TSMC will prioritize Apple 'iPhone 13,' car builder chip orders
In a challenging chip manufacturing environment, Apple partner TSMC is reportedly de-prioritizing orders destined for PCs and servers orders, and is instead focusing on car manufacturers, and Apple's needs.
TSMC
Following TSMC's previous estimates that the impact of the current global chip shortage would last a "a couple of years," it is now said to be concentrating on supplying the the car industry and Apple.
According to Digitimes Asia, unnamed sources at the chip maker say that the prioritization is for the third quarter of 2021. It's claimed that TSMC will first give supply priority to car firms and Apple, then secondly to manufacturers of PCs, servers, and networking devices.
Although Apple initially appeared to weather the shortage better than its rivals, because of its high-volume purchasing power, it has more recently begun to see problems.
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TSMC
Following TSMC's previous estimates that the impact of the current global chip shortage would last a "a couple of years," it is now said to be concentrating on supplying the the car industry and Apple.
According to Digitimes Asia, unnamed sources at the chip maker say that the prioritization is for the third quarter of 2021. It's claimed that TSMC will first give supply priority to car firms and Apple, then secondly to manufacturers of PCs, servers, and networking devices.
Although Apple initially appeared to weather the shortage better than its rivals, because of its high-volume purchasing power, it has more recently begun to see problems.
Keep up with everything Apple in the weekly AppleInsider Podcast -- and get a fast news update from AppleInsider Daily. Just say, "Hey, Siri," to your HomePod mini and ask for these podcasts, and our latest HomeKit Insider episode too.If you want an ad-free main AppleInsider Podcast experience, you can support the AppleInsider podcast by subscribing for $5 per month through Apple's Podcasts app, or via Patreon if you prefer any other podcast player.AppleInsider is also bringing you the best Apple-related deals for Amazon Prime Day 2021. There are bargains before, during, and even after Prime Day on June 21 and 22 -- with every deal at your fingertips throughout the event.
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https://www.taipeitimes.com/News/biz/archives/2021/03/09/2003753477
"Taiwan Semiconductor Manufacturing Co’s largest customer accounted for 25 percent of its total revenue last year. Analysts believe the unnamed company to be Apple Inc.
TSMC said that revenue generated from its largest customer rose 36.22 percent from a year earlier, meaning its sales to the customer rose from 23 percent to 25 percent of its total sales.
TSMC said it last year generated consolidated sales of NT$167.39 billion from its second-largest customer, up 9.49 percent from a year earlier.
That data gives some insight into Apple's chip costs. Assuming Apple is responsible for the $11.9b revenue in that article, this would be for around 250 million chips (iPhone + iPad), which is roughly $50 per chip. This is a big reason for Apple to switch from Intel and AMD.
Previously Apple would be paying AMD to make chips with TSMC on an older node and then pay them some profit and they'd pay Intel to make chips on a much older node and pay even more profit. Now they can build the most advanced chips on the most advanced node at minimal cost and increase margins. Even for chips like the highest-end Macs, the costs will be miniscule compared to the $7k+ Intel was asking for and $2k+ AMD gets per GPU. 3nm chips in 2022 will have a density of 300 million transistors per mm^2, over 2x what the M1 has.
"The world’s largest contract chipmaker generated NT$336.78 billion (US$11.9 billion) in consolidated sales from its largest customer last year, accounting for about 25 percent of the total, financial data provided by TSMC showed."
Assuming Apple paid TSMC $11.9b for the 250m chips they shipped, this is $47.60. Maybe Microprocessor Reports is using an industry cost estimate, this estimate is using reported revenue. Apple could have ordered more units in 2020 than they shipped. If they ordered 300m+ chips for $11.9b then it's closer to the $34-38 estimate.
Intel Xeon priced at over $7k:
https://ark.intel.com/content/www/us/en/ark/products/193754/intel-xeon-w-3275m-processor-38-5m-cache-2-50-ghz.html
Apple charges $7k for this upgrade so they'll be paying Intel less but it's a huge difference between a <$50 chip and any of Intel's multiple thousand dollar chips. Currently the highest Mac Pro performance spec costs around $24k (around $8k Intel parts marked up, $10k AMD parts marked up). With Apple ditching Intel and AMD, that high-spec machine can drop to a fraction of the price. Even if Apple charges $2k for a high-end Apple Silicon chip, they can make the same or more profit while cutting the price by $16k.
China deciding to "be more aggressive" with Taiwan isn't going to work without invasion, and so far, China doesn't have the amphibious assault capability for success. Sure, the PRC could blow the shit out of Taiwan, but I'm under the impression that they want the technical and economic wealth of Taiwan, not a burned out husk of an island.
So, let's actually get back to building supply chain resilience within the many democracies of the world, and halt any more capitulation to the PRC.
https://www.nytimes.com/2021/06/22/business/economy/china-vaccines-covid-outbreak.html?smid=tw-share
I see where you went with the Mac Pro. Yes, Intel’s top chip Apple bought is considerably more expensive than the entry level version. But likely Apple is following fairly standard pricing methodologies, and is charging the customer twice what they paid, maybe more. Remember that product prices are almost always between 2.5 - 3.5 the price of the parts. That’s pretty much standard pricing practice.