Apple explores using Intel and Samsung to build chips in US beyond TSMC
By Mark Gurman, Ian King and Ryan Gould
Apple Inc. has held exploratory discussions about using Intel Corp. and Samsung Electronics Co. to produce the main processors for its devices, a move that would offer a secondary option beyond longtime partner Taiwan Semiconductor Manufacturing Co.
The iPhone and iPad maker has had early-stage talks with Intel about enlisting the company’s chipmaking services, according to people familiar with the deliberations. Meanwhile, Apple executives have made visits to a Samsung plant under development in Texas that will also make advanced chips.
Neither effort has resulted in any orders so far, and the work with both suppliers remains preliminary, according to the people, who asked not to be identified because the talks are private. Apple has concerns about using non-TSMC technology and may not ultimately move forward with another partner, the people added.
For more than a decade, Apple has designed the main processors, known as systems-on-a-chip, that power its devices and relied on TSMC to build them using the most advanced production processes in Taiwan. The latest iPhones and Macs use what is known as the 3-nanometer fabrication node.
But not even Apple, one of the largest purchasers of silicon, is immune to supply-chain disruptions. Recent shortages have been driven by the massive build-out of AI data centres and higher-than-anticipated demand for Macs suitable for running AI models locally. That, in part, highlights the need for Apple to consider additional suppliers.
Apple executives discussed the problem during the company’s quarterly earnings call last week, saying that a lack of chips for the iPhone and Mac was constraining growth. “We have less flexibility in the supply chain than we normally would,” Chief Executive Officer Tim Cook said.
But finding backup suppliers is no easy feat. Intel and Samsung can’t reliably offer the type of production and scale that’s turned TSMC into the dominant made-to-order chip manufacturer — and one of Apple’s most critical supply-chain partners.
For Intel, finding external customers for chip production is a key piece of a comeback plan under CEO Lip-Bu Tan. The company remains in the early stages of trying to line up clients for its so-called foundry business after past false starts. Landing Apple as a customer would represent a massive win for Tan and potentially help attract additional new business.
Samsung has had more success in this area, but it too has struggled to keep pace with TSMC and remains a distant second in the foundry market. Samsung would benefit greatly from an endorsement by Apple — a company it competes with in smartphones and other sectors.
Apple and Intel share a history that’s long and rocky. Intel designed and supplied Mac processors from 2006 until about 2020, when Apple moved its desktops and laptops to in-house chips based on iPad components. Over a decade ago, Samsung served as a manufacturing partner for Apple’s iPhone chip designs.
Samsung is already working on building more peripheral components for the iPhone and other products, including ones for managing device power, Apple said earlier.
Apple prefers to have at least two suppliers for any major component, giving it leverage in pricing negotiations and protection from supplier disruptions. For instance, it relies on several different manufacturers for the screens used across its product lineup.
Apple’s Cook, who was instrumental in building its global supply chain, has long cautioned about relying on a single geography for critical components. Production in Taiwan carries particular risks because China sees the self-governing island as part of its territory.
As far back as 2022, Cook told employees in an all-hands meeting that “regardless of what you may feel and think, 60 per cent coming out of anywhere is probably not a strategic position,” referring to chip production concentrated in Taiwan.
Since then, Apple has worked closely with TSMC to help expand operations in Phoenix, where the supplier now produces a limited number of chips for Apple from a single plant. It’s ramping up work quickly for Apple, which said it will get 100 million chips from Arizona in 2026.
That number would only cover a sliver of Apple’s overall annual device shipments, and executives remain concerned about potential disruptions to supply if China were to invade Taiwan.
Like other tech companies, Apple also is contending with shortages of memory chips. But Cook said that finding enough main processors — the SoCs — is a bigger challenge right now.
“The primary constraint is the availability of the advanced nodes our SoCs are produced on, not memory,” Cook said during the earnings call. That’s making it harder for Apple to satisfy demand for products like the Mac mini and Mac Studio, he said.
“I believe it will take several months to reach supply-demand balance,” he said.
Supply chain snags also have hit the iPhone 17 Pro line. Apple has operations staff working to prevent the spread of constraints to other product lines, such as the AirPods and Apple Watch, which use different types of processors from iPhones and Macs.
