Bloomberg reports that Apple has explored preliminary discussions with Intel and evaluated Samsung Electronics facilities as it seeks to diversify production of its core chips beyond TSMC. Here are the details.
Talks are in their early stages
According to BloombergApple is looking to reduce its reliance on TSMC by exploring alternative manufacturing partners.
This includes preliminary discussions with Intel and visits to a Samsung Electronics factory in Texas that is expected to produce advanced chips.
The news follows an internal reorganization that consolidated Apple’s hardware engineering and hardware technology teams under a single organization led by Johny Srouji, who is now the company’s chief hardware officer.
As part of the reorganization, the hardware team would have been split into five key areas, including silicon, overseen by 18-year Apple veteran Sri Santhanam.
Back to the report, Bloomberg says Apple’s main challenges in its diversification efforts focus on scale and consistency of manufacturing, as “Intel and Samsung cannot reliably offer the type of production and scale that have made TSMC the dominant made-to-order chip maker – and one of Apple’s most critical supply chain partners.” »
Extract from the report:
For more than a decade, Apple has designed the core processors, called systems-on-a-chip, that power its devices and relied on TSMC to build them using Taiwan’s most advanced production processes. The latest iPhones and Macs use what’s called the 3-nanometer fabrication node.
But even Apple, one of the biggest buyers of silicon, is not immune to supply chain disruptions. Recent shortages are driven by massive construction of AI data centers and higher-than-expected demand for Macs suitable for running AI models locally. This in part highlights the need for Apple to consider additional suppliers.
Bloomberg also notes that while these discussions began before the recent component crisis driven by the AI boom, the issue has become more urgent in recent months, with Apple itself acknowledging the limited flexibility of its current supply chain during last week’s earnings call.
As for Intel and Samsung Electronics, both would benefit greatly from Apple’s arrival as a customer.
For Intel, it would be a major validation of its still-nascent foundry efforts under CEO Lip-Bu Tan, with the added bonus of reviving a partnership that began in 2006 and lasted until Apple moved to its own Apple Silicon chips.
For Samsung Electronics, this would be a significant strengthening of its position in the advanced chip market, as even with a more established presence in foundry services, it still lags behind TSMC.
Apple’s reliance on TSMC also carries added weight given the broader geopolitical tensions surrounding Taiwan and its relationship with China.
Moving even some of that production elsewhere would not only help spread that risk, but also align with Apple’s broader efforts to bring advanced manufacturing back to the United States.
This dynamic could be particularly relevant if the company strikes a deal with Intel, given that the U.S. government now owns a stake in the chipmaker.
That said, Bloomberg indicates that discussions with Intel and Samsung Electronics are still in the early stages, with no orders pending, and that “Apple has concerns about using non-TSMC technologies and may not move forward with another partner.”
To read BloombergThe full report, follow this link.
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