Apple taps Intel for chip production, but TSMC's dominance remains

Apple is reportedly beginning to outsource the manufacturing of some lower-end and older iPhone, iPad, and Mac chips to Intel. This strategic shift is influenced by pressure from the White House and ongoing global supply chain bottlenecks, according to reports.

The collaboration marks a significant development for Intel, which previously supplied chips for Apple's Mac computers before Apple transitioned to its own custom silicon designs in 2020, with manufacturing handled by TSMC. Analysts suggest that Apple's move to cultivate new suppliers, even for less critical components, is a prudent strategy while it still holds significant bargaining power.

Despite Intel's renewed involvement, Taiwan Semiconductor Manufacturing Company (TSMC) is expected to maintain its dominant position, supplying over 90% of Apple's chips. This is according to Ming-Chi Kuo, an analyst at TF International Securities, who notes that TSMC's role in producing high-profit AI data center chips is more lucrative than smartphone chip production.

Intel's efforts, particularly its 18A and 14A manufacturing processes, are seen as a crucial attempt to revive its foundry business. By attracting major clients like Apple and Nvidia for custom chip manufacturing, Intel aims to replicate TSMC's success. The company's strategy has shifted from designing and selling its own chips to becoming a dedicated contract manufacturer, a model that relies heavily on securing external clients.