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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%

#241

Post by dylan604 »

UncleOxidant wrote: post #199
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…

> TSMC: you'll pay _____ or you can go to the other fab, oh right, you'll pay _____ It wouldn't be easy for Apple to just go to another fab. They'd have to find another vendor with the capacity and then they'd have to tweak things to match the new fab's design rules. Not trivial for something like M* chips. I suspect Intel would be happy to have Apple in their nascent foundry biz, but not sure they would have the cap…

That's the point of the comment I made. TSMC knows that Apple can't just jump ship to another vendor. There isn't another vendor that can do what Apple needs. Currently. As long as that is true, Apple is stuck at TSMC.

Apple could say that they will accept the 6% increase, but then lower their investment in new fabs 6%. I honestly don't know which number is bigger.

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

#242

Post by dylan604 »

nebula8804 wrote: post #218
bombcar wrote: post #168

Earlier quoted context omitted.

Look for large big box stores that conspicuously have a product line absent, or only have a very defined subset of the product available. For awhile iPhones were just completely missing from some larger stores, but it seems Apple has the upper hand there now and they're back in business. And even now Apple holds a very right reign on the prices charged (Best Buy seems to have the most leverage here, as they often sel…

Hmm how do you differentiate between supply chain shortages and this scenario?

Supply chain shortages means you used to see an item, but it is not available at this time. Vendor arrangements means you've never seen Del Monte can corn at Costco, but you've seen Kirkland can corn that tastes just like Del Monte's.

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

#243

Post by ethbr0 »

sixstringtheory wrote: post #221
ras3022 wrote: post #198

Earlier quoted context omitted.

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

Not even a reality distortion field can make something bigger on the inside. :D

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

#244

Post by mrtweetyhack »

UncleOxidant wrote: post #199
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…

> TSMC: you'll pay _____ or you can go to the other fab, oh right, you'll pay _____ It wouldn't be easy for Apple to just go to another fab. They'd have to find another vendor with the capacity and then they'd have to tweak things to match the new fab's design rules. Not trivial for something like M* chips. I suspect Intel would be happy to have Apple in their nascent foundry biz, but not sure they would have the cap…

No post body was provided.

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

#245

Post by ChrisMarshallNY »

ChuckNorris89 wrote: post #214
ChrisMarshallNY wrote: post #157

Earlier quoted context omitted.

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?

Building your own semiconductor fab with good yelds that are profitable is monumentally more complex than all of those things combined. Why do you think only Intel and Samsung are the ones left at the cutting edge anf even they are struggling to keep up with TSMC? If you think Apple can just buy their way into fab success, you don't understand the complexities of semiconductor manufacturing.

> you don't understand the complexities of semiconductor manufacturing.

Eh. Might know a thing or two, but I'm sure you know what you're talking about.

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

#246

Post by splitstud »

dylan604 wrote: post #242
nebula8804 wrote: post #218

Earlier quoted context omitted.

Hmm how do you differentiate between supply chain shortages and this scenario?

Supply chain shortages means you used to see an item, but it is not available at this time. Vendor arrangements means you've never seen Del Monte can corn at Costco, but you've seen Kirkland can corn that tastes just like Del Monte's.

No post body was provided.

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

#247

Post by nyokodo »

ChuckNorris89 wrote: post #214
ChrisMarshallNY wrote: post #157

Earlier quoted context omitted.

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?

Building your own semiconductor fab with good yelds that are profitable is monumentally more complex than all of those things combined. Why do you think only Intel and Samsung are the ones left at the cutting edge anf even they are struggling to keep up with TSMC? If you think Apple can just buy their way into fab success, you don't understand the complexities of semiconductor manufacturing.

> If you think Apple can just buy their way into fab success

No one is saying they can "just" buy their way into fab success. However, I think they do have the cash and clout to make it happen on a decade long timeline, possibly in league with Intel/Samsung or the US Government, or all three, etc. Obviously that would be enormously costly and risky, but any move to eventually do so is a threat to TSMC, so even if they don't do it they have a negotiating position with TSMC right now because the relationship is enormously valuable.

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

#248

Post by nyokodo »

hollerith wrote: post #227
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.

>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.

> 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.

From TSMC chips. Basically if TSMC insists on raising prices to levels above what Apple is prepared to pay they can threaten to move away from TSMC eventually. If TSMC refuses to budge then Apple will have to pay the higher prices in the short to medium term and then expend capital to not be beholden to TSMC over the long term. So then the question is does TSMC value the relationship over the long term or do they value the higher prices in the short to medium term? That could be Apple's negotiating position.

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

#249

Post by captainredbeard »

bombcar wrote: post #140
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…

You can actually deduce the vendors that have influence on the big box buyers if you look carefully enough. And some of the vendors will tell Walmart/Costco to take an airborne intercourse course against rolling pastries. Others will sell a white-label or generic brand to them. After all, it's just business.

Nice Vonnegut bastardization

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

#250

Post by davidf18 »

vineyardmike wrote: post #200
outside1234 wrote: post #192

Earlier quoted context omitted.

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.

No way they could switch in under 5 years. TSMC provides design guidance and knowledge that will be deeply embedded in the design of their chips. It’s not like a print shop where you can send over a pdf. I agree with the diversity angle though. Tim Cook seemed really slow to recognize it, but the last few years apple has accelerated shifting manufacturing. India will now be joining China in producing their latest pho…

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