rmoo

Guys, this isn't a story.
1. Intel already announced back in 2020 that they were going to use TSMC in 2022 as part of their transition year from 10nm to 7nm. (Technically Intel has been producing CPUs on their 10nm process since 2019, but they only achieved the ability to exceed 4 cores on it in 2021). 
2. Only GPUs (a new product for Intel), certain Xeon CPUs (that ran into issues with Intel manufacturing them on their 10nm node) and Atom CPUs (their small core CPU that was created for their failed attempt at making smartphone and tablet CPUs ... I have no idea what they are going to be used for, maybe Windows 11 tablets) are going to be manufactured at TSMC. The vast majority of their chips - laptop, desktop and some Xeon - are going to be manufactured on Intel's 10nm node. 
3. Intel already signed a deal to use TSMC's 6nm and 4nm nodes for this purpose. The first batch of GPUs is already being manufactured on this node: https://www.pcgamer.com/intel-alchemist-gpu-tsmc-6nm-process/ so all that is happening here is Intel's attempt to upgrade from the 4nm node to the 3nm node for the other half of the deal. Why is Intel doing this? Because AMD is very justifiably angry at TSMC for delaying their Zen4 from 4Q2021 to 3Q2022 (which allowed Intel to use Alder Lake to narrow the gap on process size and beat AMD in offering DDR5 and PCIe 5 ) and increasing their prices for the privilege. As a result, AMD is jumping ship to Samsung and their 3nm process: https://wccftech.com/amd-rumored-to-become-samsungs-first-3nm-customer-along-with-65-revenue-growth/

Now please note that Intel always preferred the 3nm process. TSMC suggested that they use 4nm instead because they intended to serve Apple and AMD first. But now that AMD won't be using TSMC's 3nm capacity, Intel is merely asking TSMC if that provides an opening to use 3nm instead of 4nm. So, Intel is likely asking "what is the maximum number of chips that you can fab for us while still accommodating Apple"? Unlike AMD, Intel doesn't need more than a few million GPUs and Xeon/Atom CPUs ... 10 million max likely. Whatever number TSMC will state that they can offer, Intel will buy.

That is all that is going on folks. In 2023, Intel will be back to using their foundry exclusively. The only interesting part is that TSMC may have lost AMD to Samsung for good. TSMC is fighting back by trying to get Qualcomm to choose its 3nm node over Samsung's for their flagship SOCs, and Qualcomm is listening to their pitch (no final decision yet). Also, Nvidia was frustrated with yield problems on Samsung's 8nm node - which left them unable to leave AMD in the dust because of TSMC's inability to manufacture enough GPUs for for them - so they are shifting their entire GPU operation to the 5nm and 6nm nodes that Apple and MediaTek are abandoning. However, Intel is aggressively pursuing Qualcomm, Nvidia and Google for their 7nm node starting in 2023. Samsung's new foundry in Texas is basically being built to counteract Intel's new foundries. 

Now that Samsung has caught up to TSMC - they will actually start mass production on their 3nm node before TSMC will - and Intel narrowing the gap with both (their 7nm is equivalent to TSMC 6nm and Samsung 5nm), the foundry wars begun have they. It is going to be neat to watch.

lmasanti said:

Qualcomm is saying: “Attention Shareholders: We are going the way of Intel with Apple!”

Intel had record profits in 2020 and is on pace to have record profits again in 2021. 2022 will be even better for them because of the combined benefits of finally producing CPUs that outperform AMD - though at the cost of A LOT of power - with Alder Lake as well as joining Nvidia and AMD in the GPU game. So yes, Intel is fine and Qualcomm is going to be fine also.

There are certain areas where market share does matter, and being a component supplier is one of them. Apple has only 15% of the smartphone market and 35% of the tablet market (with very few iPads having mobile radios to begin with). Qualcomm won't miss much from their $23 billion annual revenue by losing money on the $40 modems that it sells Apple. And no, they don't need to sell very many CPUs for Windows on ARM devices to make it up. Qualcomm's next big bet is on CPUs and platforms for IoT and AI, and if that pays off - though Nvidia, AMD, Intel and Samsung are competitors there - it will more than make up for the lost Apple modem revenue.

It is losing ground in the Android and ChromeOS CPU device market to MediaTek - and potentially Samsung - that threatens Qualcomm. Just as AMD is a much bigger threat to Intel than Apple will ever be because both are going after the same Windows and ChromeOS (for PCs) and Windows and Linux (for servers) market share that is much bigger, MediaTek and Samsung are bigger threats to Qualcomm. MediaTek is now the #1 chipmaker globally - surpassing Qualcomm - and Samsung in addition to stealing Google's business from Qualcomm is going to start replacing Qualcomm SOCs with their own Exynos SOCs in their midrange phones starting in 2022. 

blastdoor said:

For the other 80%, I wonder if Apple will need to pay Qualcomm some patent royalties. 

No, they won't. The royalties are for 3G, and AT&T, Verizon and T-Mobile are trying their level best to get the feds to finally allow them to shut their 3G networks down. Various medical and emergency alert entities that still use 3G - and some 2G - tech have thus far successfully petitioned the feds to prevent the mobile telcos from shutting them off, even though the telcos have warned them for like 10 years that the legacy services were going away, and they want to repurpose the spectrums and hardware to increase 5G coverage and begin preparations for 6G (plus the fact that they have longed ceased making money off 2G and 3G and are being forced by the feds to keep providing it at a loss). 

Even if the legacy network users are successful in forcing the telcos to keep 3G going, Google finally crossed the line in the sand by shipping the Pixel 6 with a Samsung Exynos modem, not a Qualcomm one. It is the first time a Samsung modem has ever been used in the United States, and it doesn't support the legacy networks. It only supports 4G and 5G. Meaning that neither Google or Samsung is paying Qualcomm royalties. Apple can certainly follow Google's precedent and make their own modems without 3G in 2023. That way, they wouldn't need to pay Qualcomm anything.

Beats said:

Marketshare and Mac sales have increased. Financial reports aren’t “PR”. They aren’t even advertised.

Sales have increased. Market share hasn't increased because Wintel and ChromeOS sales have grown almost as fast. Yes, Wintel and ChromeOS sales increases will taper off as workers and students return to offices and classrooms but lots of people will have swapped out their Intel Macs for M1 Macs by then too. Apple played these same games during the iOS vs Android wars era - which are now all but over - with their quarterly "record iPhone and iPad sales with unprecedented numbers of people switching from Android to iOS!" statements. The market share remained 15/85 for the former and 35/65 for the latter with the exception of supercycles like the iPhone 6 and iPhone 12 launches, and even then the share reverted to normal within a couple of quarters after the supercycle ending.

Same deal here: globally Apple was slightly under 7% market share before the M1 and is now slightly over 8%. And the biggest seller is the MacBook Air, whose 8 GPU cores wouldn't be enough for Steam even if one of them wasn't disabled.

saarek said:

The majority of PC Gamers don’t play with the most expensive hardware. A small, but vocal, percentage spend stupid money gaming hardware.

Look at the specs for the average AAA game and the M1 machines will fall within them. Sure, you’ll not be playing with graphic settings set to Ultra, but on any latest AAA game you’d have to spend thousands to do that PC or not.

I agree that Apple chasing ever higher margins over market share is strange. If they went back to a 30% margin and took 10-15% off the RRP of their Macs they’d move a lot more of them now that they have such a strong key selling point.

Sadly Tim Cook is obsessed with beyond greedy margins.

It isn't about "the most expensive hardware" but rather the minimum hardware. To play even average Steam games at 1080p at 30fps you need an Intel Core i5 with Nvidia GTX 1650 (or AMD Ryzen 5 with AMD RX 570 equivalent). A Windows machine with those can be had for $700. The cheapest MacBook - whether Intel or M1 - with the necessary graphics power costs at least twice as much.