Apple Negotiates Chip Manufacturing with Intel and Samsung to Reduce Dependency on TSMC—Diversifying the Supply Chain

Apple Seeks to Break Away from Sole Reliance on TSMC

According to a report by Bloomberg, Apple has begun preliminary negotiations with Intel and Samsung regarding the manufacturing of chips for its key devices. After years of relying on TSMC for the production of System-on-Chip (SoC) units that power iPhones, iPads, and Macs, Apple appears to be making a serious move toward diversifying its supply chain.

Tim Cook Highlights “Lack of Flexibility”

Former Apple CEO Tim Cook recently commented during an earnings call on the reduced flexibility in the company’s supply chain, stating, “The level of flexibility that we usually have in our supply chain has diminished.”

Several factors are driving this shift. First, the growing demand for manufacturing resources for AI-related products has exacerbated the global semiconductor shortage. Moreover, the potential risks associated with geopolitical tensions in Taiwan are a significant concern for Apple. While TSMC has begun producing some of Apple’s chips at its factory in Phoenix, Arizona, and plans to manufacture 100 million SoCs in the U.S. by 2026, this amount is only a fraction of Apple’s needs. For example, Apple shipped 247.4 million iPhones in 2025, meaning the majority of its SoCs are still being produced in Taiwan.

Current State of Negotiations and Challenges

Reports indicate that Apple is in the early stages of discussions with Intel and has also visited Samsung’s chip factory under construction in Texas. However, no orders have been placed as of yet, and talks with both suppliers remain preliminary.

Bloomberg notes that Apple has concerns about using technology from suppliers other than TSMC, and it is possible that the company might ultimately decide not to switch partners. Both Intel and Samsung have historically lagged behind TSMC in the transition to advanced fabrication processes, facing challenges such as heat generation and low manufacturing yields.

Specific Timeline

Apple plans to exclusively use TSMC’s 2nm (N2) process for the A20 and A20 Pro processors in its upcoming iPhone 18 series. Consequently, the first devices featuring chips manufactured by other companies are expected to launch no earlier than 2027.

For Intel, reports suggest that its 14A process technology (equivalent to 1.4nm) is being considered for the non-Pro iPhone models slated for release in 2028. Securing Apple as a client could be a significant turning point for Intel, which has been undergoing a rebuilding phase under CEO Lip-Bu Tan. Furthermore, under the previous Trump administration, the U.S. government approved an $8.9 billion investment in Intel.

Meanwhile, Samsung claims to have completed the development of its 2nm chip, the “Exynos 2600,” which would be its first for mobile devices. However, the company still needs to validate its yield rates and performance advantages in mass production.

Future Outlook

Apple’s move to diversify its supply chain stems from structural challenges such as geopolitical risks, strain on production capacity from AI demand, and the reduced flexibility resulting from over-reliance on a single supplier. The success of Apple’s strategic pivot will likely depend on whether Intel and Samsung can bring their manufacturing technologies up to par with TSMC’s.

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FAQ

Q: When might Apple start outsourcing chip production to manufacturers other than TSMC?
A: Apple plans to use TSMC’s 2nm process exclusively for the A20/A20 Pro chips in the iPhone 18, so chips made by Intel or Samsung are expected to appear in Apple products no earlier than 2027. Reports suggest Intel’s 14A process may be used for non-Pro iPhones in 2028.

Q: Why does Apple want to reduce its dependence on TSMC?
A: There are three main reasons: (1) geopolitical risks related to Taiwan, (2) semiconductor shortages due to high demand for AI-related products, and (3) reduced flexibility in the supply chain caused by over-reliance on a single supplier. Former CEO Tim Cook has publicly acknowledged these challenges.

Q: Can Intel and Samsung catch up to TSMC’s capabilities?
A: Currently, both companies lag behind TSMC, struggling with issues such as heat generation and low yields in advanced manufacturing processes. While Samsung claims to have completed development of a 2nm chip, its performance and mass production capabilities remain unproven. Apple has also expressed concerns about the reliability of non-TSMC technologies.