Apple’s Potential Shift in Chip Manufacturing Strategy After 12 Years
For over a decade, Apple has relied exclusively on Taiwan Semiconductor Manufacturing Company (TSMC) to produce its custom-designed system-on-a-chip (SoC) processors. This longstanding partnership has been pivotal in delivering the high-performance chips that power Apple’s diverse range of devices, from iPhones to Macs. However, recent developments suggest that Apple is contemplating a significant change in this strategy.
According to a report by The Wall Street Journal, Apple is exploring the possibility of diversifying its chip manufacturing by engaging additional suppliers for its lower-end processors. This consideration arises as TSMC’s client portfolio expands to include major players in the artificial intelligence (AI) sector, such as Nvidia and AMD. The surge in demand for AI-related hardware has intensified competition for TSMC’s advanced manufacturing capabilities, potentially impacting Apple’s access to cutting-edge chip production.
Industry analysts have identified Intel as a potential candidate to collaborate with Apple in this new manufacturing approach. Jeff Pu, an analyst at GF Securities, has projected that Intel could commence supplying Apple with chips for non-Pro iPhone models as early as 2028. This partnership would likely involve Intel fabricating Apple-designed A21 or A22 chips using its forthcoming 14A process technology. It’s important to note that Intel’s role would be confined to manufacturing, with Apple retaining full control over chip design. This arrangement contrasts with the previous era when Intel provided both design and manufacturing for Mac processors based on x86 architecture.
The potential collaboration with Intel isn’t limited to iPhones. Ming-Chi Kuo, an analyst at Tianfeng Securities, has indicated that Intel might begin producing Apple’s entry-level M-series chips for select Mac and iPad models by mid-2027. This production would utilize Intel’s 18A process, marking a significant step in Apple’s efforts to diversify its supply chain and reduce reliance on a single manufacturer.
Several factors are driving Apple’s consideration of this strategic shift:
1. Increased Competition for TSMC’s Resources: The burgeoning AI industry has led to heightened demand for advanced semiconductor manufacturing. Companies like Nvidia and AMD are vying for TSMC’s production capacity, which could potentially limit Apple’s access to the latest manufacturing technologies. Reports suggest that Nvidia may have even surpassed Apple as TSMC’s largest customer in certain quarters of 2025.
2. Supply Chain Diversification: By engaging multiple manufacturing partners, Apple aims to mitigate risks associated with dependency on a single supplier. This strategy enhances resilience against potential disruptions and provides greater flexibility in production planning.
3. Domestic Manufacturing Initiatives: Collaborating with Intel aligns with Apple’s broader objective of increasing domestic production. Intel’s substantial investments in U.S.-based fabrication facilities, including a new plant in Arizona, offer Apple an opportunity to bolster its American manufacturing footprint.
This potential shift in Apple’s chip manufacturing strategy reflects the company’s proactive approach to navigating the evolving semiconductor landscape. By considering partnerships with multiple manufacturers, Apple seeks to ensure a stable and efficient supply chain capable of supporting its diverse product lineup.
