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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%

#171

Post by ras3022 »

ethbr0 wrote: post #87
jejeyyy77 wrote: post #52

Earlier quoted context omitted.

Probably a lot less interesting than it seems because it's not like Tim Cook comes into a board room to negotiate. Most likely middle managers/directors emailing each other.

> Most likely middle managers/directors emailing each other. Pretty much like sovereign nations negotiating treaties. Which is an apt metaphor, because neither Apple nor TSMC has the ability to force the other to do anything. So, negotiations become a crawl to find a mutually-acceptable local optimum. Which ends up with both getting things they see as strategic priorities, while compromising on things they care about…

Exactly. And they pretty much have to make a deal because if they don’t it’s mutually assured destruction.

There’s so seller like TSMC and no buyer like Apple.

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

#172

Post by bombcar »

gizmo wrote: post #166
bombcar wrote: post #144

Earlier quoted context omitted.

It may take time, and it may take more money than people want to spend, but I don't see how it can cost much more than half a trillion dollars, since you could just buy TSMC for less than that.

1) TSMC is not for sale. It's of national importance to Taiwan. 2) There is only one TSMC. If you could just buy one for 500bn the EU would have bought 3 already. Building your own TSMC from scratch takes a decade, if not longer.

If it takes a decade the time to start is now.

I bet if you try the US and EU quietly tell you to stop, because Taiwan without a TSMC monopoly would be very scared.

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

#173

Post by Crosseye_Jack »

_kbh_ wrote: post #110
colejohnson66 wrote: post #89

Earlier quoted context omitted.

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…

> 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).

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

#174

Post by philjohn »

KptMarchewa wrote: post #108
colejohnson66 wrote: post #89

Earlier quoted context omitted.

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.

Depends on the reality of the deal TSMC has with ASML - those machines aren't exactly quick to ramp up production of.

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

#175

Post by moonchrome »

sangnoir wrote: post #165
Joeri wrote: post #160

Earlier quoted context omitted.

But will they keep taking that fab capacity over many years and fund the R&D of the next process nodes by buying up guaranteed capacity ahead of time? Apple has been a good partner to TSMC and it would not be wise to replace them for short term gain.

TSMC is not hurting for cash and can easily shoulder the risks - or sell bonds if they'd like prefer to keep the warchest full. There is a long list of customers who'd kill for a chance to get (additional) capacity of the leading edge node process for years at a time (AMD, Nvidia, Google, Amazon, and the rest of the companies giving TSMC the other 75% of revenue)

> There is a long list of customers who'd kill for a chance to get (additional) capacity of the leading edge node process for years at a time

Is there? Seems like we're heading for a recession and reduced demand - at higher prices I wouldn't be surprised existing customers cut back on existing capacity.

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

#176

Post by GeekyBear »

ChrisMarshallNY wrote: post #157
nyokodo wrote: post #98

Earlier quoted context omitted.

> 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.

If 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?

Remember when there was no way Apple would shift their SOC production away from Samsung?

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

#177

Post by ComputerGuru »

fckgw wrote: post #170
AaronFriel wrote: post #154

Earlier quoted context omitted.

Walmart will also do this intentionally to their vendors, or engage in what I call temporal arbitrage. It hurts Walmart as a business very little to stop selling Vendor X goods on their shelves when there are substitutes available. However, for Vendor X it's often the case that Vendor X cannot adjust their output as quickly as Walmart can take the product off shelves. That action, taking them off the shelves for even…

I often think about the pickle story about how Wal-Mart can bully companies and their quest for always low prices have ripple effects. https://www.barnesandnoble.com/readouts/the-wal-mart-effect-...

Thanks for linking that. I’ve heard horror stories and this is just another nail in the coffin.

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

#178

Post by rowanG077 »

mirzap wrote: post #124
petesergeant wrote: post #112

Earlier quoted context omitted.

Say "OK, for now!", and then drop some of its gigantic cash pile into helping another supplier that it part-owns become a real competitor

I don't think you can just drop a pile of cash and create a competitor to TSMC. Even some state actors can not achieve that. I think TSMC has leverage here, and it will have for long time to come.

Of course you can. China is doing it right now without ASML even. There is nothing special about TSMC here. It's just funding and time. If Apple wanted to I wouldn't doubt they could reach cutting edge tech level within 5 to 10 years. It would cost enormous amounts of money and would probably be a very bad business move. But technically there is no problem.

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

#179

Post by e40 »

ren_engineer wrote: post #146
Maursault wrote: post #127

Earlier quoted context omitted.

> The only real option Apple would have... TSMC has a market cap of $356B and maybe $30B in cash. Apple has a market cap of $3.25T and over $200B in cash. Surely you are overlooking a possible option here, which is Apple acquiring TSMC. I don't see it as likely, but it is an option.

Taiwan's government would never allow TSMC to be acquired, it's key to their national security

If Apple owned TSMC, wouldn't that make Taiwan more secure, since the US would have more of an interest?
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