF that I'm worried about in the world.