The ongoing global semiconductor chip shortage has been making headlines on a near daily basis lately, as not a single mainstream smartphone brand has been left unaffected. The iPhone 13 is currently experiencing some awful order wait times due to supply chain constraints, despite Apple being one of the last companies to feel the hit.
TSMC, the world’s biggest semiconductor manufacturer, and Apple’s biggest primary contracted foundry, has been facing a serious struggle in its transition to smaller process nodes in the midst of massive order fulfillment delays, which have been the reality since the end of last year.
What does this mean for the iPhone 14 in more concrete terms? According to the report, it simply means that we’ll see a much smaller improvement in power and energy efficiency between this year and the next, and we’ll have to wait until until 2023 or later for that.
The upshot of TSMC’s struggles is that the iPhone’s processor will be stuck on the same chip manufacturing process for three consecutive years, including next year, for the first time in its history, according to an analysis by The Information of Apple’s previous chips. That could in turn cause some customers to put off upgrading their devices for another year and give Apple’s competitors a bit more time to catch up.
To put that in numbers, Apple brought TSMC $48.08 billion of revenue in 2020, and given Apple’s year-on-year growth, TSMC will continue to benefit from its symbiotic relationship with the smartphone maker.
Apple has also been getting special treatment in the way of reduced fees from TSMC. While the chip manufacturer has already announced that as of January 2022, it will be charging twenty percent more for its chips, Apple will be hit only with a three-percent chip cost increase. Both Apple and TSMC are feeling the pressure at this point, though, as per the The Information report.
And in the early years of their partnership, Apple asked TSMC to build at least one additional chip factory in the southern Taiwanese city of Kaohsiung due to concerns about earthquake risk, a former Apple chip executive said. Earlier this year, TSMC said it was open to building a plant in the city.
The full The Information report, which can be found here (although it requires a subscription), offers more details into the intricate relationship between Apple and TSMC, which remains mutually positive for both parties.
