Apple will gain increasingly needed diversification.
US supply chain gets a boost.
Should be fine for TSMC in the short to medium term. Apple not going to risk actual mainline iPhone SoC on Intel any time soon, so lion share of TSMC Apple revenue will be fine.
It's not really realistic to make Mac, Watch, iPad chips on TSMC's best nodes in the next 3-4 years - assuming there is no collapse in AI. Unfortunately, this might mean we will get inferior Intel chips for our Macs. Intel nodes, as it stands, are far more power hungry, less dense, and lower yielding. Intel's own Panther Lake CPU tile is on 18A and it's extremely disappointing in terms of perf/watt and raw perf.
I still expect iPhone chips to be made on the best TSMC nodes though. I'm assuming Apple will design every future core for both TSMC and Intel, sort of like how they dual sourced with TSMC and Samsung in the past for the same generation.
I don’t think Nvidia even has an N2 chip announced, could be wrong through.
Nvidia’s chips aren’t usually on the latest nodes.
That said, Nvidia will certainly try to move smaller and lower volume chips in future generations to the most cutting edge node such as their CPUs, networking chips. Vera Rubin has 7 unique chips.
AMD is taking up much of the N2 supply with their Epyc CPUs this year. I don't see why Nvidia, ARM, Graviton won't try to book as much of the most cutting edge node as possible for their future enterprise CPUs given that AMD has done it for N2. I can see enterprise CPUs becoming equal launch partners to TSMC nodes as Apple. Agentic AI is going to cause a huge demand increase in CPUs.
Apple was reported to have locked up half of the initial year's 2nm production, which is lower than their share of 3nm, but hardly a sign of being squeezed out of the market
Apple was actually told by TSMC to move off of N3 asap because Nvidia with its Vera Rubin and Google TPUs will take over.
Semianalysis had a great and detailed article about TSMC & Apple and how the future might play out: https://newsletter.semianalysis.com/p/apple-tsmc-the-partner...
https://www.macrumors.com/2025/08/28/apple-tsmc-2nm-producti...
The Macrumors article definitely isn't when Apple decided to buy half of N2 capacity for the first year. It would have happened years ago.
That said, enterprise AI chips will still take the cake in terms of margins.
I do expect personal AI machines to take off in a few years once local models and local hardware hit an inflection point. M5 Max is a major improvement for local inference due to the added matmul accelerators, but the RAM capacity and bandwidth bottleneck is huge.
Intel is both at the same time, AMD and TSMC.
Apple aren’t going to be asking for Intel Inside.
‘Can you make this? How many and much?’
Not to mention that Intel does not and will not any time in the next decade have the capacity for a product of that quantity.
There was a recent interview with Dylan Patel and he explained it pretty well.
Basically, there are tiers of risks and how "AGI pilled" each tier is:
Tier 1: OpenAI/Anthropic - extremely AGI pilled and think it's a sure thing. They want all layers underneath to prepare to make as many chips and energy as possible and go all in.
Tier 2: Nvidia/AMD/Broadcom - very bullish but doesn't think AGI is a sure thing
Tier 3: TSMC, Samsung, SK Hynix, Intel, Sandisk, Micron - bullish but if they're wrong and overbuild, they can actually go bankrupt. Each fab can cost tens of billions. An N2 fab is estimated to be $30b each.
Tier 4: Every supplier to T3 such as ASML, Applied Materials, other fab machines and suppliers - Less bullish, may even see this as just a super cycle rather than a permanent increase in demand so they're less inclined to take too many risks to scale up
Apple hardware standards. Apple software could use some of these.
Intel would only need to be on par with TSMC's older 3nm node to Fab Apple's entry level SOCs.
Intel would need to have lots of (and / or very big) customers lined up or big plans to manufacture possibly more than CPUs of their own design to make use of that capacity.
> can print transistors 1.7 times smaller – and therefore achieve transistor densities 2.9 times higher – than they can with NXE systems.
https://www.asml.com/en/news/stories/2024/5-things-high-na-e...
Apple Inc. has held exploratory discussions about using Intel Corp. and Samsung Electronics Co. to produce the main processors for its devices in the US, a move that would offer a secondary option beyond longtime partner Taiwan Semiconductor Manufacturing Co. [0] (paywalled)
They wouldn’t need either Intel or Samsung if it wasn’t bleeding edge. I think it’s 14A for Intel. TSMC is still have the edge overall, but they are neck and neck in terms of node.
TSMC will be more than fine. They are hardly able to meet the demands.
[0] https://www.bloomberg.com/news/articles/2026-05-05/apple-exp...
There’s a lot of “main” processors for Apple’s devices at this point.
I would be deeply skeptical of a brand new flagship iPhone <n> Pro having an Intel fab’d SoC until at least a few years into this arrangement.
But it’s likely not a one-dimensional decision. Supply chain diversification, China / Taiwan, Intel having established US fabs, on and on. Seems like a wise decision in every way.
It's not clear if it's going to get better either. It could get worse in terms of supply.
Honestly, I found it hard to understand why they abandoned RAM and solid state memory fab sectors too. With all the national security spending by DoD, DoE, etc., I would have thought there is room for some US-based business to remain, even if some of the mass consumer stuff has been lost to low margin international competitors.
Intel was in ram and solid state for a bit but didnt stick with it. Optane was a huge flop and they use different manufacturing techniques vs CPUs. Plus Micron is one of the biggest dram manufacturers and US based.
Isn’t running a fab only while it makes top of the line chips a bad idea because you can still make good money from it in later years?
If so, I think they, _if_ they ever want to own a fab (unlikely, IMO), they’ll want to accept outside customers for it when it has stopped being best-in-the-world.
It is probably a second source deal for a popular chip or a support chip in an older process node like a power converter.
> The Journal report said the U.S. government, which became Intel's largest shareholder last year under a deal with its CEO Lip-Bu Tan, played a major role in bringing Apple to the negotiating table.
... smells what it smells.
Is this maybe a way to expand the affordable neo line?
The government (both current and previous administrations) is doing everything it can to make sure they do keep up, at the very least. And with enough money being thrown at it, they probably will.
Nobody benefits if just one company controls the state of the art in chip manufacturing, and Intel is one of maybe two other companies positioned to have a chance at competing effectively with TSMC.
What IMO is a bad strategy is the aversion to nationalization that exists in the USA. They buy billions worth of shares in key companies to inject capital during times of crisis, to later divest and refuse to be a player in industry.
China's model is much more complex. There's state-owned companies, companies where the state is a major stake-holder, and private companies too. It seems to afford them more tools to push and steer industries as they see important.
The USA is no stranger to this at smaller scales; airports are state run (at the municipal or state level). This rids them of the burden of profit, and allows them to be strategically use for the broader benefit when it makes sense.
Some are profitable; state-run doesn't necessarily mean unprofitable. But some can written off as infrastructure investments that don't make money but make other industries in the region competitive. At some point this makes sense if you want to keep pushing forward; let's stop worrying too much about making money on X, because if X is a widely-available commodity, we can instead make money on Y and Z.
I see it in Mexico too. Mexico's private healthcare is affordable and good because it has huge state-run healthcare system to compete with. State-provided healthcare isn't the best or fastest healthcare you can get, but it is free. This certainly puts competitive pressure on private healthcare companies, and in a way gives the Mexican government the best regulatory tool: the market itself. The Mexican government isn't trying to destroy private health, but via the state health enterprise it gains tools to steer and push the health industry in ways it may deem important.
Looking at the state of EVs and the car industry, I think it's clear whatever the Chinese government did to incentivize EV innovation was more effective than the federal incentives the USA government provided. At one point the USA government had a 60% stake in General Motors [1]; meaning it was nationalized, before being privatized again by 2013.
I just wonder what the USA could've done with that machinery; could they have offered a cheap EV, even if it's low quality, to push adoption, competitive pressure and get supply chains going? Could they have further commoditized certain parts to lower costs? Could they have strategically opened factories in certain locations to lower the risk and investment cost of future companies, and this way get the ball rolling on creating new auto-industry regions? We will never know, but we do know the USA's auto industry is now on the defense playing catch-up to China, and there seems to be little the USA government can do except placing tariffs and offering subsidies.
[1]: https://www.cnbc.com/2013/12/09/government-sells-the-last-of...
Also, the NEO line uses cutting edge technology that is necessary for the iPhone SOC, so this is probably for other chips.
But the big reason x64 couldn't keep up was that Intel's fab capabilities were horrible. Intel got stuck and couldn't get smaller nodes out and competing fabs caught up and left Intel in the dust.
Apple was able to ship 22nm Intel processors in Summer 2012 while their iPhone processors were 32nm that Fall and 28nm in Fall 2013. Spring 2015, Apple shipped 14nm Intel laptops and later that Fall 14/16nm iPhones. Competitors had caught up and soon TSMC started surpassing Intel.
Yes, Intel's fab capabilities have improved lately, but Intel's fab failures were causing x64 to fall behind. If Intel had retained fab supremacy, x64 wouldn't have fallen behind. I think Apple still likes the idea of being able to build exactly the parts they want (so they can optimize for power, thermals, etc), but Intel fell behind because their fabs stopped being competitive.
It’s a good way to keep pumping the share price too.
That alone is a strong reason for Apple to show up. Apple has some pretty wild patents on chiplet System-on-Chip designs! https://bsky.app/profile/ogawa-tadashi.bsky.social/post/3mi7...
It's good to see. Guess they were worth saving. I do hope their abandonment of discrete desktop GPU is temporary.
It was only 9 months ago [0] that almost everyone here was bearish (not me [1]). Now it is the opposite.
Next we will here some folks wishing they should have joined Intel when it was $20 a share.
Another way to look at it. TSMC profit in 2025 was equivalent to Intel revenue (both about $55B), but Intel made zero dollars profit, yet somehow their market cap is now half of TSMCs.
But when is the time to get out?
r/wallstreetbets has been amusing to watch.
Obviously I couldn't read the article due to it being paywalled.
>It is unclear which Apple products Intel would make chips for, according to the report. Intel and Apple declined to comment.
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For what it's worth, Reader Mode in Firefox displays the article text anyway.
Ah, so this wasn't a decision Apple freely made based on technical merits. Instead it sounds more like big government and a fancy stock manipulation scheme.
My guess, Apple drags their feet for a couple years and bails after Trump leaves office(or is significantly weakened after the midterms).
What's wrong with US gov caring about supply chain and manufacturing capability of the most needed technology right there - on American soil?
It is in US' interest to be able to produce such complex tech locally
A compromised supply chain is a huge intelligence/national security risk, not just for military platforms but everything from government and commercial datacenters to personal devices used by both public and private sector individuals.
This wouldn't be Apple's first rodeo with Intel. They know how prior partnerships soured. Could a sufficiently powerful shareholder, like the US government, help mitigate Apple's concerns about the outcome of a new partnership? I.e. that Intel would be pressured to honor certain strategic obligations, even if the leadership at Intel isn't so keen?
Was the concern in the past that Intel wasn't honoring strategic obligations or was it that Apple realized their tech sucked and TSMC was the only viable path to deliver world-leading products?
Sure, supply chain redundancy is good, but that wasn't enough to get AAPL interested before.
Microsoft is pretty justified not wanting to support that, versus UEFI on OG Bootcamp. The majority of Linux distros don't ship image support for iBoot either.