iPhone will insulate TSMC from negative financial effects of US trade war with China

Posted:
in iPhone
Taiwan-based chip manufacturer TSMC is predicting modest growth in the new quarter, suggesting that production of smartphone chips -- particularly for Apple's iPhone -- will offset not just weakness in cryptocurrency mining, but risks caused by the ongoing trade war between the U.S. and China.

Apple iPhone XR


"Despite the current market uncertainties, our business will benefit from a continued steep ramp [up] of 7 nanometer for several high-end smartphones," CFO Lora Ho said during an earnings conference, according to Reuters. Q4 revenue is expected to hit between $9.35 billion and $9.45 billion, up from $9.21 billion a year ago.

The iPhone XS is the first phone anywhere to use a 7-nanometer processor, the A12 Bionic. Other chip manufacturers like GlobalFoundries have yet to shrink to that size, which improves size-to-performance ratios while reducing power consumption. The iPhone XR, shipping later this month, will also sport an A12.

The U.S.-China trade war has so far left Apple relatively unaffected. If it escalates however it could potentially make iPhones more expensive to produce, since much of Apple's supply chain is in China, and assembly is handled almost entirely at Chinese factories.

Turning elsewhere may be difficult if not impossible, not just because of TSMC's technology but a lack of sufficient infrastructure. U.S. President Donald Trump has encouraged companies like Apple to bring more manufacturing to the U.S., but the country is missing both the factories and the labor pool needed to immediately meet Apple's demands.

Comments

  • Reply 1 of 4
    Apple really needs to diversify their supply chains & manufacturing out of China little by little. It should ask it’s suppliers to put more resources into India ,South Africa & other poorer regions to mitigate risk .
  • Reply 2 of 4
    maestro64maestro64 Posts: 4,485member
    Apple really needs to diversify their supply chains & manufacturing out of China little by little. It should ask it’s suppliers to put more resources into India ,South Africa & other poorer regions to mitigate risk .
    Yeah great idea in an ideal world, but not all places are created equal.

    There has been many attempts to put high tech production in south Africa and it fails. India has a long way to go with their infrastructure before any meaning full tech production can be put there. Thailand already have a thriving tech sector and Vietnam is trying. Apple can not just drop a plant in the middle of field in these country without lots of other things happen. Chine heavily invested in its infrastructure over the last 30 yrs, now of these other counties are doing the same. China pull of the field of dreams, build it and they will come. Companies could not ignore going to China to have product made.
  • Reply 3 of 4
    tzeshantzeshan Posts: 1,894member
    Apple really needs to diversify their supply chains & manufacturing out of China little by little. It should ask it’s suppliers to put more resources into India ,South Africa & other poorer regions to mitigate risk .
    India has tried to lure Apple for several years now. It did not bear big fruit as you can see. 
  • Reply 4 of 4
    wizard69wizard69 Posts: 12,720member
    First off why is Apple insider constantly promoting the idea that the labor force and factories don’t exit in the USA?    Global just laid off a bunch of technical people.   Beyond that where do they think the equipment to put in these factories comes from?    The reality is there is a huge labor pool willing to work for decent companies.  Maybe Apple is afraid that they can’t get away with the slave labor mentality practiced in China but if that is ignored there is plenty of opportunity in the USA.  

    The next issue is TSMC is based in Tiawan not China.   If anything Tiawan benefits from the Chinese trade sanctions.    That is if the sanction even stay in place.   The goal here isn’t a trade War some assume but rather an end to the predatory practices seen in China and a little balance in trade.  What is perplexing here is that it would be to Chinas benefit to open up trade with the rest of the world.  
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