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1. Crazy to me to think apple can't absorb 6% price hike on chips. their margins are usually so high. 2. But its awesome that apple can say no to price hikes. This is good economics for end users and its a reason why capitalism and markets are often good and produce lower prices
This makes no sense?
M1 / M1 Pro / M1 Max / M1 Ultra were all manufactured on TSMC N5, even though volume production for N5P (improved N5) was already available by the time M1 Pro / Max were released. In fact, A15 (N5P) was released in September '21 whereas M1 Pro / Max (N5) were released in October '21 and Ultra was released in March '22.
M2 is manufactured on N5P, so it makes total sense that M2 Pro / Max / Ultra will also be manufactured on N5P. They're part of the same generation, so it makes sense to produce them on the same node.
This is also most logical from a financial standpoint: the base model M chips and the A chips are the smallest and therefore least expensive to produce on a new node with relatively poor yields and high prices. Once the node has matured a bit more (higher yields / lower prices), you manufacture the bigger chips (Pro / Max), and even later you print the big bois (Ultra)
M2 Pro / Max / Utra were never going to be N3.
1. Crazy to me to think apple can't absorb 6% price hike on chips. their margins are usually so high. 2. But its awesome that apple can say no to price hikes. This is good economics for end users and its a reason why capitalism and markets are often good and produce lower prices
Apple didn’t get rich by writing a lot of checks.
You do not get rich writing unnecessary checks, but you do get rich writing checks towards investments that result in ROI. Such as paying TSMC to develop more advanced chips in exchange for retaining exclusivity for a certain period.
What other options does Apple have? Intel doesn’t manufacture ARM chips (yet) and Samsung is 1+ process nodes behind the upcoming TSMC N3E
The article outlined at least one option that Apple has: stay on the 5nm node for a bit longer. It doesn't seem impossible at all that TSMC would cave/agree to only a 2-3% hike in 6 months. While a greater lead is I'm sure welcome, it's not like Apple isn't _extremely_ well positioned in every market they operate in, even on 5nm.
Kinda crazy to not pay 6% for these gains but that’s just me!
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?
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.
It’s not like TSMC builds the machines. They just operate them, and we all know what happens to the man in the middle.
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?
That was my thought. Can't they just threaten to sell the space to someone else?
Is there a special name for situations where you have only one or very buyers AND sellers at the same time? Like a combination of monopoly and monopsony power? I wonder how prices are discovered in situations like these?
Apparently its called a Bilateral Monopoly
What other options does Apple have? Intel doesn’t manufacture ARM chips (yet) and Samsung is 1+ process nodes behind the upcoming TSMC N3E
The article outlined at least one option that Apple has: stay on the 5nm node for a bit longer. It doesn't seem impossible at all that TSMC would cave/agree to only a 2-3% hike in 6 months. While a greater lead is I'm sure welcome, it's not like Apple isn't _extremely_ well positioned in every market they operate in, even on 5nm.