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Calling Nvidia niche feels a bit wild given their status-quo right now, but from a foundry perspective, it seems true. Apple is the anchor tenant that keeps the

Calling Nvidia niche feels a bit wild given their status-quo right now, but from a foundry perspective, it seems true. Apple is the anchor tenant that keeps the lights on across 12 different mature and leading-edge fabs. Nvidia is the high-frequency trader hammering the newest node until the arb closes. Stability usually trades at a discount during a boom, but Wei knows the smartphone replacement cycle is the only predictable cash flow. Apple is smart. If the AI capex cycle flattens in late '27 as models hit diminishing returns, does Apple regain pricing power simply by being the only customer that can guarantee wafer commits five years out?

rafterydj 9mo ago
I tend to agree with you, feels to me like the root of this is essentially whether foundries will "go all in" on AI like the rest of the S&P 500. But why trade away one trillion-dollar customer for another trillion-dollar customer if the first one is never going away, and the second one might?
- Fiveplus 9mo ago
  I think it is less of a trade and more of a symbiotic capital cycle, if I can call it that? Nvidia's willingness to pay exorbitant prices for early 2nm wafers subsidizes the R&D and the brutal yield-learning curve for the entire node. But you can't run a sustainable gigafab solely on GPUs...the defect density math is too punishing. You need a high-volume, smaller-die customer (Apple) to come in 18 months later, soak up the remaining 90% of capacity and amortize that depreciation schedule over a decade.
  - alex43578 9mo ago
    Isn’t the smaller die aspect more valuable early in the node’s maturity, where defects are less punishing?
    - Fiveplus 9mo ago
      That is the traditional textbook yield curve logic, if I'm not wrong? Smaller area = higher probability of a surviving die on a dirty wafer. But I wonder if the sheer margin on AI silicon basically breaks that rule? If Nvidia can sell a reticle-sized package for 25k-30k USD, they might be perfectly happy paying for a wafer that only yields 30-40% good dies. Apple OTOH operates at consumer electronics price points. They need mature yields (>90%) to make the unit economics of an iPhone work. There's also the binning factor I am curious about. Nvidia can disable 10% of the cores on a defective GPU and sell it as a lower SKU. Does Apple have that same flexibility with a mobile SoC where the thermal or power envelope is so tightly coupled to the battery size?
      - genocidicbunny 9mo ago
        I am curious about the binning factor too since in the past, AMD and Intel have both made use of defect binning to still sell usable chips by disabling cores. Perhaps Apple is able to do the same with their SoCs? It's not likely to be as granular as Nvidia who can disable much smaller areas of the silicon for each of their cores. On the other hand, the specifics of the silicon and the layout of the individual cores, not to mention the spread of defects over the die might mitigate that advantage.
        ricw 9mo ago
        They do bin their chips. Across the range (A- and M-series) they have the same chip with fewer / disabled cpu and gpu cores. You pray a premium for ones with more cores. Unsure about the chip frequencies - Apple doesn’t disclose those openly from what I know.
      - nebula8804 9mo ago
        I thought they binned CPUs for things like AppleTV and lower cost iPads?
        jsheard 9mo ago
        Yeah, most of their chips have two or more bins with different core configs, and the lower bins probably use salvaged dies. For example the regular M4 can have 4 P-cores / 6 E-cores / 10 GPU cores, or 3/6/10 cores, or 4/4/8 cores, depending on the device. They even do it on the smaller A-series chips - the A15 could be 2/4/5, 2/4/4, or 2/3/5.
- alt227 9mo ago
  Why are foundries going 'All In' on AI? They fab chips for customers, doesnt matter what chips they are and who the customer is.'Who will pay the most for us to make their chips first' is the only question TMSC will be asking. The market of the customer is irrelevant.
deleted 9mo ago
[deleted]
epolanski 9mo ago
Regardless of that, fab industry is based on a short and mid term auction-like planning. If Nvidia pays more, Apple has to match.
- swiftcoder 9mo ago
  > Regardless of that, fab industry is based on a short and mid term auction-like planning Not a system that necessarily works all that well if one player has a short-term ability to vastly outspending all the rest. You can't let all your other customers die just because Nvidia is flush with cash this quarter...
  - xp84 9mo ago
    > die Is the argument that Apple will go out of business? AAPL? Wait, > one player has a short-term ability to vastly outspending all the rest. I assure you, Apple has the long-term and short-term ability to spend like a drunken sailor all day and all night, indefinitely, and still not go out of business. Of course they’d prefer not to. But there is no ‘ability to pay’ gap here between these multi-trillion-dollar companies. Apple will be forced to match or beat the offer coming from whoever is paying more. It will cost them a little bit of their hilariously-high margins. If they don’t, they’ll have to build less advanced chips or something. But their survival is not in doubt and TSMC knows that.
  - bigyabai 9mo ago
    > Not a system that necessarily works all that well if one player has a short-term ability to vastly outspending all the rest. Well yeah, people were identifying that back when Apple bought out the entirety of the 5nm node for iPhones and e-tchotchkes. It was sorta implicitly assumed that any business that builds better hardware than Apple would boot them out overnight.
    - swiftcoder 9mo ago
      > It was sorta implicitly assumed that any business that builds better hardware than Apple would boot them out overnight It's not "build better hardware" though, it's "continue to ship said hardware for X number of years". If someone buys out the entire fab capacity and then goes under next year, TSMC is left holding the bag
Bombthecat 9mo ago
I doubt that we will hit diminishing returns in AI. We still find new ways to make them faster or cheaper or better or even train themselves... The flat line prediction is now 2 years old...
- aaronblohowiak 9mo ago
  Feels like top of s curve lately
- eikenberry 9mo ago
  I thought the prediction was that the scaling of LLMs making them better would plateau, not that all advancement would stop? And that has pretty much happened as all the advancements over the last year or more have been architectural, not from scaling up.
- sfn42 9mo ago
  You say that, but to me they seem roughly the same as they've been for a good while. Wildly impressive technology, very useful, but also clearly and confidently incorrect a lot. Most of the improvement seems to have come from other avenues - search engine integration, image processing (still blows my mind every time I send a screenshot to a LLM and it gets it) and stuff like that. Sure maybe they do better in some benchmarks, but to me the experience of using LLMs is and has been limited by their tendency to be confidently incorrect which betrays their illusion of intelligence as well as their usefulness. And I don't really see any clear path to getting past this hurdle, I think this may just be about as good as they're gonna get in that regard. Would be great if they prove me wrong.
  - Bombthecat 9mo ago
    Deepseek, Nvidia and meta are pumping out one paper after another. New and better things are coming. They will just take time to implement, and I doubt they cancel current training runs. So I guess it will take up to a year for the new things to come out Can the bubble burst in this time, because people lose patience? Of course. But we are far from the end.
anoojb 9mo ago
So let's say TMSC reciprocated Apple's consistency as a customer by giving them preferential treatment for capacity. It's good business after all. However, everyone knows that good faith reciprocity at that scale is not rewarded. Apple is ruthless. There are probably thousands of untold stories of how hard Apple has hammered it's suppliers over the years. While Apple has good consumer brand loyalty, they arguably treat their suppliers relatively poorly compared to the Gold standard like Costco.
- bethekidyouwant 9mo ago
  Agreed TSMC can do whatever they want. in 2027 no other fabs will match what tsmc has today, anything that requires the latest process node is going to get more expensive, so your apple silicone and your AMD chips
  - high_na_euv 9mo ago
    As of today Intel is very around leading node
    - girvo 9mo ago
      I'll believe it when I see it (at scale). I hope 18A is good enough as competition is good, and a weak Intel is bad for us all.
      - high_na_euv 9mo ago
        PTL is already released, on shelves in like 2 weeks.
        girvo 9mo ago
        Yes and it’s looking promising, but one mobile processor does not prove a nodes success at scale. It definitely implies it though, I’m hopeful that competition is back.
    - 9mo ago
dude250711 9mo ago
[flagged]
- morsch 9mo ago
  Louis Vuitton didn't make 18% of all handbags in 2024.
apercu 9mo ago
"Apple is smart. If the AI capex cycle flattens in late '27 as models hit diminishing returns, does Apple regain pricing power simply by being the only customer that can guarantee wafer commits five years out?" That's the take I would pursue if I were Apple. A quiet threat of "We buy wafers on consumer demand curves. You’re selling them on venture capital and hype"
- deleted 9mo ago
  [deleted]
- bigyabai 9mo ago
  Nvidia is not a venture capital outlet. They are a self-sustaining business with several high-margin customers that will buy out their whole product line faster than any iPhone or Mac. From TSMC's perspective, Apple is the one that needs financial assistance. If they wanted the wafers more than Nvidia, they'd be paying more. But they don't.
  - toasterlovin 9mo ago
    > several high-margin customers This is the "venture capital and hype" being referred to, not Nvidia themselves.
    - apercu 9mo ago
      Thanks. I didn't think my comment was super nuanced.
    - bigyabai 9mo ago
      But Nvidia has had high-profile industry partners for decades. Nintendo isn't "venture capital and hype" nor is PC gaming and HPC datacenter workloads. That line is purified cope.
      - toasterlovin 9mo ago
        But Nvidia wasn't able to compete with Apple for capacity on new process nodes with Nintendo volumes (the concept is laughable; compare Apple device unit volumes to game console unit volumes). What has changed in the semiconductor industry is overwhelming demand for AI focused GPUs, and that is paid for largely with speculative VC money (at this point, at least; AI companies are starting to figure out monetization).
827a 9mo ago
I would also bet significant money that Apple's unique market position will give them the confidence to invest in in-house fabrication before 2030.
- eschneider 9mo ago
  Very much this.
- paulmist 9mo ago
  Would it be feasible for them to buy Intel instead? Starting your own foundry would likely take over a decade.
  - 827a 9mo ago
    Yup; or potentially just purchasing a fab from them, given that Intel has signaled they want to leverage TSMC more, and much of Intel's remaining value is wrapped up in server-grade chips that Apple wouldn't be interested in. But also; Apple is one of the very few companies at their size that seems to have the political environment to make, and more importantly succeed, at decade investments. The iPhone wasn't an obvious success for 5 or 6 years. They started designing their own iPhone chips ~the iPhone 4 iirc, and pundits remarked: this isn't a good idea; today, the M5 in the iPad Pro outperforms every chip made by EVERYONE else in the world, by 25%, at a tenth the power draw and no active cooling (e.g. 9950X3D). Apple Maps (enough said). We're seeing similar investments today, things we could call "failures" that in 10 years we'll think were obviously going to be successful (cough vision pro).
    - bigyabai 9mo ago
      > the M5 in the iPad Pro outperforms every chip made by EVERYONE else in the world No, it does not. The core inside the M5 is faster than every other core design in single-threaded burst performance. That is common for small machines with a low core count and no hyperthreading. The chip itself does not outperform every other chip in the world, nor is it 10x more efficient than the 9950X3D. That's not even napkin math at that point, you're making up numbers with no relation to relevant magnitude.
Spooky23 9mo ago
Apple has to price in the risk of the US government forcing their hand in various ways. They have a negotiating disadvantage.
onion2k 9mo ago
Nvidia have been using TSMC since the Riva 128. That's before Apple started making any of their own silicon. GPUs are easily as predictable as mobile phones.
- AceJohnny2 9mo ago
  > GPUs are easily as predictable as mobile phones They really, absolutely, are not. It's not about "will there be a new hardware", it's about "is their order quantity predictable"
kelnos 9mo ago
On the other hand, it's not like Apple can just switch fabs without any cost or difficulty. Sure, TSMC is undoubtedly happy to have a customer with predictable needs, but Apple is also subject to some level of lock-in.
deleted 9mo ago
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jonas21 9mo ago
AI capex may or may not flatten in the near future (and I don't necessarily see a reason why it would). But smartphone capex already has. Like smartphones, AI chips also have a replacement cycle. AI chips depreciate quickly -- not because the old ones go bad, but because the new ones are so much better in performance and efficiency than the previous generation. While smartphones aren't making huge leaps every year like they used to, AI chips still are -- meaning there's a stronger incentive to upgrade every cycle for these chips than smartphone processors.
- chuckadams 9mo ago
  > AI chips depreciate quickly -- not because the old ones go bad I've heard that it's exactly that, reports of them burning out every 2-3 years. Haven't seen any hard numbers though.
  - TeMPOraL 9mo ago
    Lifetime curve is something they can control. If they can predict replacement rate, makes sense to make chips go bad on the same schedule, saving on manufacturing costs.
nialv7 9mo ago
> the smartphone replacement cycle is the only predictable cash flow people are holding onto their phones for longer: https://www.cnbc.com/2025/11/23/how-device-hoarding-by-americans-is-costing-economy.html https://www.cnbc.com/2025/11/23/how-device-hoarding-by-ameri...
- to11mtm 9mo ago
  Still more predictable than GPU buys in the current climate. Power connector melting aside, GPUs in most cases get replaced less frequently than cell phones, unless of course you have lots of capital/profit infusion to for whatever reason stay ahead of the game. Heck if Apple wanted to be super cheeky, they could probably still pivot on the reserved capacity to do something useful (e.x. revised older design for whatever node they reserved where they can get more chips/wafer for cheaper models.) NVDA on the other hand is burning a lot of good-will in their consumer space, and if a competitor somehow is able to outdo them it could be catastrophic.
  - lovich 9mo ago
    Yea, it’s anecdata, but I only replaced my 1080 ti about 1.5 years ago. Graphical fidelity is at the point that unless some new technology comes out to take advantage of GPUs, I don’t see myself ever upgrading the part. Only replacing it whenever it dies. And that 1080 ti isn’t dead either, I passed the rig onto someone who wanted to get into PC gaming and it’s still going strong. I mostly upgraded because I needed more ram and my motherboards empty slots were full of drywall dust. The phone I’m more liable to upgrade solely due to battery life degradation.
    - RavSS 9mo ago
      I replaced my 1080 Ti recently too (early 2025). I had kept it as my daily GPU since 2017. It was still viable and not in urgent need of a replacement, even though my 1080 Ti is an AIO liquid cooled model from EVGA, so I'm surprised it hasn't leaked yet. It's been put through a lot of stress from overclocking too, and now it lives on inside a homelab server. The 5090 I replaced it with has not been entirely worth it. Expensive GPUs for gaming have had more diminishing returns on improving the gaming experience than ever before, at least in my lifetime.
ak217 9mo ago
That's a really hilarious take given Nvidia's history with TSMC.
DeathArrow 9mo ago
Apple was favored by TSMC because they brought TSMC more money. Now Nvidia is bringing TSMC more money.

rafterydj 9mo ago

I tend to agree with you, feels to me like the root of this is essentially whether foundries will "go all in" on AI like the rest of the S&P 500. But why trade away one trillion-dollar customer for another trillion-dollar customer if the first one is never going away, and the second one might?

Fiveplus 9mo ago
I think it is less of a trade and more of a symbiotic capital cycle, if I can call it that? Nvidia's willingness to pay exorbitant prices for early 2nm wafers subsidizes the R&D and the brutal yield-learning curve for the entire node. But you can't run a sustainable gigafab solely on GPUs...the defect density math is too punishing. You need a high-volume, smaller-die customer (Apple) to come in 18 months later, soak up the remaining 90% of capacity and amortize that depreciation schedule over a decade.
- alex43578 9mo ago
  Isn’t the smaller die aspect more valuable early in the node’s maturity, where defects are less punishing?
  - Fiveplus 9mo ago
    That is the traditional textbook yield curve logic, if I'm not wrong? Smaller area = higher probability of a surviving die on a dirty wafer. But I wonder if the sheer margin on AI silicon basically breaks that rule? If Nvidia can sell a reticle-sized package for 25k-30k USD, they might be perfectly happy paying for a wafer that only yields 30-40% good dies. Apple OTOH operates at consumer electronics price points. They need mature yields (>90%) to make the unit economics of an iPhone work. There's also the binning factor I am curious about. Nvidia can disable 10% of the cores on a defective GPU and sell it as a lower SKU. Does Apple have that same flexibility with a mobile SoC where the thermal or power envelope is so tightly coupled to the battery size?
    - genocidicbunny 9mo ago
      I am curious about the binning factor too since in the past, AMD and Intel have both made use of defect binning to still sell usable chips by disabling cores. Perhaps Apple is able to do the same with their SoCs? It's not likely to be as granular as Nvidia who can disable much smaller areas of the silicon for each of their cores. On the other hand, the specifics of the silicon and the layout of the individual cores, not to mention the spread of defects over the die might mitigate that advantage.
      - ricw 9mo ago
        They do bin their chips. Across the range (A- and M-series) they have the same chip with fewer / disabled cpu and gpu cores. You pray a premium for ones with more cores. Unsure about the chip frequencies - Apple doesn’t disclose those openly from what I know.
    - nebula8804 9mo ago
      I thought they binned CPUs for things like AppleTV and lower cost iPads?
      - jsheard 9mo ago
        Yeah, most of their chips have two or more bins with different core configs, and the lower bins probably use salvaged dies. For example the regular M4 can have 4 P-cores / 6 E-cores / 10 GPU cores, or 3/6/10 cores, or 4/4/8 cores, depending on the device. They even do it on the smaller A-series chips - the A15 could be 2/4/5, 2/4/4, or 2/3/5.
alt227 9mo ago
Why are foundries going 'All In' on AI? They fab chips for customers, doesnt matter what chips they are and who the customer is.'Who will pay the most for us to make their chips first' is the only question TMSC will be asking. The market of the customer is irrelevant.

deleted 9mo ago

[deleted]

epolanski 9mo ago

Regardless of that, fab industry is based on a short and mid term auction-like planning. If Nvidia pays more, Apple has to match.

swiftcoder 9mo ago
> Regardless of that, fab industry is based on a short and mid term auction-like planning Not a system that necessarily works all that well if one player has a short-term ability to vastly outspending all the rest. You can't let all your other customers die just because Nvidia is flush with cash this quarter...
- xp84 9mo ago
  > die Is the argument that Apple will go out of business? AAPL? Wait, > one player has a short-term ability to vastly outspending all the rest. I assure you, Apple has the long-term and short-term ability to spend like a drunken sailor all day and all night, indefinitely, and still not go out of business. Of course they’d prefer not to. But there is no ‘ability to pay’ gap here between these multi-trillion-dollar companies. Apple will be forced to match or beat the offer coming from whoever is paying more. It will cost them a little bit of their hilariously-high margins. If they don’t, they’ll have to build less advanced chips or something. But their survival is not in doubt and TSMC knows that.
- bigyabai 9mo ago
  > Not a system that necessarily works all that well if one player has a short-term ability to vastly outspending all the rest. Well yeah, people were identifying that back when Apple bought out the entirety of the 5nm node for iPhones and e-tchotchkes. It was sorta implicitly assumed that any business that builds better hardware than Apple would boot them out overnight.
  - swiftcoder 9mo ago
    > It was sorta implicitly assumed that any business that builds better hardware than Apple would boot them out overnight It's not "build better hardware" though, it's "continue to ship said hardware for X number of years". If someone buys out the entire fab capacity and then goes under next year, TSMC is left holding the bag

Bombthecat 9mo ago

I doubt that we will hit diminishing returns in AI. We still find new ways to make them faster or cheaper or better or even train themselves... The flat line prediction is now 2 years old...

aaronblohowiak 9mo ago
Feels like top of s curve lately
eikenberry 9mo ago
I thought the prediction was that the scaling of LLMs making them better would plateau, not that all advancement would stop? And that has pretty much happened as all the advancements over the last year or more have been architectural, not from scaling up.
sfn42 9mo ago
You say that, but to me they seem roughly the same as they've been for a good while. Wildly impressive technology, very useful, but also clearly and confidently incorrect a lot. Most of the improvement seems to have come from other avenues - search engine integration, image processing (still blows my mind every time I send a screenshot to a LLM and it gets it) and stuff like that. Sure maybe they do better in some benchmarks, but to me the experience of using LLMs is and has been limited by their tendency to be confidently incorrect which betrays their illusion of intelligence as well as their usefulness. And I don't really see any clear path to getting past this hurdle, I think this may just be about as good as they're gonna get in that regard. Would be great if they prove me wrong.
- Bombthecat 9mo ago
  Deepseek, Nvidia and meta are pumping out one paper after another. New and better things are coming. They will just take time to implement, and I doubt they cancel current training runs. So I guess it will take up to a year for the new things to come out Can the bubble burst in this time, because people lose patience? Of course. But we are far from the end.

anoojb 9mo ago

So let's say TMSC reciprocated Apple's consistency as a customer by giving them preferential treatment for capacity. It's good business after all. However, everyone knows that good faith reciprocity at that scale is not rewarded. Apple is ruthless. There are probably thousands of untold stories of how hard Apple has hammered it's suppliers over the years. While Apple has good consumer brand loyalty, they arguably treat their suppliers relatively poorly compared to the Gold standard like Costco.

bethekidyouwant 9mo ago
Agreed TSMC can do whatever they want. in 2027 no other fabs will match what tsmc has today, anything that requires the latest process node is going to get more expensive, so your apple silicone and your AMD chips
- high_na_euv 9mo ago
  As of today Intel is very around leading node
  - girvo 9mo ago
    I'll believe it when I see it (at scale). I hope 18A is good enough as competition is good, and a weak Intel is bad for us all.
    - high_na_euv 9mo ago
      PTL is already released, on shelves in like 2 weeks.
      - girvo 9mo ago
        Yes and it’s looking promising, but one mobile processor does not prove a nodes success at scale. It definitely implies it though, I’m hopeful that competition is back.
  - 9mo ago

dude250711 9mo ago

[flagged]

morsch 9mo ago
Louis Vuitton didn't make 18% of all handbags in 2024.

apercu 9mo ago

"Apple is smart. If the AI capex cycle flattens in late '27 as models hit diminishing returns, does Apple regain pricing power simply by being the only customer that can guarantee wafer commits five years out?" That's the take I would pursue if I were Apple. A quiet threat of "We buy wafers on consumer demand curves. You’re selling them on venture capital and hype"

deleted 9mo ago
[deleted]
bigyabai 9mo ago
Nvidia is not a venture capital outlet. They are a self-sustaining business with several high-margin customers that will buy out their whole product line faster than any iPhone or Mac. From TSMC's perspective, Apple is the one that needs financial assistance. If they wanted the wafers more than Nvidia, they'd be paying more. But they don't.
- toasterlovin 9mo ago
  > several high-margin customers This is the "venture capital and hype" being referred to, not Nvidia themselves.
  - apercu 9mo ago
    Thanks. I didn't think my comment was super nuanced.
  - bigyabai 9mo ago
    But Nvidia has had high-profile industry partners for decades. Nintendo isn't "venture capital and hype" nor is PC gaming and HPC datacenter workloads. That line is purified cope.
    - toasterlovin 9mo ago
      But Nvidia wasn't able to compete with Apple for capacity on new process nodes with Nintendo volumes (the concept is laughable; compare Apple device unit volumes to game console unit volumes). What has changed in the semiconductor industry is overwhelming demand for AI focused GPUs, and that is paid for largely with speculative VC money (at this point, at least; AI companies are starting to figure out monetization).

827a 9mo ago

I would also bet significant money that Apple's unique market position will give them the confidence to invest in in-house fabrication before 2030.

eschneider 9mo ago
Very much this.
paulmist 9mo ago
Would it be feasible for them to buy Intel instead? Starting your own foundry would likely take over a decade.
- 827a 9mo ago
  Yup; or potentially just purchasing a fab from them, given that Intel has signaled they want to leverage TSMC more, and much of Intel's remaining value is wrapped up in server-grade chips that Apple wouldn't be interested in. But also; Apple is one of the very few companies at their size that seems to have the political environment to make, and more importantly succeed, at decade investments. The iPhone wasn't an obvious success for 5 or 6 years. They started designing their own iPhone chips ~the iPhone 4 iirc, and pundits remarked: this isn't a good idea; today, the M5 in the iPad Pro outperforms every chip made by EVERYONE else in the world, by 25%, at a tenth the power draw and no active cooling (e.g. 9950X3D). Apple Maps (enough said). We're seeing similar investments today, things we could call "failures" that in 10 years we'll think were obviously going to be successful (cough vision pro).
  - bigyabai 9mo ago
    > the M5 in the iPad Pro outperforms every chip made by EVERYONE else in the world No, it does not. The core inside the M5 is faster than every other core design in single-threaded burst performance. That is common for small machines with a low core count and no hyperthreading. The chip itself does not outperform every other chip in the world, nor is it 10x more efficient than the 9950X3D. That's not even napkin math at that point, you're making up numbers with no relation to relevant magnitude.

Spooky23 9mo ago

Apple has to price in the risk of the US government forcing their hand in various ways. They have a negotiating disadvantage.

onion2k 9mo ago

Nvidia have been using TSMC since the Riva 128. That's before Apple started making any of their own silicon. GPUs are easily as predictable as mobile phones.

AceJohnny2 9mo ago
> GPUs are easily as predictable as mobile phones They really, absolutely, are not. It's not about "will there be a new hardware", it's about "is their order quantity predictable"

kelnos 9mo ago

On the other hand, it's not like Apple can just switch fabs without any cost or difficulty. Sure, TSMC is undoubtedly happy to have a customer with predictable needs, but Apple is also subject to some level of lock-in.

deleted 9mo ago

[deleted]

jonas21 9mo ago

AI capex may or may not flatten in the near future (and I don't necessarily see a reason why it would). But smartphone capex already has. Like smartphones, AI chips also have a replacement cycle. AI chips depreciate quickly -- not because the old ones go bad, but because the new ones are so much better in performance and efficiency than the previous generation. While smartphones aren't making huge leaps every year like they used to, AI chips still are -- meaning there's a stronger incentive to upgrade every cycle for these chips than smartphone processors.

chuckadams 9mo ago
> AI chips depreciate quickly -- not because the old ones go bad I've heard that it's exactly that, reports of them burning out every 2-3 years. Haven't seen any hard numbers though.
- TeMPOraL 9mo ago
  Lifetime curve is something they can control. If they can predict replacement rate, makes sense to make chips go bad on the same schedule, saving on manufacturing costs.

nialv7 9mo ago

> the smartphone replacement cycle is the only predictable cash flow people are holding onto their phones for longer: https://www.cnbc.com/2025/11/23/how-device-hoarding-by-americans-is-costing-economy.html https://www.cnbc.com/2025/11/23/how-device-hoarding-by-ameri...

to11mtm 9mo ago
Still more predictable than GPU buys in the current climate. Power connector melting aside, GPUs in most cases get replaced less frequently than cell phones, unless of course you have lots of capital/profit infusion to for whatever reason stay ahead of the game. Heck if Apple wanted to be super cheeky, they could probably still pivot on the reserved capacity to do something useful (e.x. revised older design for whatever node they reserved where they can get more chips/wafer for cheaper models.) NVDA on the other hand is burning a lot of good-will in their consumer space, and if a competitor somehow is able to outdo them it could be catastrophic.
- lovich 9mo ago
  Yea, it’s anecdata, but I only replaced my 1080 ti about 1.5 years ago. Graphical fidelity is at the point that unless some new technology comes out to take advantage of GPUs, I don’t see myself ever upgrading the part. Only replacing it whenever it dies. And that 1080 ti isn’t dead either, I passed the rig onto someone who wanted to get into PC gaming and it’s still going strong. I mostly upgraded because I needed more ram and my motherboards empty slots were full of drywall dust. The phone I’m more liable to upgrade solely due to battery life degradation.
  - RavSS 9mo ago
    I replaced my 1080 Ti recently too (early 2025). I had kept it as my daily GPU since 2017. It was still viable and not in urgent need of a replacement, even though my 1080 Ti is an AIO liquid cooled model from EVGA, so I'm surprised it hasn't leaked yet. It's been put through a lot of stress from overclocking too, and now it lives on inside a homelab server. The 5090 I replaced it with has not been entirely worth it. Expensive GPUs for gaming have had more diminishing returns on improving the gaming experience than ever before, at least in my lifetime.

ak217 9mo ago

That's a really hilarious take given Nvidia's history with TSMC.

DeathArrow 9mo ago

Apple was favored by TSMC because they brought TSMC more money. Now Nvidia is bringing TSMC more money.