TSMC likely stays Apple’s top chip partner after Intel deal

Taiwan Semiconductor Manufacturing Co., a Taiwan-based contract chipmaker, is likely to remain Apple’s main manufacturing partner after Apple reached a preliminary deal for Intel to make some chips, Taiwanese analysts said.

TSMC still has an edge in advanced packaging, chip yields, and power efficiency, which remain important for Apple’s A-series and M-series processors, said Liu Pei-chen of the Taiwan Institute of Economic Research.

Apple’s reported talks with Intel likely reflect tighter TSMC capacity as AI chip demand from customers such as Nvidia rises, rather than concerns about TSMC’s technology, said Li Fang-kuo, chairman of President Capital Management.

🔗 Source: Focus Taiwan

🧠 Food for thought

Implications, context, and why it matters.

Apple is preparing for a manufacturing squeeze

Tighter capacity at Taiwan Semiconductor Manufacturing Co. (TSMC) marks a measurable supply crunch.
Lead times for TSMC’s 2-nanometer and 3-nanometer chips now run from 52 to 104 weeks because the fabs are fully booked 1.
AI demand is driving the squeeze. AI chips are set to take nearly 60% of TSMC’s 3nm output in 2026, then 86% in 2027, leaving less room for other customers 2.
The pinch goes past chipmaking into packaging. TSMC’s CoWoS (Chip-on-Wafer-on-Substrate) lines are also full, with lead times of 52 to 78 weeks 1.

Intel is drawing interest beyond TSMC

A preliminary deal would give Intel’s chipmaking-for-clients business a needed win after it missed out on making Apple’s A-series chips in the past 3.
It also fits a wider search by large tech companies for options outside TSMC.
Elon Musk’s Terafab, a reported chip project, plans to use Intel’s future 14A process for AI chips. Google is reviewing Intel’s Embedded Multi-die Interconnect Bridge (EMIB), an advanced packaging technology 4.
Nvidia has invested US$5 billion in Intel. That adds to a wider push to spread chip production across more places and cut geopolitical risk from manufacturing centered in Taiwan 3.