ConnexionReport: Rise of AI Is Corroding Apple's Influence Over TSMC
A detailed new report from SemiAnalysis argues that while Apple's partnership with TSMC created the modern leading-edge foundry model, the rapid rise of AI computing is changing who pays for new chip technologies and how much influence Apple holds over each new manufacturing node.
The report traces how Apple became the single most important customer in the global semiconductor industry by committing early and at scale to new manufacturing processes at TSMC, beginning with the A8 chip in 2014. It argues that Apple's willingness to absorb early costs, fund yield improvements, and align its annual product cycle with TSMC's roadmap allowed the foundry to outpace rivals and cement its dominance at the leading edge.
Apple's annual spending at TSMC grew from roughly $2 billion in 2014 to about $24 billion in 2025, while Apple's share of TSMC revenue rose from single digits to as much as 25% at its peak. For much of the past decade, Apple accounted for more than half of initial production at each new node, and in some cases nearly all of it, effectively underwriting the financing of advanced manufacturing when no other customer could do so at scale.
However, the rise of AI accelerators has created a second class of customers, such as NVIDIA, who are capable of consuming large amounts of advanced manufacturing capacity. TSMC's revenue mix has shifted significantly as a result.
Smartphones once represented nearly half of TSMC's revenue, but that share has fallen as high-performance computing demands, including AI, have grown to become the largest segment. This means Apple is no longer the only customer capable of funding new capacity, even though it remains the largest single customer by revenue.
This change is said to already be visible with upcoming manufacturing nodes. Apple's share of early production for TSMC's N2 and A16 nodes is expected to be lower than previous generations, the latter of which is designed for high-performance computing workloads rather than mobile devices.
Under SemiAnalysis's modeling, Apple's position strengthens again at later nodes such as A14, which are being designed from the start to support both mobile and high-performance products. In that scenario, Apple's share of early capacity rises again as its iPhone and Mac chips return to being the primary drivers of volume.
While Apple continues to rely on TSMC for its most advanced chips, SemiAnalysis says the company is exploring alternatives for lower-risk components and certain categories to diversify its supply chain. Intel's upcoming 18A-P process is a potential option for some Apple silicon without disrupting flagship products.
See SemiAnalysis's full report for more information.
This article, "Report: Rise of AI Is Corroding Apple's Influence Over TSMC" first appeared on MacRumors.com
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The report traces how Apple became the single most important customer in the global semiconductor industry by committing early and at scale to new manufacturing processes at TSMC, beginning with the A8 chip in 2014. It argues that Apple's willingness to absorb early costs, fund yield improvements, and align its annual product cycle with TSMC's roadmap allowed the foundry to outpace rivals and cement its dominance at the leading edge.
Apple's annual spending at TSMC grew from roughly $2 billion in 2014 to about $24 billion in 2025, while Apple's share of TSMC revenue rose from single digits to as much as 25% at its peak. For much of the past decade, Apple accounted for more than half of initial production at each new node, and in some cases nearly all of it, effectively underwriting the financing of advanced manufacturing when no other customer could do so at scale.
However, the rise of AI accelerators has created a second class of customers, such as NVIDIA, who are capable of consuming large amounts of advanced manufacturing capacity. TSMC's revenue mix has shifted significantly as a result.
Smartphones once represented nearly half of TSMC's revenue, but that share has fallen as high-performance computing demands, including AI, have grown to become the largest segment. This means Apple is no longer the only customer capable of funding new capacity, even though it remains the largest single customer by revenue.
This change is said to already be visible with upcoming manufacturing nodes. Apple's share of early production for TSMC's N2 and A16 nodes is expected to be lower than previous generations, the latter of which is designed for high-performance computing workloads rather than mobile devices.
Under SemiAnalysis's modeling, Apple's position strengthens again at later nodes such as A14, which are being designed from the start to support both mobile and high-performance products. In that scenario, Apple's share of early capacity rises again as its iPhone and Mac chips return to being the primary drivers of volume.
While Apple continues to rely on TSMC for its most advanced chips, SemiAnalysis says the company is exploring alternatives for lower-risk components and certain categories to diversify its supply chain. Intel's upcoming 18A-P process is a potential option for some Apple silicon without disrupting flagship products.
See SemiAnalysis's full report for more information.
Tag: TSMC
This article, "Report: Rise of AI Is Corroding Apple's Influence Over TSMC" first appeared on MacRumors.com
Discuss this article in our forums
