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Since they are basically the only manufacturer, when Apple "rejects" the price hike, what options does Apple have?
by cft 4y ago
Since they are basically the only manufacturer, when Apple "rejects" the price hike, what options does Apple have?
- duxup 4y agoSame options as TSMC, continue negotiating. They both want this to get worked out.
- JacobThreeThree 4y agoIt seems like one of the options is to leak some of the negotiation details to the media.
- duxup 4y agoPlenty of leaks out there that aren't a part of some strategy, sometimes it is just a leak.
- _kbh_ 4y agoConsidering Apple funds a lot of TSMC's R&D I dare say they have a lot of leverage if they really wanna push it.
- colejohnson66 4y agoBut Apple needs TSMC. Not saying you’re wrong, but TSMC also has leverage. TSMC doesn’t want to price Apple out, but at the same time, Apple can’t just pack up and go to a competitor. At the nodes they’re working at, going to a competitor could require a complete relayout with new design rules.
- nyokodo 4y ago> Apple can’t just pack up and go to a competitor No, but they can use their massive war chest and expertise to ramp up a competitor or become one themselves over the next decade or two. With massive corporate ships like TSMC and Apple it takes a long time to change course but they work on longer timelines so a big negative shift over a long time scale is an alarming signal.
- ChrisMarshallNY 4y agoIf anyone can do it, it's Apple. Remember when there was no way that Apple would ever be able to move away from Moto? Remember when there was no way that Apple would ever be able to move away from IBM/Power? Remember when there was no way that Apple would ever be able to move away from Intel?
- GeekyBear 4y agoRemember when there was no way Apple would shift their SOC production away from Samsung?
- ChuckNorris89 4y agoBuilding your own semiconductor fab with good yelds that are profitable is monumentally more complex than all of those things combined. Why do you think only Intel and Samsung are the ones left at the cutting edge anf even they are struggling to keep up with TSMC? If you think Apple can just buy their way into fab success, you don't understand the complexities of semiconductor manufacturing.
- foobiekr 4y agoWhat apple really brings to the table isn’t really plain cash though capital investment helps it’s guaranteed capacity.
- ChrisMarshallNY 4y ago> you don't understand the complexities of semiconductor manufacturing. Eh. Might know a thing or two, but I'm sure you know what you're talking about.
- ChuckNorris89 4y agoPlease enlighten us.
- 4y ago
- KptMarchewa 4y agoIntel was at the same position as TSMC now - there was no competing supplier. Apple decided to become one themselves.
- philjohn 4y agoDepends on the reality of the deal TSMC has with ASML - those machines aren't exactly quick to ramp up production of.
- hollerith 4y agoI don't understand this comment: even if there were times in past years when AMD CPUs were significantly less performant and more energy-hungry than Intel CPUs, Macs with AMD CPUs that would have sold at least well enough to keep the Mac alive as a product line.
- _kbh_ 4y agoApple 100% does need TSMC at this point and there is leverage both ways. I suspect if Apple really wanted to they would probably start to produce their products in two lines like Nvidia did, with cheaper phones produced on something like Samsungs 4nm and the higher end phones on TSMCS 3nm. This has the added benefit of diversifying their supply chain (to a degree), giving TSMC less leverage over Apple and potentially reducing the production cost of the lower end phones.
- Crosseye_Jack 4y ago> I suspect if Apple really wanted to they would probably start to produce their products in two lines like Nvidia did, with cheaper phones produced on something like Samsungs 4nm and the higher end phones on TSMCS 3nm. Wouldn't be the first time Apple has used multiple vendors for their SOC. The 6s for example had SOCs made by both Samsung (14nm) and TMSC (16nm).
- chasil 4y agoAMD was quite angry that they were shut out of TSMC's 3nm. I wonder how they would react if they were offered 25% of Apple's 3nm capacity at the higher price. This could be a good lesson for everybody.
- Sohcahtoa82 4y agoTSMC needs Apple, but Apple needs TSMC. Sounds like they're playing a game of chicken.
- giantrobot 4y agoApple can't easily go to a competitor. They have the cash on hand to play kingmaker though. They could go to one of TSMC's competitors and make them into the new TSMC. TSMC's current position is largely due to Apple fronting huge sums of cash for them to develop new nodes. They get guaranteed sales at a generous price for the first few million chips off the line. There's few other players, if any, that could offer TSMC a deal like that. Apple could with some pain replace TSMC but TSMC can't really replace Apple. While Apple is a demanding partner they pay their bills on time and can and do front R&D money. Once Apple's deliveries are made TSMC now has a money printer on the new process node Apple paid for.
- fomine3 4y agoThis is good point, compared to unrealistic Apple's own fab idea.
- madeofpalk 4y agoIt appears they both equally need each other. If TMSC rejects Apple, what is Apple going to do? Use Intel chips in iPhones?
- mrweasel 4y agoI'm half expecting Intel to start producing chips for others in the coming years. However I doubt that it's as simple as sending Intel the blueprints for the M3, there has to be some re-tooling on both ends I believe.
- Someone 4y ago> I’m half expecting Intel to start producing chips for others in the coming years. They announced they would do that in March 2021 (https://www.techpowerup.com/280085/intel-to-enter-third-party-foundry-business-set-up-usd-20-billion-fabs-in-arizona https://www.techpowerup.com/280085/intel-to-enter-third-part...) and have customers: - QualComm and Amazon AWS: https://www.theverge.com/2021/7/26/22595002/intel-qualcomm-chips-foundry-services-amazon-aws-20a https://www.theverge.com/2021/7/26/22595002/intel-qualcomm-c... - MediaTek (https://www.tomshardware.com/news/intels-foundry-services-lands-mediatek-as-a-16nm-customer https://www.tomshardware.com/news/intels-foundry-services-la...) Intel page: https://www.intel.com/content/www/us/en/foundry/intel-foundry-services.html https://www.intel.com/content/www/us/en/foundry/intel-foundr...
- petesergeant 4y agoSay "OK, for now!", and then drop some of its gigantic cash pile into helping another supplier that it part-owns become a real competitor
- ClumsyPilot 4y agoJust because you have money, doesn't mean you can magic resources organisation and training out of nowhere. This sounds like the same neoliberal fantasy that trapped Europe into an energy crisis.
- mirzap 4y ago
- FartyMcFarter 4y agoClearly there's a level that Apple wouldn't pay (e.g. 100000000% hike), so there are definitely options up to and including cancelling plans to buy such chips from TSMC.
- Hamuko 4y agoAsk what kind of tax breaks the US government would be willing to give them if they were to build a foundry in the US.
- AngryData 4y agoNothing immediately, but they have the cash on hand to fund competitors now that could replace them in say 10 years or so.
- sangnoir 4y agoHow is this approach working out for China? Not snark, I genuinely want to know what resident experts think of the progress made by throwing vast sums at SoTA node fabs.