Bloomberg reports that Apple has been exploring early talks with Intel and evaluating Samsung Electronics facilities as it looks to diversify production of its core device chips beyond TSMC. Here are the details.
Talks are still in the early stages
According BloombergApple is looking to reduce its dependence on TSMC by exploring alternative manufacturing partners.
That includes initial talks with Intel and visits to a Samsung Electronics plant in Texas that is expected to produce advanced chips.
The news comes immediately after a internal reorganization which combined Apple’s hardware engineering and hardware technologies teams into a single organization led by Johny Srouji, who is now the company’s chief hardware officer.
As part of the reorganization, the hardware team was reportedly divided into five key areas, one of which is Silicon, overseen by Sri Santhanam, an 18-year Apple veteran.
Going back to the report, Bloomberg says Apple’s main challenges in its diversification efforts center on manufacturing scale and consistency, as “Intel and Samsung cannot reliably deliver the type of production and scale that has made TSMC the dominant maker of made-to-order chips and one of the most critical partners in Apple’s supply chain.”
From the report:
For more than a decade, Apple has designed the core processors, known as 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 is known as a 3-nanometer manufacturing node.
But not even Apple, one of the largest buyers of silicon, is immune to supply chain disruptions. The recent shortage has been driven by massive construction of AI data centers and higher-than-anticipated demand for Macs suitable for running AI models locally. That, in part, highlights the need for Apple to consider additional suppliers.
Bloomberg He also notes that while these conversations began before the recent components crisis fueled by the rise of AI, the issue has taken on greater urgency in recent months, with Apple itself acknowledging the limited flexibility of its current supply chain during last week’s meeting. earnings call.
As for Intel and Samsung Electronics, both would benefit significantly if Apple became a customer.
For Intel, it would be an important validation of its still-nascent foundry push under CEO Lip-Bu Tan, with the benefit of rekindling a partnership that began in 2006 and lasted until Apple transitioned to its own Apple Silicon chips.
For Samsung Electronics, it would be a significant boost to its position in the advanced chip market, as even with a more established presence in foundry services, it still lags behind TSMC.
Apple’s dependence on TSMC also carries additional weight given the broader geopolitical tensions surrounding Taiwan and its relationship with China.
Transferring 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 US
That dynamic could be especially relevant if the company reached a deal with Intel, given that the U.S. government now has a shareholding at the chip maker.
That said, Bloomberg says that talks with Intel and Samsung Electronics are still at an early stage with no orders in place, and that “Apple is concerned about using non-TSMC technology and may not ultimately move forward with another partner.”
read BloombergThe full report, follow this link.
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