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Apple Has Reportedly Rejected TSMC's Chip Price Hike of 6%

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Re: Apple Has Reportedly Rejected TSMC's Chip Price Hike of 6%

#101

Post by geodel »

rjzzleep wrote: post #86
geodel wrote: post #82

Earlier quoted context omitted.

Out of those multistep process Apple has done very large part of designing Chip, designing OS to use chip optimally. Apple user market is not the one where they compare Mac with Wintel laptop. They find out M2 is crap in every way compare to Intel or AMD chip and then go on to buy a HP Pavilion or some such. Besides with Perf/watt gap Mac/Iphone and rest Apple can wait it out for at least a year or maybe even longer.

They bought companies that have designed chips for a DECADE, and then that took another decade of experience. And even if Apple went out and bought an old fab or global foundries it will take a decade to build out the capacity with a worsening economic crisis I'm not sure how realistic that is. But sure, it is possible.

I guess you are just missing the point that Apple can wait out for a year or longer and keep using 5nm TSMC chip with more core, components or whatever. Once the supposedly "premium paying" clients buy the best 3nm chip, Apple can still be fine buying the rest. There is no personal ego hurt, if it still does not workout after 1-2 year of negotiation lawyers can go sign new contract for higher price. It is not like "Guys, TSMC asked for more money, so stop everything and work on setting up chip making factory in Tennessee however long it takes".

Also worsening economic crisis will hit TSMC much sooner than Apple.

Re: Apple Has Reportedly Rejected TSMC's Chip Price Hike of 6%

#102

Post by meragrin_ »

mschuster91 wrote: post #54
meragrin_ wrote: post #46

Earlier quoted context omitted.

But TSMC can delay 3nm until it has the clients. Enough of the "smaller" players will eventually want and pay for it. Apple is far more dependent on TSMC than TSMC is on Apple. Where else is Apple going to go to realistically? It would likely take 3-5 years to fund another competitor to bring it up to what is needed.

> It would likely take 3-5 years to fund another competitor to bring it up to what is needed. Apple has done precisely this multiple times or even bought up companies to have that level of vertical integration. With Apple's cash war chest, they can afford everything.

> With Apple's cash war chest, they can afford everything.

Including TSMC's price. When push comes to shove, accepting the price hike would likely be the cheapest option.

Re: Apple Has Reportedly Rejected TSMC's Chip Price Hike of 6%

#103

Post by mrweasel »

madeofpalk wrote: post #96
_kbh_ wrote: post #56

Earlier quoted context omitted.

Considering Apple funds a lot of TSMC's R&D I dare say they have a lot of leverage if they really wanna push it.

It appears they both equally need each other. If TMSC rejects Apple, what is Apple going to do? Use Intel chips in iPhones?

I'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.

Re: Apple Has Reportedly Rejected TSMC's Chip Price Hike of 6%

#105

Post by sva_ »

atonse wrote: post #6

I'd love to be a fly on the wall during these negotiations. Just to see what the heck they even talk about, what information each party comes armed with, and what kinds of concessions get offered. I mean it isn't just a "we'll lower this" I bet there's lots of juicy confidential future roadmap stuff, things like "Ok we'll help you invest in this _____ tech and machinery but you have to knock off half a cent" or who k…

I have doubts that a fly posseses sufficient neuronal capacity to parse human language. Furthermore I'm also unsure if the hearing system of a fly would be sophisticated enough to capture the nuances of spoken language.

Re: Apple Has Reportedly Rejected TSMC's Chip Price Hike of 6%

#106

Post by wheelie_boy »

atonse wrote: post #6

I'd love to be a fly on the wall during these negotiations. Just to see what the heck they even talk about, what information each party comes armed with, and what kinds of concessions get offered. I mean it isn't just a "we'll lower this" I bet there's lots of juicy confidential future roadmap stuff, things like "Ok we'll help you invest in this _____ tech and machinery but you have to knock off half a cent" or who k…

One thing I'm wondering about is which side leaked this news item, and what their goal was

Re: Apple Has Reportedly Rejected TSMC's Chip Price Hike of 6%

#107

Post by mrweasel »

webmobdev wrote: post #9

Apple has more to lose here as they've bet their future on Apple Silicons currently only manufactured at TSMC. So it is interesting to see them still trying to arm-twist TSMC - would love to see their playbook as this is something they are known to do with all their suppliers.

My thinking is that Apple is also the only customer that could fund the development of a competitor. I doubt that Apple would want to run their own fab, but they could help fund the development of 3nm at either GlobalFoundries or Intel.

Re: Apple Has Reportedly Rejected TSMC's Chip Price Hike of 6%

#108

Post by KptMarchewa »

colejohnson66 wrote: post #89
_kbh_ wrote: post #56

Earlier quoted context omitted.

Considering Apple funds a lot of TSMC's R&D I dare say they have a lot of leverage if they really wanna push it.

But 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.

Intel was at the same position as TSMC now - there was no competing supplier. Apple decided to become one themselves.

Re: Apple Has Reportedly Rejected TSMC's Chip Price Hike of 6%

#109

Post by Scoundreller »

JumpCrisscross wrote: post #55
alphabetting wrote: post #7

TSMC charging 6% more for the 3nm process seems reasonable. Article notes Apple accounts for 25% of their revenue and says this gives them leverage over TSMC but aren't they the only 3nm player in town?

> charging 6% more for the 3nm process seems reasonable I imagine the negotiations largely centre around timeline and quantity guarantees, as well as capability. Apple is cutting back iPhone Pro production [1]. If 3nm won't enable features that sell more iPhones, or if the market is shifting from a feature focus to one on costs, 6% more for 3nm may make sticking with five more profitable. [1] https://www.bloomberg.co…

Any decrease in the photolithographic process size decreases power consumption (and reliability, electromigration for the win!)

Re: Apple Has Reportedly Rejected TSMC's Chip Price Hike of 6%

#110

Post by _kbh_ »

colejohnson66 wrote: post #89
_kbh_ wrote: post #56

Earlier quoted context omitted.

Considering Apple funds a lot of TSMC's R&D I dare say they have a lot of leverage if they really wanna push it.

But 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.

Apple 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.

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