According to Bloomberg, Apple has begun preliminary discussions with Intel and is evaluating facilities at Samsung Electronicsas it seeks to diversify production of its key device chips away from TSMC.
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Apple is trying 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, which is expected to produce advanced chips.
The news comes after an internal reorganization that combined Apple's hardware engineering and hardware technology teams into a single organization led by Johny Srouji, who is now the Chief Hardware Officer . As part of the reorganization, the hardware team was reportedly split into five key areas, one of which is Silicon, overseen by 18-year Apple veteran Sri Santhanam.
Bloomberg reports that Apple's main challenges in its efforts to differentiate center on scale and consistency of production, as "Intel and Samsung cannot reliably offer the type of production and scale that has made TSMC the dominant custom chipmaker — and one of Apple's most critical supply chain partners."
For more than a decade, Apple has designed the main processors, known as systems-on-chips, that power its devices and relies on TSMC to build them using the most advanced manufacturing processes in Taiwan. The latest iPhones and Macs use what is known as a 3-nanometer manufacturing node.
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However, Apple, one of the largest buyers of silicon, is not immune to supply chain disruptions. Recent shortages have been caused by the massive expansion of AI data centers and higher-than-expected demand for Macs suitable for running AI models locally. This highlights the need for Apple to consider additional suppliers.
Bloomberg also notes that while these talks began before the recent components crisis caused by the AI boom, the issue has gained greater urgency in recent months, with Apple acknowledging the limited flexibility of its current supply chain during its recent earnings call.
For Intel and Samsung Electronics, both would benefit significantly from attracting Apple as a customer. For Intel, it would be a major affirmation of its still- nascent push to become a manufacturer under CEO Lip-Bu Tan, with the bonus of rekindling a partnership that began in 2006 and lasted until Apple switched to its own Apple Silicon chips. For Samsung Electronics, it would be a significant boost to its position in the advanced chip market, as it still lags behind TSMC despite its more established presence in manufacturing services.
Apple's reliance on TSMC carries additional weight given the broader geopolitical tensions surrounding Taiwan and its relationship with China. Moving even some of that production elsewhere would help diffuse that risk and align with Apple's broader efforts to bring advanced manufacturing back to the U.S. This dynamic could be especially important if the company reaches a deal with Intel, given that the U.S. government now owns a stake in the chipmaker.
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However, Bloomberg reports that talks with Intel and Samsung Electronics remain at an early stage with no orders placed, and that “Apple has concerns about using non-TSMC technology and may ultimately not move forward with another partner.”
