Apple’s Changing Position in TSMC’s Customer Hierarchy
Apple, long regarded as TSMC’s most important client, appears to be losing its top spot as the semiconductor giant’s biggest revenue contributor. Despite securing more than half of TSMC’s initial 2nm wafer capacity for its upcoming A20 and A20 Pro chips, which will power the iPhone 18 series, Apple is reportedly no longer receiving priority in shipments. This shift comes as TSMC’s earnings are increasingly driven by the booming AI sector, which has reshaped the foundry’s customer landscape.
Details on TSMC’s Pricing and Production Changes
According to a tip from the Weibo leaker known as Fixed-focus digital cameras, TSMC’s CEO C.C. Wei recently visited Apple’s headquarters to discuss what is described as the largest price increase in recent years. This move reflects TSMC’s response to soaring demand and supply constraints, particularly for advanced 2nm wafers. The company has reportedly been forced to raise prices on its cutting-edge semiconductor nodes for four consecutive years starting in 2026, with Apple’s A20 chip estimated to cost around $280 per unit. The 2nm node has seen 1.5 times more tape-outs than the 3nm node, signalling a diverse and growing customer base beyond Apple, including major players like Qualcomm and MediaTek.
Context: The Rise of AI and Its Impact on TSMC’s Revenue
Historically, Apple has been a cornerstone of TSMC’s revenue, contributing approximately 24 percent in 2024. However, the rapid expansion of AI-related semiconductor demand has propelled companies like NVIDIA to the forefront, with NVIDIA now accounting for 13 percent of TSMC’s total revenue. This shift underscores the changing priorities within the semiconductor industry, where AI workloads are driving unprecedented capital expenditure. TSMC’s investment in AI-focused production capacity is expected to reach between $52 billion and $56 billion this year, reflecting the scale of this market transformation.
Despite previous speculation about preferential treatment for Apple — including rumours of exclusive access to higher-quality wafers — analyst Ming-Chi Kuo has clarified that TSMC does not absorb the costs of defective wafers, dispelling some myths about their partnership. Nonetheless, Apple’s loss of priority status marks a significant change in the dynamics between the two companies.
What This Means Going Forward
As AI continues to dominate semiconductor demand, Apple’s role as TSMC’s top customer may remain diminished for the foreseeable future. While the iPhone maker still secures substantial production capacity for its next-generation chips, the company will likely face higher costs and longer wait times compared to previous years. It remains to be seen whether Apple will regain priority status once the AI market stabilises, but for now, TSMC’s focus is clearly shifting towards its rapidly growing AI clientele.
For more insights on this developing story, see the original Weibo post by Fixed-focus digital cameras.