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That's like super naive. First, you mentioned it. "It has sure been profitable". That's kinda the whole point. You get more profits, you use those profits for
by twawaaay 4y ago
That's like super naive.
First, you mentioned it. "It has sure been profitable". That's kinda the whole point. You get more profits, you use those profits for R&D to further distance yourself from the competition.
If there is any way to reduce your risk it is building a technological edge over competition and sizeable cash reserves.
Second, even if Apple faced complete stoppage in production, its situation is different from other companies. It not only can do things that other companies can't (like pull cash to build entire supply chain in some other place), it also has devout user base that will mostly just wait for Apple to come back. People who buy say Samsung laptops and phones will switch to another brand with no second thought if they can't buy Samsung, while people who buy Apple will try as much to wait and will not switch easily.
Third, the US is currently the guarantor of Taiwan's safety so maybe the risk isn't as big as you think.
Fourth, if TSMC is unavailable they will spin the production somewhere else. And who do you think will get the first chips out of it -- the companies that are the most ready (Apple, they already have all the know how and designs), the companies that are ready to pay the most for the privilege (Apple, because of their cushy margins) and the companies that have the most weight behind them (again Apple).
So no, I think that saying Apple's risk is obscene is just naive. Apple has positioned itself to be best at weathering any storm that might happen, it knows the competition will be hit even more and is using this to reap as much benefits as it can while the party lasts.
- smoldesu 4y ago> Fourth, if TSMC is unavailable they will spin the production somewhere else. Where? Intel would sell them their fabs, but they don't have a process as advanced as TSMC 5nm. Samsung might be able to compete, but their yields are wickedly low and still slightly behind TSMC. GlobalFoundries might accept Apple as a customer, but then we'd basically have two Qualcomms. What is Apple's plan-b for Taiwan?
- jjtheblunt 4y agoIsn't TSMC building outside Taiwan, to your point? https://www.tomshardware.com/news/tsmc-fab-21-arizona https://www.tomshardware.com/news/tsmc-fab-21-arizona
- slaw 4y agoIt is only 20000 wafers per month on 5nm. Only 5nm factories in Taiwan make 150000 wafers per month. https://wccftech.com/tsmc-boosts-5nm-production-to-150000-wafers-month-amidst-strong-demand/ https://wccftech.com/tsmc-boosts-5nm-production-to-150000-wa...
- AbrahamParangi 4y agoIf China invades Taiwan, it will not be possible to do business with China or Taiwan and every company with substantial exposure to this risk should be preparing for the possibility that all resources in China are instantly "lost" or unavailable for many years. Apple's production capacity has taken decades to build and will take years at minimum to restore. Their exposure is so immense that it would make sense for them to spend a percentage of their cash position just on lobbying to try and prevent the outbreak of war. Their risk is obscene. They're poorly positioned because their manufacturing base is undiversified and in the case of "complete shutoff of goods from China" it will be years before they're back at capacity.