TSMC has been the exclusive supplier of Apple’s systems-on-a-chip since 2014, but that 12-year streak could be nearing its end.
According to The Wall Street Journal, Apple is exploring whether some of its lower-end processors could be manufactured by a company other than TSMC.
“Now that TSMC is doing more business with Nvidia and other AI companies, people with knowledge of the chip supply chain said Apple was exploring whether some lower-end processors could be made by someone other than TSMC,” the report said.
The report did not mention any candidates, but previous rumors have indicated that Intel could begin supplying some lower-end Apple processors in 2027 or 2028.
A few months ago, GF Securities analyst Jeff Pu said that he expected Intel to reach a chip supply deal with Apple for at least some non-pro iPhone models starting in 2028. Based on that timeframe, Intel could supply Apple with at least a portion of A21 or A22 chips for future iPhone models, if the companies agree to a partnership.
Apple’s return to Intel might also involve some Mac and iPad chips. Last year, Tianfeng Securities analyst Ming-Chi Kuo said he expected Intel to begin shipping Apple’s lowest-end M-series chip for select Mac and iPad models as early as mid-2027. For this, Kuo said Apple planned to utilize Intel’s 18A process. He did not mention the iPhone.
There is no indication that Intel would play a role in designing the iPhone chips, with its involvement expected to be strictly limited to fabrication. That would differ from the era of Intel Macs, which used Intel-designed processors with x86 architecture. Apple began transitioning away from Intel processors in Macs in 2020.
Intel would help Apple diversify its supply chain, which could come at a pivotal time, as Nvidia has reportedly surpassed Apple as TSMC’s largest customer amid rising competition for NAND memory and RAM chip supply for AI servers.
TSMC is not the only chip supplier seeing increased demand amid the AI server boom, as Samsung and SK Hynix have both gained enough leverage to demand Apple pay more for RAM chips, according to The Wall Street Journal‘s supply chain sources.
On an earnings call last week, Apple CEO Tim Cook said that rising memory chip prices had a “minimal impact” on Apple’s gross margin last quarter, but he does expect a “bit more of an impact” on the company’s gross margin in the current quarter. He said Apple “will look at a range of options to deal with that” as necessary.
Apple analyst Ming-Chi Kuo does not expect price increases for the iPhone 18 lineup.
Apple reported record-breaking revenue of $143.8 billion last quarter, up 16% year-over-year, and it is predicting similar 13% to 16% year-over-year growth and gross margin of 48% to 49% in the current quarter, so the company is still reporting impressive earnings results despite concerns surrounding memory chip prices.
