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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%

#221

Post by sixstringtheory »

ras3022 wrote: post #198
bombcar wrote: post #150

Earlier quoted context omitted.

Can we be sure Apple hasn't been quietly building a fab or at least fab expertise somewhere in the bowels of Cupertino? Do we have enough insight into ASML to be sure they haven't purchased even older fab equipment?

This is what the TSMC construction site in Arizona looks like. https://www.bizjournals.com/phoenix/news/2022/05/26/tsmc-pho... They’re probably not hiding something like that in Cupertino.

It’s in basement level 2 under the mothership, directly under the Apple Car test track on basement level 1

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

#222

Post by jbverschoor »

MangoCoffee wrote: post #93
jbverschoor wrote: post #26

Earlier quoted context omitted.

AFAIK TSMC is operating Apple’s machines. If they want, and the contract allows, they can ship the machines somewhere else, and operate them there themselves or with another partner. It’s not like TSMC builds the machines. They just operate them, and we all know what happens to the man in the middle.

>It’s not like TSMC builds the machines. They just operate them you clearly have no idea on chip manufacturing. if foundry just operate machine then why GlobalFoundries licenses Samsung 14nm? it just operating machines, right? just operating machines, why you need to licenses the process? isn't ASML or other machine vendors cover everything you need? just operating machines required R&D on operating machines? https:/…

Hmm.. I think I've mixed up them and other manufacturing partners.

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

#223

Post by cosmodisk »

canjobear wrote: post #183
fckgw wrote: post #170

Earlier quoted context omitted.

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-...

Am I supposed to feel sorry for Vlasic here? The upshot is that I get cheaper pickles.

You should, because this kind of behaviour ripples through so many companies, that I wouldn't be surprised if you actually not on the receiving end of things. Retailer lowballs the manufacturer. The manufacturer then needs to lowball someone too, probably starting from its employees. Also the supplier who can be anything from local hardware store to some IT giant.

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

#224

Post by cosmodisk »

WastingMyTime89 wrote: post #116
discordance wrote: post #62

Earlier quoted context omitted.

There was a post on HN a few days ago showing the negotation emails between Jobs and NewsCorp/James Murdoch: https://news.ycombinator.com/item?id=5752212

Murdoch e-mails are nice in that they nicely highlight the multiple fronts nature of negotiating where you can often find compromise by shifting how you approach the problem. The way Jobs closes it is quite unusual however because in this case NewsCorp were late movers. Apple had already reached terms with all their competitors and could put on the table a take it or leave it offer which Murdoch couldn’t refuse. I wa…

What you witnessed proves bike shedding is real. I'm in much smaller league when it comes to budgets, but lets just say I had longer arguments about a budget for a filing cabinet than a half year software project.

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

#225

Post by 0x457 »

meragrin_ wrote: post #102
mschuster91 wrote: post #54

Earlier quoted context omitted.

> 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.

Apple is about long-term. Short-term, yes, accepting the hike is the cheapest. However, it opens you up for future price hikes. Yeah, they can't just switch to Samsung or acquire and uplift GloFo, join venture with Intel also won't work. Long-term, though, they can start working on this.

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

#226

Post by eternalban »

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…

Apple: We have 200 billion dollars in cash. That's close to CCP's defense budget for '21.

Taiwan:?

Apple: We also have the technology.

Taiwan: ??

Apple: Did we ever tell you about our iSoldier project?

["parody. not to be taken seriously"]

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

#227

Post by hollerith »

nyokodo wrote: post #98
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 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.

>over the next decade or two

Sure, but how are they going to produce iPads and iPhones before then? They can't have more than a year's worth of CPUs stockpiled.

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

#228

Post by [deleted] »

outside1234 wrote: post #192
dylan604 wrote: post #69

Earlier quoted context omitted.

Apple: we'll pay no more for this item than ____ TSMC: you'll pay _____ or you can go to the other fab, oh right, you'll pay _____ -------- vendorSellingToBigBox: we would like _____ per unit of our product bigBoxBuyer: that's nice. we'll pay 40%______ per unit. you'll sell extremelyLargeNumberOfUnits, and make it up in volume. oh, if you don't sell a minimum number, you have to buy all of the unsold items back from…

Remember that Intel's fabs are waiting in the wings and that I would bet dollars to donuts that Intel is talking with Apple. TSMC's position in that context is less strong than you'd imagine, especially since Apple has to be thinking that they want to diversify away from Taiwan and China to avoid "Russia risk" of having their supply shut off to zero suddenly when China does something crazy.

[deleted]

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

#229

Post by 0x457 »

marticode wrote: post #76
mschuster91 wrote: post #74

Earlier quoted context omitted.

Regulatory agencies can stop them from buying TSMC, but they cannot prevent Apple from creating its own fab business.

Sure, but good luck with that endeavor. Samsung and Intel are struggling to keep up with TSMC despite decades of expertise in the field and very deep pockets, so starting from scratch even with infinite money isn't gonna be a picnic. And won't solve Apple problem in the short term.

They struggle because Apple paid upfront for capacity that didn't exist. That allowed TSMC to buildup capacity and secure lithography machines from ASML.

Intel struggled because of piss-poor decisions by execs:

- Reduce stake in ASML

- Not use EUV for 10nm

- 14nm++++++++++

- That was fine (for some time) because Intel had no competition from AMD

- Thinking that 4 cores 8 thread is what consumer needs (if it weren't for AMD we'd still top of the line i7, or how they call it today i9, would still have 4 cores and 8 threads)

- Not seeing that new node is getting more and more expensive in terms of R&D and that pure-play fabs have gigantic advantage

When AMD Zen happened, Intel got caught with its pants down.

Samsung "struggling" because they couldn't outbid TSMC for EUV machinery (wonder where TSMC got money from...)

Capacity for cutting-edge nodes is limited purely on how fast EUV machinery can be delivered. Currently, it's limited by ASML production capacity.

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

#230

Post by epberry »

foobiekr wrote: post #216
epberry wrote: post #34

Earlier quoted context omitted.

Yeah absolutely. Another huge thing I got some window into at Qualcomm is technical validation. So Apple is going to be looking for proof that the chips deliver and TSMC is going to be pushing back against high expectations on that front.

Qualcomm is absolutely brutal as a vendor. They pursue % of revenue deals instead of selling chips at $Y. They can only get away with it for lte/5g because Broadcom and others totally dropped the ball.

Yep they are extremely aggressive. The technology is also extremely hard though.
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