Apple Talks to Intel, Samsung for US Chip Production

Key Takeaways

• Apple executives have visited Samsung's Taylor, Texas fab and held multiple talks with Intel about chip production
• TSMC capacity constraints from AI infrastructure buildout are forcing Apple to diversify suppliers
• No orders have been placed yet, but Intel's 18A process is reportedly under consideration for future M-series chips

Apple is exploring chip manufacturing partnerships with Intel and Samsung as AI-driven demand has strained its primary supplier, TSMC. According to Bloomberg, Cupertino has held multiple early-stage discussions with Intel and sent key executives to visit a Samsung facility still under development.

The Samsung plant in question is likely the Taylor, Texas fab, which is set to begin risk production this year. No orders have resulted from these talks so far.

Why Apple Is Looking Beyond TSMC

Apple has relied on TSMC for iPhone chips since the A8 processor powered the iPhone 6 in 2014. That decade-long relationship is now under pressure from an unexpected source: the AI boom.

Nvidia CEO Jensen Huang recently claimed his company has overtaken Apple as TSMC's top customer. He also suggested Apple might have to pay more for its chips as AI infrastructure buildout consumes advanced manufacturing capacity.

Apple CEO Tim Cook has acknowledged the supply constraints. The company is "constrained by TSMC's supply of advanced chips," affecting production timelines for its latest products.

“Regardless of what you may feel or think, 60% coming out of anywhere is probably not a strategic position.”

— Tim Cook, Apple CEO, 2022 all-hands meeting

Cook made that statement in 2022. Two years later, the AI-driven chip shortage has proven him right.

Intel and Samsung: Old Partners, New Opportunities

Neither Intel nor Samsung would be a new partner for Apple. Samsung manufactured chips for every iPhone from the original through the iPhone 5S. Intel processors powered Macs and MacBooks from 2006 until Apple silicon replaced them in 2023.

Apple reportedly considered using Intel's 18A process for future M-series chips even before the current supply crunch. Geopolitical tensions around Taiwan have made US-based manufacturing more attractive regardless of capacity constraints.

For Intel, landing Apple as a foundry customer would be a significant win. The company famously fumbled its first chance in 2011 when Apple initially approached it for custom chip manufacturing. Intel declined, and TSMC built a decade-long partnership in its place.

Samsung's foundry business sits at a distant second place behind TSMC. An Apple contract would boost its standing and utilization of the Taylor, Texas facility.

TSMC's Arizona Plant Won't Solve the Problem

TSMC's Arizona fab is ramping up production and is expected to deliver 100 million chips for Apple this year. That sounds like a lot. It isn't.

Apple sells over 200 million iPhones annually, plus tens of millions of iPads, Macs, and other devices. One hundred million chips from Arizona represents a fraction of total demand. The majority of Apple's advanced SoCs will still come from Taiwan.

This math explains why Apple is talking to multiple potential suppliers simultaneously. Even if Intel or Samsung partnerships materialize, they would supplement rather than replace TSMC production.

What Happens Next

The talks remain early-stage with no confirmed orders. Apple's main concerns reportedly center on whether non-TSMC manufacturing can match the quality and yields its products require.

Samsung's Taylor fab and Intel's 18A process are both unproven at scale. Apple would likely start with lower-volume or less critical chips before trusting either company with flagship iPhone processors.

For now, TSMC remains Apple's primary supplier. But these conversations signal that Cupertino is serious about building alternatives before it absolutely needs them.

Frequently Asked Questions

Why is Apple looking for alternatives to TSMC?

AI infrastructure buildout has consumed TSMC's advanced chip capacity. Nvidia has reportedly overtaken Apple as TSMC's largest customer, leaving Apple constrained on chip supply for its latest products.

Has Apple worked with Intel or Samsung before?

Yes. Samsung made chips for the original iPhone through the iPhone 5S. Intel processors powered Macs and MacBooks from 2006 until Apple silicon replaced them in 2023.

Will Apple stop using TSMC chips?

No. Any Intel or Samsung partnership would supplement TSMC production, not replace it. Apple's demand far exceeds what any single US fab can produce.

What is Intel's 18A process?

Intel 18A is Intel's upcoming advanced manufacturing process. Reports suggest Apple has considered using it for future M-series chips in Macs and iPads.

When could Apple start ordering chips from Intel or Samsung?

No timeline has been announced. Talks are described as early-stage, and no orders have been placed. Samsung's Taylor, Texas fab is expected to start risk production later this year.

Source: Latest from Tom's Hardware