More Apple chips could be made in US thanks to TSMC & Intel joint venture
Apple could benefit from more chip fab availability in the United States in the coming years thanks to a joint venture that will bring TSMC talent to Intel foundries.
Apple's A16 is being made in Arizona
The preliminary agreement between the competitors will give TSMC a 20% stake in the combined company, while Intel and other semiconductor companies will own the majority of shares. TSMC will bring talent and manufacturing methods to teach American employees and get the US-based Intel foundries running.
According to the the report from The Information, discussions are still underway between Intel and TSMC. Ideally it will mean making more TSMC chips in the United States.
However, regardless of the deal, the process will take some time. Intel's foundries are filled with equipment that is useless for TSMC's processes, so that will have to be sold or scrapped. Getting the right equipment, employees trained, and everything running efficiently could be a years-long process.
Apple will likely benefit from the joint venture, eventually, as it is a customer of TSMC's. The company designs the chips and provides those designs to TSMC, who manufactures them.
The news arrives weeks after Apple committed $500 billion to US manufacturing and TSMC committed $100 billion. Part of that is going to creating foundries in Arizona.
As President Trump's tariffs rock the markets and create the potential for increased prices across the board, it may be of some relief to hear about these commitments. However, it will take time before TSMC gets the new US-based factories going.
The TSMC foundry already operational in Arizona started making A16 processors in September, 2024. It is expected to hit production quotas in the first half of 2025, but it is still just a small portion of Apple's chip needs.
For the foreseeable future, as long as the existing tariffs are in place, Apple's products will be heavily affected. And no matter how much manufacturing and assembly moves to the United States, there will always be some need to import goods for products.
Read on AppleInsider
Comments
Intel's problems were like Apple's problems in the 1990s before they bought NeXT. Very very poor marketing, sales and engineering decisions were being made, year after year after year. Those are made at the VP and senior VP levels. Apple was able to get out of their funk by having NeXT employees take over those positions. The single most important one was having Avie Tevanian taking over software engineering. This enabled Apple to ship viable product, including Mac OS 8. It wasn't called a reverse takeover for nothing, where you can say NeXT bought Apple for -430m USD. Forstall was incredibly successful user interface design, OS design, and shipping. Rubenstein took over hardware. Tim Cook came in to fix operations, and most important one of Steve Jobs being CEO.
Intel can't be fixed without changing all the critical management and leadership positions. That usually requires a reorganization from a takeover. Intel's number one problem is that the management of their fab technology has been broken for about 12 years now. The decisions that made 10nm a clusterfuck likely happened around 2012 to 2013 or so, and bad decisions after that only compounded it. I bet someone can write a very good sunk-cost fallacy book on it, with gigantic heapings of hubris. This was about a 7, 8 year process. That's what it takes for a gigantic dominant company like Intel to fall. Bad decisions every year for multiple years.
So, who's in charge with this deal? Are they fixing Intel fabs or are they replacing them with TSMC fabs? Which way is the money flowing?
Handing over keys to US manufacturing while turning off US R&D is unexpected. Doing so to a company from an area that US sees as part of China is even more so.
We need for Intel to be American and deliver future innovation from outside China.
Intel needs TSMC in order to be competitive. That's the only reason I can think of for Intel wanting this deal. Why TSMC would want it? I don't really know. There really aren't any benefits for them. Other than perhaps to diversify their fab capacity to mitigate anti-globalist governments.
Nobody wants Intel's fabs because they suck. There are very good reasons why Apple switched away from Intel processors, why Apple dropped Intel cell modems, why Intel abandoned cell modems, why Intel can't make a competitive smartphone SoC, why they can't convince GPU and AI accelerator makers to use Intel's fabs over TSMC's or Samsung's. None of it has anything to do with being American, Taiwanese or from Ceres, our closest dwarf planet. It bears repeating: Intel fabs suck. They are not competitive. There aren't any keys to hand over. What Intel wants is for their fabs to fixed, for them to be properly managed.
Lastly, it is Highlanderism. There can only be one. Everyone knows about Moore's Law: an observation that CMOS chip transistor densities were doubling every 18 to 24 months. Unfortunately, no one knows that Moore had more than one observation. He also said that cost to develop the next fab, that gets you those densities doublings, also doubles. If a 10nm fab costs $5b to develop, a 7nm fab would cost $10b, and a 5nm fab would cost $20b. Advanced fabs today (2nm, 1.5nm, ...) are nation-state capital endeavors.
This means a foundry, a chip fab, has to find more and more markets to dominate in order to accrue enough money to fund the next fab. You either win and move on, or you will go out of business. Since human population is not doubling, it's actually predicted to drop relatively soon, that means these companies are running out of markets to enter. It is inevitable that there will one be 1 or 2 companies that can fab <2nm chips, and anything more advanced will be nation-state subsidized, on order $20b to $50b per year type of numbers. Not only that, multiple nations will have to band together to get to the next CMOS fab after that.
By the way, almost all of the machinery and parts come from Europe and East Asia in a modern chip making factory, you might be able to get an exemption, but what sort of example does that set for the rest of the population when you tell them that they must comply with a massive tax increase but others can skate over it if they’re privileged enough that would almost be like Prohibition remember that fiasco? I don’t want another avenue of grifting created more exceptions would do that. We have enough problems.
They were always going to win. It’s a different culture.
I am more and more convinced that Trump will just let the Chinese roll into Taiwan and have them take over the country in his “zones of influence” mindset that might makes right.
I suspect we don’t have a choice but to attempt to move over some feeble production lines but we won’t be able to duplicate the sum total of their greatness.
The Romanians wanted a high-speed rail line from their capital going towards Western Europe, but they listened to a few of the Western European countries saying no hold on and they decided to back off from using the Chinese to help them build that high speed rail line guess what they have no high speed rail line going towards Western Europe at this point Romanians may have made a mistake. They listened to the lecture from the Western Europeans and in return got no help in building a high speed rail system in their country maybe they got another lecture…..
https://newseu.cgtn.com/news/2023-01-21/Experts-eye-gains-from-new-China-backed-Belgrade-to-Budapest-rail-line-1gJiwTkNkNW/index.html
https://en.wikipedia.org/wiki/High-speed_rail_in_Indonesia