This is true many years ago and for many company still stand. You cant, simultaneously design your AMD ZEN CPU, Radeon or Nvidia GPU or FPGA, or other Baseband over two very different Node Tech.
But we are talking about Apple. And we are talking about iPhone.
For people who dont realize the Gigantic number of iOS devices sold using the latest Fab tech. Apple with iPhone 6 and iPad are reaching ( likely to be more ) 150M devices this year. And 6S + iPad Pro will likely break this record. For Reference 2015 will have est 300M PC sold, if we discount AMD, and most of the Intel selling CPU are lower end Pentium, Celeron, Atom on older Node tech, whereas Apple sell most of their Product with latest tech, we are talking about Apple with similar volume as Intel.
The Story, I think there are properly lots of leverage, Samsung Fab without Apple will simply bring down its whole Fab business. Samsung could afford properly lose a dollar on every SoC produce for Apple then to not have Apple's order. And how can TSMC complete with a competitors who lose money to make business?
Coming soon we will have Samsung's own custom ARMv8 CPU out. IF that design have any thing resembles Apple's Custom CPU i guess that will be the final straw.
It's more than that, really. In 2014, Apple sold 194 million iPhones, and about 60 million iPads. Some smaller number of iPod Touch. In 2015, Apple is expected to sell about 240 million iPhones, perhaps 52 million iPads, and some number of iPod Touch.
That's a lot of chips. And it's very profitable. Even though app,es new chips are estimated to cost between $27-35, there are very few versions. On,y two new ones each year come out, and that comprises almost two thirds of the sales. Intel, on the other hand, has dozens of new chips each year, meaning that production lines only make a relatively small number of each, maybe in the low tens of millions for the most popular. While those chips cost, on average, much more, the fact of their shorter production runs means that they never reach the price nadir in production that Apple's do.
Thx for the numbers, I thought those were est 2015 numbers? Anyway yes Apple is already the biggest Fabless Semi Company. Side note it was only in recent 2 - 3 years Intel have smaller batch, customized version of die for different SKU. Even so Intel only produce 8 - 12 different variations, the different SKU on the market are all the same with different bins. Previously Intel produce only one die and bin them across their whole product range.
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If intel can supply quantity that Apple needs than why they both don't do business together unless intel's cost per chip is issue ? If not than fab capacity is only issue for not manufacturing. Intel makes chips for other companies but at way lower volume than Apple needs.
Its about profits. The question is exactly the same as Why Apple dont try to lower their pricing a little for more market share, or have 32GB as Entry level phone. It will reduce their margin, and not a good thing for their stock prices.* Same for Intel, fabing chips makes much smaller margin* compared to Intel selling the whole chip themselves.
*As a Apple Stock holder I have no problem with Apple going with 32GB Entry level, stock prices? Hell yeah as if it is not already heavily discounted. The Lowest P/E in tech segment with the most cash in hand.
*Its not that TSMC dont make much money, but Intel are used to ~60% margin. TSMC are roughly ~30%. So if Intel built Fab for Apple it will dilute their margin. But i think it is all too late for Intel. Apple is very happy with TSMC, which has a very healthy roadmap all the way to 7nm.
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It's more than that, really. In 2014, Apple sold 194 million iPhones, and about 60 million iPads. Some smaller number of iPod Touch. In 2015, Apple is expected to sell about 240 million iPhones, perhaps 52 million iPads, and some number of iPod Touch.
That's a lot of chips. And it's very profitable. Even though app,es new chips are estimated to cost between $27-35, there are very few versions. On,y two new ones each year come out, and that comprises almost two thirds of the sales. Intel, on the other hand, has dozens of new chips each year, meaning that production lines only make a relatively small number of each, maybe in the low tens of millions for the most popular. While those chips cost, on average, much more, the fact of their shorter production runs means that they never reach the price nadir in production that Apple's do.
Thx for the numbers, I thought those were est 2015 numbers? Anyway yes Apple is already the biggest Fabless Semi Company. Side note it was only in recent 2 - 3 years Intel have smaller batch, customized version of die for different SKU. Even so Intel only produce 8 - 12 different variations, the different SKU on the market are all the same with different bins. Previously Intel produce only one die and bin them across their whole product range.
Its about profits. The question is exactly the same as Why Apple dont try to lower their pricing a little for more market share, or have 32GB as Entry level phone. It will reduce their margin, and not a good thing for their stock prices.* Same for Intel, fabing chips makes much smaller margin* compared to Intel selling the whole chip themselves.
*As a Apple Stock holder I have no problem with Apple going with 32GB Entry level, stock prices? Hell yeah as if it is not already heavily discounted. The Lowest P/E in tech segment with the most cash in hand.
*Its not that TSMC dont make much money, but Intel are used to ~60% margin. TSMC are roughly ~30%. So if Intel built Fab for Apple it will dilute their margin. But i think it is all too late for Intel. Apple is very happy with TSMC, which has a very healthy roadmap all the way to 7nm.