Key Points
- Apple held early talks with Intel and Samsung to manufacture its main device processors
- Apple currently relies solely on TSMC in Taiwan for its system-on-a-chip production
- Tim Cook cited chip shortages constraining iPhone and Mac growth last week
Apple has held exploratory discussions with Intel and Samsung Electronics to manufacture key processors in the United States, as it looks to diversify beyond Taiwan Semiconductor Manufacturing Company, Bloomberg reported, citing people familiar with the matter.
The report said the discussions are at an early stage and have not led to any firm orders. Apple executives have reportedly engaged with Intel on its foundry services and visited a Samsung facility under development in Texas that is expected to produce advanced chips.
Apple currently designs its own system-on-chip (SoC) processors for devices such as iPhones and Macs, while relying heavily on TSMC for manufacturing. The latest chips are built using advanced 3-nanometre process technology, an area where TSMC remains the dominant player.
The reported move comes amid growing pressure on semiconductor supply chains, driven by rising demand for artificial intelligence workloads and data centre expansion. Higher demand for AI-capable devices has also increased requirements for advanced chips.
Apple CEO Tim Cook recently said the company has “less flexibility in the supply chain than we normally would”, noting that chip shortages have affected production of certain products.
Diversifying suppliers remains challenging for Apple
According to the Bloomberg report, Apple has concerns about adopting non-TSMC manufacturing technology and may ultimately choose not to proceed with alternative partners.
Diversifying suppliers for advanced chips remains challenging, as only a few companies globally can match TSMC’s scale and technological capabilities. Both Intel and Samsung are investing in expanding semiconductor manufacturing capacity, particularly in the US, amid policy support aimed at strengthening domestic chip production.
A potential partnership with Intel could also align with US government efforts to boost local semiconductor manufacturing and reduce reliance on overseas supply chains.
Samsung is already part of Apple’s broader supply chain, providing certain components. However, expanding its role into advanced processor manufacturing would mark a significant shift.
Apple has also been working with TSMC to expand production in the US, including facilities in Arizona. However, output from these plants is expected to cover only a small portion of the company’s global demand.
The report noted that Apple has long been cautious about over-reliance on a single geography, particularly Taiwan, given geopolitical risks and supply chain vulnerabilities.
Apple, Intel, Samsung and TSMC have not publicly commented on the reported discussions.
Your Questions, Answered
Why is Apple looking for alternatives to TSMC?
Apple faces chip shortages driven by AI data centre expansion and high Mac demand. Tim Cook said the company has less supply chain flexibility than usual, constraining iPhone and Mac growth.
Which companies is Apple talking to about chip manufacturing?
Apple has held early-stage discussions with Intel about its chipmaking services and has visited a Samsung plant under development in Texas. Neither effort has resulted in orders so far.
What are Apple's concerns about changing chip suppliers?
Apple has concerns about using non-TSMC technology. Intel and Samsung cannot yet match the production scale that has made TSMC the dominant contract chip manufacturer.
Why does Taiwan chip production pose risks for Apple?
China claims Taiwan as its territory. Tim Cook has said that 60 per cent of production from any single location is not a strategic position, highlighting concentration risks.
