[anoojb]

So let's say TMSC reciprocated Apple's consistency as a customer by giving them preferential treatment for capacity. It's good business after all.

However, everyone knows that good faith reciprocity at that scale is not rewarded. Apple is ruthless. There are probably thousands of untold stories of how hard Apple has hammered it's suppliers over the years.

While Apple has good consumer brand loyalty, they arguably treat their suppliers relatively poorly compared to the Gold standard like Costco.

[Aurornis]

At this scale and volume, it's not really about good faith.

Changing fabs is non-trivial. If they pushed Apple to a point where they had to find an alternative (which is another story) and Apple did switch, they would have to work extra hard to get them back in the future. Apple wouldn't want to invest twice in changing back and forth.

On the other hand, TSMC knows that changing fabs is not really an option and Apple doesn't want to do it anyway, so they have leverage to squeeze.

At this level, everyone knows it's just business and it comes down to optimizing long-term risk/reward for each party.

[philistine]

Apple has used both Samsung and TSMC for its chips in the past. Until the A7 it was Samsung, A8 was TSMC, and the A9 was dual-sourced by both! Apple is used to switching between suppliers fairly often for a tech company; it's not that it's too hard for them to switch fab, it's that TSMC is the only competitive fab right now.

There are rumours that Intel might have won some business from them in 2 years. I could totally see Apple turning to Intel for the Mac chips, since they're much lower volume. I know it sounds crazy, we just got rid of Intel, but I'm talking using Intel as a fab, not going back to x86. Those are done.

[lukan]

But wasn't the reason they split with Samsung because they copied the iphone in the perspective of Jobs (to which he reacted with thermonuclear threats)?

They did had the expertise building it after all. What would happen, if TSMC now would build a M1 clone? I doubt this is a way anyone wants to go, but it seems a implied threat to me that is calculated in.

[thewebguyd]

Job's thermonuclear threats were about Android & Google, not Samsung because Schmidt was on Apple's board during the development of Android.

> "I will spend my last dying breath if I need to, and I will spend every penny of Apple’s $40 billion in the bank, to right this wrong. I’m going to destroy Android, because it’s a stolen product. I’m willing to go thermonuclear war on this."

The falling out with Samsung was related, but more about the physical look of the phone

[wtetzner]

> because it’s a stolen product

This is funny coming from Jobs.

[asciii]

> good artists copy great artists steal - pablo picasso

- steve jobs

[scyzoryk_xyz]

Oh shit I didn't know he was on the board, I thought the story was just that they decided to be a competitor.

So, Schmidt had inside knowledge of before following Apple into the smartphone category? That makes the vengeful fury less unhinged.

Sounds like those $40b did not end up running out.

[thewebguyd]

> So, Schmidt had inside knowledge of before following Apple into the smartphone category?

That's the theory/assumption. Android started as an OS for blackberry-style phones with physical keyboard, non touch screens.

Almost as soon as the iPhone launch, Schmidt left the board, and Android pivoted to a multi-touch interface almost immediately, and a year later the HTC Dream came out.

I don't think anyone has any real proof of wrongdoing but the timing is certainly suspicious

[mr_toad]

If Samsung (or any other fab) were to make Apple chips they wouldn’t learn anything that a good microscope couldn’t already tell them.

Samsung still makes the displays and the cameras for most iPhones. They continued to do business even while engaged in legal action. That they are still competitors wont stop them doing business when it suits them. Business doesn’t care about pride or loyalty; only money.

[lukan]

I believe just locking at a chip, does not enable you to to make such a chip, otherwise china would not be behind.

TSMC already makes them in their labs. They could tweak a few things, claim it is novel and just sell to the competition. (Apple would fight back of course with all they have and TSMC reputation would take damage)

[bluGill]

Looking at a chip makes it easier, but it is still millions (or billions in the case of a CPU) of dollars for engineers to figure it all out. That doesn't get you to understand what was done or why so 2-3 years latter you can make that chip but they have now moved on to a faster/better version and you are behind. And of course if you try this Apple (or whoever you copy) will have plenty of engineers who can look at your chip and in just a few hours decide there is enough to have lawyers sue you for the copy.

China already has plenty of engineers who can make a chip, and experience with making CPUs. ARM licenses a lot of useful things for making a CPU (I don't know what). They would be better off in the long run making the chips they all ready understand better. Which is something they are doing. It takes longer and costs more, but because they understand they can also customize the next chip for something they think is good - if they are right they can be ahead of everyone else.

What China is lacking is the fabs to make a CPU. They have made good progress in building them, but there is a lot of technology that isn't in the chip that is needed to make a chip.

[fragmede]

Doesn't seem likely, TBH. Nevermind the legal agreements they would be violating, TSMC fabs Qualcomm's Snapdragon line of ARM processors. The M1 is good, but not that good (it's a couple generations old by this point, for one). Samsung had a phone line of their own to put it in as well. TSMC does not.

[DeathArrow]

>They did had the expertise building it after all. What would happen, if TSMC now would build a M1 clone

What do you mean by cloning? An exact copy of Apple SOC? What would that be useful for?

There are already other ARM SOCs that are as performant as Apple's, according to benchmarks.

[chippiewill]

I thought Intel was too far behind on their process nodes?

[wtallis]

At the end of the month, laptops with Intel's latest processors will start shipping. These use Intel's 18A process for the CPU chiplet. That makes Intel the first fab to ship a process using backside power delivery. There's no third party testing yet to verify if Intel is still far behind TSMC when power, performance and die size are all considered, but Intel is definitely making progress, and their execs have been promising more for the future, such as their 14A process.

[philistine]

I did say in two years. Intel can still fail the validation along the way.

[MangoCoffee]

>Apple has used both Samsung and TSMC for its chips in the past. Until the A7 it was Samsung, A8 was TSMC, and the A9 was dual-sourced by both! Apple is used to switching between suppliers fairly often for a tech company; it's not that it's too hard for them to switch fab, it's that TSMC is the only competitive fab right now.

This is false. Samsung competes with Apple on smartphones. Apple even filed a lawsuit against Samsung over smartphones.

Apple moved to TSMC because how can you trust someone to make chips for you containing your phone's core IP?

>I could totally see Apple turning to Intel for the Mac chips

I could totally see Apple will be wary turning their core IPs to Intel

[nandomrumber]

Which but is false? Samsung definitely did manufacture Apple chips.

Common manufacturer Samsung[2]

https://en.wikipedia.org/wiki/TSMC

Apple A6 which is fabricated with Samsung 32 nm HKMG (Hi dielectric K, Metal Gate) CMOS process

https://www.ifixit.com/Teardown/Apple+A6+Teardown/10528

[CGMthrowaway]

TSMC holds the real power. Apple’s stability and Nvidia’s cash both matter but AI demand is distorting the entire semiconductor ecosystem. There are no easy exits. Building fabs, switching suppliers or waiting out the cycle all carry massive risk.

In the long run, competition (where via Intel, Samsung or geopolitical diversification) is the only path that benefits anyone other than TSMC

[MangoCoffee]

Trust comes first. That's why TSMC is a pure play fab. Unless there's something that can 100% guarantee protection for fabless players like Apple, no one will trust Samsung or Intel.

Fabless players' IPs are their entire business.

It'll be hard to trust Intel given Intel's past behavior, especially against AMD.

[reverserdev]

Hasn't Apple recently made a deal with Intel?

[kalleboo]

Then why are they switching from Sony to Samsung for custom camera sensors for the next iPhone?

Why do they keep using Samsung for their customized screens despite LG and Chinese competitors being competitive?

[MangoCoffee]

Does Apple spend R&D on iPhone screens like they do Apple Silicon? What's that got to do with what we're talking about regarding iPhone's core IP (Apple's own chip, the most important IP from Apple)?

[saagarjha]

Apple has run micro LED development for several years

[kalleboo]

> Does Apple spend R&D on iPhone screens like they do Apple Silicon

yes

> What's that got to do with what we're talking about regarding iPhone's core IP

The iPhone's core IP is iOS.

Collaboration on display and camera development leak major future milestones. Far more consumers care about cameras and displays than the CPU. Just like the camera and display the CPU IP is also protected by patents.

[npunt]

wait til you find out who supplies iPhone screens.

[MangoCoffee]

Does Apple spend R&D on iPhone screens like they do Apple Silicon? What's that got to do with what we're talking about regarding iPhone's core IP (Apple's own chip, the most important IP from Apple)?

[j16sdiz]

Apple owns a few patients on micro LED display. Those look like R&D to my untrained eye.

https://www.ledinside.com/node/31822

[CodeWriter23]

Apple is the company that just over 10 years ago made a strategic move to remove Intel from their supply chain by purchasing a semiconductor firm and licensing ARM. Managing 'painful' transitions is a core competency of theirs.

[Zafira]

I think you’re correct that they’re good at just ripping the band-aid off, but the details seem off. AFAIK, Apple has always had a license with ARM and a very unique one since they were one of the initial investors when it was spun out from Acorn. In fact, my understanding is that Apple is the one that insisted they call themselves Advanced RISC Machines Ltd. because they did not want Acorn (a competitor) in the name of a company they were investing in.

[steve1977]

Correct, from the ARM Wikipedia entry:

The new Apple–ARM work would eventually evolve into the ARM6, first released in early 1992. Apple used the ARM6-based ARM610 as the basis for their Apple Newton PDA.

[wtallis]

Which acquisition are you referring to? Apple bought PA Semi in 2008 and Intrinsity in 2010.

[CodeWriter23]

PA, Intrinsity wasn't front of mind for me. My point is, Apple has proven they can buy their way into vertical integration, let's look at the history.

68K -> PowerPC, practically seamless

Mac OS 9 -> BSD / OS X with excellent backward compatibility

PowerPC -> x86

x86 -> ARM

Each major transition, biting off orders of magnitude more complexity of integration. Looking at this continuum, the next logical vertical integration step for Apple is fabrication. The only question in my mind, does Tim have the guts to take that risk.

[deeringc]

Doesn't Apple have an ARM "Architectural License" arising from being one of the original founding firms behind ARM, which they helped create back in the 90s for the Apple Newton. That license allows them to design their own ARM-compatible chips. The companies they bought more recently gave them the talent to use their existing license, but they always had the right to design their own chips.

[MBCook]

Not all of Apple‘s chips need to be fabbed at the smallest size, those could certainly go elsewhere. I’m sure they already do.

Is there anyone who can match TSMC at this point for the top of the line M or A chips? Even if Intel was ready and Apple wanted to would they be able to supply even 10% of what Apple needs for the yearly iPhone supply?

[throwaway2037]

    > Not all of Apple‘s chips need to be fabbed at the smallest size, those could certainly go elsewhere.

When I saw that TSMC continues to run old fabs, I immediately thought about this idea. I am sure when Apple is designing various chips for their products, they design for a specific node based on available capacity. Not all chips need to be the smallest node size.

Another thing: I am seeing a bunch of comments here alluding to Apple changing fabs. While I am not an expert, it is surely much harder than people understand. The precise process of how transistors are made is different in each fab. I highly doubt it is trivial to change fabs.

[MBCook]

My understanding, and I’m a layman, is it basically requires making new masks. And that’s not trivial.

I guess you’d be doing that anyway with a brand new chip. But still probably easier to work with the tools/fab you know well.

I suppose you’d have to do it just switching nodes at TSMC. Which is why the A13 (or whatever) probably never moves to smaller nodes.

Sometimes Apple updates the chip in a product that doesn’t seem to need it, like the AppleTV. I wonder if it’s because the old node is going away and it’s easier to just use a newer chip that was designed for the newer node.

[_heimdall]

Apple knows first hand how difficult and expensive it is to fire your CEO, I mean chip fab, only to rehire them when its clear that decision didn't pan out.

[7speter]

I would imagine they could split their orders between different fabricators; they can put in orders for the most cutting edge chips for the latest Macs and iPhones at TSMC and go elsewhere for less cutting edge chips?

[fsckboy]

presumably they already do that (since non cutting edge chip fab is likely to be more competitive and less expensive) so, given they are already doing that, this problem refers to the cutting edge allocations which are getting scare as exemplified at least by Nvidia's growth

[ksec]

I think this misses a key point. TSMC is leading edge. When Apple switched they were leading edge for pure play, but not far ahead of Samsung and certainly behind Intel. Now not only TSMC is the best, it is also the largest. Which means Apple don't have a choice.

It the old days the leverage was that without Apple, no one is willing to pay for leading edge foundry development, at least not enough money to make it so compared to Apple. Now it is different. The demands for AI meant plenty of money to go around. And Nvidia is the one to beat, not Apple any more. The good thing for Apple is that as long as Nvidia continues to grow, their order can be spilt between them. No more relying on single vendor to pus.

[jongjong]

It's ridiculous that a trillion dollar company feels beholden to a supplier. With that kind of money, it should be trivial to switch. People forget Nvidia didn't even exist 35 years ago. It would probably take like 3 to 5 years to catch up with the benefit of hindsight and existing talent and tools?

And anyway consumers don't really need beefy devices nowadays. Running local LLM on a smartphone is a terrible idea due to battery life and no graphics card; AI is going to be running on servers for quite some time if not forever.

It's almost as if there is a constant war to suppress engineer wages... That's the only variable being affected here which could benefit from increased competition.

If tech sector is so anti-competitive, the government should just seize it and nationalize it. It's not capitalism when these megacorps put all this superficial pressure but end up making deals all the time. We need more competition, no deals! If they don't have competition, might as well have communism.

[9cb14c1ec0]

There is a big waiting list for fab tools. You can't just spin that up out of nowhere. Modern chip fabs are the most complex things ever created, and till you spun up your own fab, supply and demand will have balanced out.

Also, how is nationalizing something pro-competition? Nationalized companies have a history of using their government connections to squash competition.

[cgio]

It can be interpreted a different way too. Apple is just a channel for TSMCs technology. Also the cost to build a fab that advanced, in say a 3 year horizon, let alone immediately available, is not one even Apple can commit to without cannibalising its core business.

[weslleyskah]

I know you are maybe joking but I don't think the government nationalizing the tech sector would be a good idea. They can pull down the salaries even more if they want. It can become a dead end job with you stuck on archaic technology from older systems.

Government jobs should only be an option if there are enough social benefits.

[jongjong]

I'm joking yes but as an engineer who has seen the bureaucracy in most big tech companies, the joke is getting less funny over time.

I've met many software engineers who call themselves communists. I can kind of understand. This kind of communist-like bureaucracy doesn't work well in a capitalist environment.

It's painful to work in tech. It's like our hands are tied and are forced to do things in a way we know is inefficient. Companies use 'security' as an excuse to restrict options (tools and platforms), treat engineers as replaceable cogs as an alternative to trusting them to do their job properly... And the companies harvest what they sow. They get reliable cogs, well versed in compliance and groupthink and also coincidentally full-blown communists; they're the only engineers remaining who actually enjoy the insane bureaucracy and the social climbing opportunities it represents given the lack of talent.

[weslleyskah]

I understand completely.

I'm going through a computer engineering degree at the moment, but I am thinking about pursuing Law later on.

Looking at other paths: Medicine requires expensive schooling and isn't really an option after a certain age and law, on the other hand, opened its doors too widely and now has a large underclass of people with third-tier law degrees.

Perhaps you can try to accept the realities of the system while trying to live the best life that you can?

Psyching yourself all the way, trying to find some sort of escape towards a good life with freedom later on...

[irishcoffee]

Maybe consider patent law? I have a friend who worked for the patent office, and the patent office paid for their law school. Now they’re a patent attorney and doing quite well.

[knowitnone3]

Sounds like you should just leave the company if you are that unhappy

[lovich]

Bruh, with some very rare exceptions like valve, every company is run as a dictatorship or oligarchy. That goes beyond tech, hell big tech at least gives some agency to their engineers.

The only way you don’t need to be versed in compliance or group think at a US firm as an employee is to either be

1) independently wealthy, so your job is a hobby you can walk away from

2) have some leverage on a currently in demand skill, but the second that leverage evaporates they will demand the compliance

Also I realized I undersold it, they aren’t just run as dictatorships/oligarchies, they are usually run as command economies as well.

The whole capitalist competition style behavior only happens with inter firm interactions, not internal ones

[marcus_holmes]

Find a small company with a founder who loves their team and wants them to be happy. They exist, I assure you. They're not even rare.

I spent most of my career working in companies with <50 employees, and only hit a couple of unpleasant founders. The few large companies that I worked in were always bureaucratic nightmares by comparison.

Small companies won't pay FAANG salaries, but they also won't make you feel like a meaningless cog in a vast unsympathetic, unproductive, machine.

[delaminator]

> It would probably take like 3 to 5 years to catch up with the benefit of hindsight and existing talent and tools?

Are you talking about TSMC - because that is a single, albiet primary, node in a supply chain, that's also what you have to replicate. AMSL is another vital node.

So many people with "it's just a factory, how hard can it be". The answer is "VERY", as a few endavours have found out already - and they will probably find out even at TSMC Arizona.

I shall illustrate with Adrian Thompson's 1996 FPGA experiment at the University of Sussex.

Thompson used a genetic algorithm to evolve a circuit on an FPGA. The task was simple: get it to distinguish between a 1kHz tone and a 10kHz tone using only 100 logic gates and no system clock.

After about 4,000 generations of evolution, the chip could reliably do it but the final program did not work reliably when it was loaded onto other FPGAs of the same type.

When Thompson looked inside at what evolved, he found something baffling:

The plucky chip was utilizing only thirty-seven of its one hundred logic gates, and most of them were arranged in a curious collection of feedback loops. Five individual logic cells were functionally disconnected from the rest - with no pathways that would allow them to influence the output - yet when he disabled any one of them the chip lost its ability to discriminate the tones.

Welcome to building semi-conductors.

https://www.damninteresting.com/on-the-origin-of-circuits/

[joncrocks]

Do you mean AMSL?

There was a great video recently on the company + techniques used for cutting-edge lithography.

https://www.youtube.com/watch?v=MiUHjLxm3V0

[delaminator]

ha, yes I did. - luckily still in the edit window

I was expecting an Asianometry video from your link

https://www.youtube.com/@Asianometry

Pure Silicon Crystals for the wafer is another very specialist supplier you can't just decide to become - your local gravity will probably have an effect you need to tune into

[MangoCoffee]

>If tech sector is so anti-competitive, the government should just seize it and nationalize it.

Trump is using his DOJ to probe Jerome Powell with a bogus lawsuit because the Fed won't lower rates on demand.

An independent Fed is the most important body for the USA. Lowering rates should be based on facts, not dictated by some bankrupt casino CEO. And now you want our government to nationalize the tech sector?

[jquery]

I don't support nationalizing the tech sector, but I believe the reason we have Trump in the first place is because our government refused to nationalize health care.

[NoMoreNicksLeft]

>On the other hand, TSMC knows that changing fabs is not really an option and Apple doesn't want to do it anyway, so they have leverage to squeeze.

They're Apple. If TSMC fucks around too much, they might just start working towards building their own fab.

[hinkley]

Apple loaned TSMC money in order to build manufacturing capacity back around the M1 era. They’ve done that for a number of suppliers and the “interest payments” were priority access to capacity. Everyone was complaining about how Apple got ARM chips while others had to wait in line.

That said, they did that for a sapphire glass supplier for the Apple Watch and when their machines had QC problems they dropped them like a rock and went back to Corning.

But is that really any different from any other supplier? And who tf do you think they’re going to drop TSMC for right now? They are the cock of the walk.

[bigyabai]

> And who tf do you think they’re going to drop TSMC for right now?

Don't look now: https://www.macrumors.com/2025/11/28/intel-rumored-to-supply...

[MangoCoffee]

If Apple cares about their chip IPs, it will be very hard to trust Intel given Intel's past behavior with others like AMD.

[bigyabai]

If Apple cares about their Softbank investment, the best possible outcome is that Intel copies their IP wholesale. Arm's white whale is Intel buying an architectural license, which they have zero incentive to do unless someone gives them an off-the-shelf core design that doesn't suck.

The modern Cortex and Infiniverse designs are so pathetic that RISC-V might mature by the time ARM is the industry standard. And the smaller ARM IP hasn't been profitable since China mass-produced the clones. Courting Intel into buying an architectural license with a free IP bonus is a legitimately smart move for ARM's longevity, from Apple's POV.

[DeathArrow]

According to benchmarks latest ARM Cortex designs and Qualcomm Snapdragon designs are as performant as Apple's.

[sellmesoap]

About 17 years ago I worked at a company that was clamoring to get products into Costco, when we did I was shocked at the fees they charged us for returns. If they're the gold standard for supplier relations it's a wonder anyone bothers being a supplier.

[TurdF3rguson]

You were shocked that they didn't absorb the cost of your shipping mistakes?

[HarHarVeryFunny]

Why would you assume that Costco returns are due to supplier mistakes?

Costco are legendarily permissive with returns, to extent of things like accepting bare stick-like xmas trees back after xmas, and giving a full refund, but ultimately this is to their advantage in encouraging mindless consumerism (which is also the general American model - no-question-no-fault returns are generally an American thing, not a worldwide one).

Now, a liberal return policy may work out for Costco, and Costco is obviously a high volume hence desirable customer for a supplier, but if Costco is pushing much of the cost of returns back to the supplier, that does change the picture a bit!

[TurdF3rguson]

Those returned trees don't get sent back to the supplier, they get deducted from a pre-negotiated spoil allowance which is something separate. The supplier returns will be things like badly stacked palettes.

[boringg]

Counter argument is that is NVIDIA friendly to their supply chain? I have to think that maybe they are with their massive margins because they can be - their end buyer is currently willing to absorb costs at no expense. But I don't know, and that will change as their business changes.

Your underlying statement implies that whoever is replacing apple is a better buyer which I don't think is necessarily true.

[philistine]

Nvidia is famously a pain to work with. Apple vowed never to use their chips, Microsoft and Sony can't get them to make any GPU for their consoles.

The only complete package integrator that manages to make a relationship work with Nvidia is Nintendo.

[7speter]

> The only complete package integrator that manages to make a relationship work with Nvidia is Nintendo.

And thats probably because Nintendo isn’t adding any pressure to neither TSMC nor Nvidia capacity wise; iirc Nintendo uses something like Maxwell or Pascal on really mature processes for Switch chips/socs.

[Macha]

And also the Switch 1 was just the hardware for a nvidia shield tablet from nVidia’s perspective, without the downside of managing the customer facing side and with the greater volume from Nintendo’s market reach. (Not that it wasn’t more than that for consumers or Nintendo, just talking nvidia here)

[thfuran]

EVGA outright gave up on selling GPUs rather than continue working with NVidia.

[mr_toad]

> Apple vowed never to use their chips

I thought that was mainly due to bad thermals. I always got the impression that (like Intel) Nvidia only cared about performance, and damn the power consumption.

[windowsrookie]

Nvidia sold defective GPU's that affected every 2007-2008 MacBook Pro. It was a manufacturing defect and every chip was guaranteed to fail. It was a bad look for Apple that cost them millions having to replace logic boards. The defect wasn't corrected for several years leading to some people having multiple logic board replacements.

https://blog.greggant.com/posts/2021/10/13/apple-vs-nvidia-w...

[BearOso]

They, and everyone at the time, were kind of forced to switch to lead-free solder by RoHS. At that point, there probably hadn't yet been tests showing the results of constant thermal cycling, so the brittling effect was unknown. Apple was particularly affected as an early adopter because of their PR stance on environmental issues.

Refusing to acknowledge anything was wrong was the real problem. But that's just a reminder that companies don't care about you. Brand loyalty is a quagmire.

[philistine]

Nvidia refused to honour a gentleman's agreement that they were on the hook for recall issues with their GPUs. Steve Jobs didn't like that. One bit.

[randall]

I think that works out tremendously well for Nintendo, especially when you look at the Wii-U vs the Switch.

I shot a video at CNET in probably 2011 which was a single touchscreen display (i think it was the APX 2500 prototype iirc?) and it has the precise dimensions to the switch 1.

Nintendo was reluctantly a hardware company... they're a game company who can make hardware, but they know they're best when they own the stack.

[Y-bar]

> EVGA Terminates Relationship With Nvidia, Leaves GPU Business

> According to Han, Nvidia has been difficult to work with for some time now. Like all other GPU board partners, EVGA is only told the price of new products when they're revealed to everyone on stage, making planning difficult when launches occur soon after. Nvidia also has tight control over the pricing of GPUs, limiting what partners can do to differentiate themselves in a competitive market.

https://www.gamespot.com/articles/evga-terminates-relationsh...

[boringg]

So not favorable to apple as a buyer.

[Y-bar]

Funnily enough Apple and Nvidia has old beef with one another, this especially led them to sever ties:

https://www.semiaccurate.com/2010/07/11/investigation-confir...

[marcosdumay]

If your customers are known to be antagonistic to business partners, the correct answer is to diversify them as much as you can, even at reasonable costs from anything else.

That means deprioritizing your largest customer.

[boringg]

Fair I feel like that also speaks to nation+states trade policy.

Also theres the devil you know and the devil you dont know.

[simonh]

Yep, you can be close allies with a nation and have many shared interests, and even a trade deficit with them as we in Britain did, and then they stab you in the back with tariffs.

[tonyedgecombe]

At these scales everyone is antagonistic, it comes with the territory.

[marcosdumay]

That's what MBA schools teach you.

That's also a lie, it's only antagonistic when one of the sides is controlled by a psychopathic asshole, and it being antagonistic is a serious drag for the gains of both sides.

[tonyedgecombe]

What company at these scales isn’t run by a psychopathic asshole? It also comes with the territory.

[leoc]

Even if Apple isn't very good at reciprocating faithful service from its suppliers, there's also the matter of how it treats suppliers who cause it problems instead.

[internet2000]

Costco does not treat their suppliers well.

[mmargenot]

Do you have a source for this? Most information I’ve seen around this (e.g. Acquired podcast, from the Costco side) claims strong positive relationships.

[bethekidyouwant]

Agreed TSMC can do whatever they want. in 2027 no other fabs will match what tsmc has today, anything that requires the latest process node is going to get more expensive, so your apple silicone and your AMD chips

[high_na_euv]

As of today Intel is very around leading node

[girvo]

I'll believe it when I see it (at scale). I hope 18A is good enough as competition is good, and a weak Intel is bad for us all.

[high_na_euv]

PTL is already released, on shelves in like 2 weeks.

[girvo]

Yes and it’s looking promising, but one mobile processor does not prove a nodes success at scale.

It definitely implies it though, I’m hopeful that competition is back.

[bethekidyouwant]

Damn, you would think it would be priced in…

[high_na_euv]

It is slowly being priced

[MangoCoffee]

yield is more important than leading node.

[thiago_fm]

Yes and no. Sunk cost.

They are always balls deep, if it takes them 2 years to get a TSMC yield, with as much as demand it exists for high-end fabs, they could already easily get financing to already build even more capacity.

Now they have literally the US government as an investor.

One would be naive to believe that they wouldn't get at least a few hundred billion dollars to scale it up given the so many risks involved in most of US tech sector being dependent on Taiwan.

[high_na_euv]

Both are important

[VerifiedReports]

They also back-stab their business "partners."

[boplicity]

Suppliers really hate working with Costco. They're slow to pay, allow for only small margins, and often need too high of a percentage of a businesses revenue, all of which is not friendly towards suppliers.

[gamblor956]

Not true at all. Costco uses the industry-standard Net 60 for supplier payment.

Companies have to be fairly large to be Costco suppliers. What suppliers lose in margin they more than make up for in scale. It's better to sell 10 million at 5% margin than 1 million at 10% margin.

And they don't require a % of supplier's business revenue as that would be illegal in the U.S. Most of the products found at Costco are generally found at other retailers, just in smaller packages or as different SKUs.

[dheera]

No public company will be loyal or nice to their suppliers. That is just not in the playbook for public companies. They have "fiduciary duty", not human duty.

Private companies can be nice to their suppliers. Owners can choose to stay loyal to suppliers they went to high school with, even if it isn't the most cost-efficient.

[Forgeties79]

> they arguably treat their suppliers relatively poorly compared to the Gold standard like Costco.

I’m not saying you’re wrong but you’re previous paragraph sounding like you were wondering if it was the case vs. here you’re saying it’s known. Is this all true? Do they have a reputation for hammering their suppliers?

[xp84]

Apple is so notoriously ravenous for profit margin that they can’t not be that way.

[Forgeties79]

It felt like a more confident statement and I was legitimately asking. I have little love for Apple. Ditched my Mac Studio earlier this year for a Linux only build after 20 years of being on Macs. I say this because I think folks think I am trying to sealion/“just ask questions:tm:” or some nonsense, when I am legitimately asking if this is a documented practice and what the extent is. I am not finding it easy to find info on this.

[xp84]

Totally fair question. Being fully transparent, I'm exclusively extrapolating based solely on their publicly-known behavior (e.g. the way they deal with their developers on the App Store), but am not a primary source on their hardware component vendor relationships myself.

[dwaite]

I imagine it is like becoming a supplier for McDonalds.

The penalties for not delivering on timelines and production goals, and the scale being requested can mean substantial changes to your business. I remember a friend whose company was in talks with Apple telling me that there was some sense of relief when the deal fell through, just because of how much stress and risk and change the deal would entail.

However, a missing component could put tens of billions of dollars of revenue on the line for Apple. It is easier to say that any supplier Apple picks has to then quickly grow to the scale and process needed - and failing to do that successfully could very well be a fatal slip for the supplier.

Even in the iPod days, Apple often would invest in building out the additional capacity (factories) to meet their projected demand, and have a period of exclusivity as well. This meant that as MP3 player demand scaled up, they also wound up locking up production for the micro HDD and flash ram that competitors would need.

[bigyabai]

Apple dealt exclusively with Chinese labor prices until they were directly threatened by the POTUS. You tell me.

[yurishimo]

I got a bridge to sell you if you think that Apple is going to bring any of their manufacturing to the US...

[bigyabai]

I've seen the leaked BOMs, I'm not dumb enough to think that Americans can match it.

[savorypiano]

Where do you find the leaked BOMs?

[bigyabai]

RedNote usually, before it's deleted.

[WillPostForFood]

https://www.bbc.com/news/articles/c86jx18y9e2o

Apple has responded and has started moving a lot of manufacturing out of China. It just makes sense for risk management.

[Forgeties79]

From your article:

> Meanwhile, Vietnam will be the chief manufacturing hub "for almost all iPad, Mac, Apple Watch and AirPods product sold in the US".

> We do expect the majority of iPhones sold in US will have India as their country of origin," Mr Cook said.

Still not made in the US and no plan to change that. They will be selling products made in India/Vietnam domestically and products made in China internationally.

The tariffs are not bringing these jobs home.

[mullingitover]

Well, from your article:

> China will remain the country of origin for the vast majority of total products sold outside the US, he added.

And international sales are a solid majority of Apple's revenue.

[godzillabrennus]

It would be a $6000 phone if they built it in America.

[makapuf]

Would be Interesting to know if it really would or not. Especially relative to their margins.

[bluGill]

That depends on too many factors. Moving all production to the US would greatly reduce prices, since it costs a lot of money to setup a factory, but you amortize that over everything it produces. I don't know how the iphone is produced in China, but I have to believe it is highly automated as well. However moving a factory takes months (at best, China may not allow exporting it at all), and in those months Apply wouldn't be making any iphones, so to do production in the US requires building an all new factory which is going to be expensive.

You can buy modern CPUs made in Iowa - at about $60,000 each. You can buy one from an intel fab (I'm not sure where they are) for under $1000 that is likely better. the Iowa made CPU would be a one-off made under license from Intel. The companies that do this made just enough to prove they can in case Intel fabs are bombed. (I assume this means that you can't actually buy such a CPU if you tried, but they do make them and that is about the cost they would have to charge to break even)