Title: Apple Strikes Lucrative Deal with TSMC for Cutting-Edge 3 nm Manufacturing Process
In a groundbreaking move that solidifies its dominance in the technology industry, Apple has secured favorable terms with Taiwan Semiconductor (TSMC) for its state-of-the-art 3 nm manufacturing process. Under the deal, TSMC will absorb the cost of defective processor dies as part of the agreement to supply Apple with large chip orders worth billions of dollars.
Typically, chip designers are required to pay for each individual die, even if it turns out to be defective. However, given the sheer magnitude of Apple’s orders, TSMC is willing to forgo charging the tech giant for any unusable dies. This arrangement is poised to generate substantial cost savings for Apple, particularly with the implementation of the new manufacturing process.
Apple’s significance to TSMC’s revenue cannot be understated. In 2022, the tech giant accounted for a staggering 23 percent of TSMC’s $72 billion revenue, cementing itself as TSMC’s largest customer. To further solidify this partnership, Apple has reportedly secured exclusive access to TSMC’s entire 3 nm manufacturing capacity for approximately one year. This preferential treatment has been in place since Apple first began utilizing TSMC’s cutting-edge factories back in 2014.
TSMC, currently renowned for manufacturing high-performance CPUs, GPUs, and SoCs for major chip companies, faces competition from industry rivals such as Samsung and Intel. Noting these competitors’ shipping or imminent plans for the release of their own 3 nm technology, it is crucial for TSMC to continue offering favorable terms to retain Apple’s patronage.
However, the ongoing success of this partnership is not guaranteed. Should TSMC falter in maintaining its favorable terms, Apple holds the potential to pursue other manufacturers to meet its production requirements, potentially jeopardizing TSMC’s position as a primary supplier of chips to the technology behemoth.
As the technology landscape evolves and competition intensifies, Apple’s strategic maneuvering to secure the benefits of TSMC’s 3 nm manufacturing process highlights its commitment to remaining at the forefront of innovation. With the potential for significant cost savings and the reassurance of exclusive access to TSMC’s advanced facilities, Apple’s future product offerings are poised to push the boundaries of technological excellence.
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