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Comment by drexlspivey | Hacker News Reader

Can anyone speculate what will happen to Apple if for any reason TSM abruptly stops supplying chips? Will their revenue just drop by 80%?

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Everybody except Intel and Samsung is screwed if TSMC stops making chips.

Apple (and the rest of the mobile industry) would try to move to using Samsung's fabs and Intel would go back to being the undisputed king on desktops, laptops, and servers.

I think TSMC has like 2-3 times the fab capacity that Samsung does right now for modern chips, so there would be a huge chip shortage.

Apple's $200 billion cash pile would come in handy when trying to buy fab capacity from Samsung so they might come out ahead of less cash-rich competitors.

There would be a significant hit to processor performance. Samsung fabbed the recent Snapdragon 8 Gen 1, which has comparable single core performance to the iPhone 7's A10 fusion chip.

The performance of that core is not necessarily all dependent on the node... Apple have been lauded for their designs. Samsung / arm, not so much.

> Samsung / arm, not so much.

I don’t think that is fair. ARM and Apple have very different objectives. Apple does not care if its CPU design division makes any money and they can get away with very large SoCs that rely on cutting edge manufacturing. ARM on the other hand needs to sell designs that manufacturers can use to make money. So there is a tendency to go towards simpler designs that are easier to manufacture. So sure, Apple has an edge in performance. But they don’t have the same business model or optimise for the same things.

>There would be a significant hit to processor performance.

You are probably right. Look at the gains Qualcomm saw by migrating from Samsung to TSMC: https://www.anandtech.com/show/17395/qualcomm-announces-snap...

I never thought you’d get gains by simply switching vendor. 4nm to 4nm and they still saw gains.

The thing is that 4nm doesn't actually mean anything. Intel's 10nm node is mostly on par with TSMC N7 and it caused quite a bit of confusion, so Intel renamed a bit improved version(something they would call 10nm++) to Intel 7. It's all just marketing and have been for 15 years or so.

With $200 billion why can't apple just fabricate their own chips?

You mean TSMC.

Well, they would be seriously hurt. However, does that matter when almost every tech company (including Qualcomm, MediaTek, AMD, Apple, ARM, Broadcom, Marvell, Nvidia, Intel, so forth) would also be harmed?

TSMC going down is basically the MAD (Mutually Assured Destruction) of tech companies. Kind of a single point of failure. Intel would probably weather it best but would still be hurt because they need TSMC for some products. Plus, well, in the event of TSMC's destruction (most likely by a Chinese invasion), Intel might raise prices considerably or even stop sale to consumers especially as their chips would now have major strategic value for government operations. NVIDIA might also survive by reviving older products which can be manufactured by Samsung in Korea, but same situation about the strategic value there, and getting chips from Korea to US might be difficult in such a conflict.

> TSMC going down is basically the MAD (Mutually Assured Destruction) of tech companies.

This is why it's appropriately called the "Silicon Shield", within Taiwan: https://semiwiki.com/china/314669-the-evolution-of-taiwans-s...

Does anyone have any resources that explain the historical reason(s) TSMC became what it is? How did the world's most important hardware manufacturer manage to get constructed on a geopolitical pinchpoint?

This podcast covers most of the important points:

https://www.acquired.fm/episodes/tsmc

Way down the road I hope Tim Cook writes a memoir. I’m curious as to his unvarnished thoughts about doing business in (and being so reliant on) Taiwan and China. I’m sure he can’t publicly express some of those thoughts without unnecessarily adding risk for Apple but he must have lots of interesting opinions about things like being reliant on TSMC vs trying to build their own fabs, etc.

Based on how Jobs life and legacy are discussed at Apple, I doubt cook will ever speak frankly about matters that affect Apple.

Kara Swisher is interviewing him and Laureen Powell Jobs soon. I expect that interview to continue to focus on only the best possible characterizations of Steve.

I recall Tim Cook speaking about it actually. He says, Apple is there not because it's cheap but because they actually have unmatched engineering capacity. He was talking about how much quicker everything can get moving and how much accessible engineering talent they have.

It makes sense, after all there are much poorer countries in the world but you can't expect for Afghanistan for example be like "okay okay Apple, we will do the chips and the phone at %25 discount". In fact, you can't expect even EU or USA to start easily doing that because the manufacturing know how is long gone with the de-industrialisation of the west. Sure, there's some talent and capacity left but its not anywhere near the scale of what exists in Taiwan and China.

If WW3 goes hot beyond the regional proxies, we all lose pretty hard.

A new iPhone 14 or Mac M2 will be a pipe that we all chuckle about how we used to care about such things.

If the economic situation we are all into at the moment is because of Ukraine war, I think is ww3 happens slower iPhones will be the least of our concerns.

If TSMC poofed out of existence because of a few bombs from china or a freak super natural disaster, global GDP would drop significantly and quickly. One of the biggest SPOF that I'm worried about in the world.

Repeat of the car market? I'm going to make a bunch of money off the old computers collecting dust here, and Apple's going to have to unlock support for new OSes on them, making all its money on services.

TSMC announced its new Phoenix Arizona fab would begin mass production in the first quarter of 2024.

Similarly Intel just announced a new partnership to accomplish similar. Also in Arizon:

https://money.usnews.com/investing/news/articles/2022-08-23/...

By that time it'll be far from bleeding edge. The Taiwan fab will be close to N2 while the Arizona fab will be able to produce 5nm generation chips, that'll be 4-5 year old tech then.

That is funny we are literally about to run out of water over here in AZ.

For what reason would TSMC abruptly stop supplying chips short of war? There's nothing other than war that would cause it. And if there's a war, Apple's profits are the least of problems.

Climate change impacts or global pandemics could also significantly impact TSMC's operations. Or, Chinese actions that are somewhat short of full-on war.

Also relevant here: TSMC is building a chip fab in the US.

> For what reason would TSMC abruptly stop supplying chips short of war?

Earthquakes would be top of my list of things that would cause problems.

The facilities are made to mitigate and reduce damage due to earthquakes.

https://esg.tsmc.com/en/update/governance/caseStudy/1/index.....

Meteor, Large tsunami, Earth quake, Solar flare, extremely infectious disease that isn't as weak as Covid-19. There are so many natural disasters that could cripple or outright destroy TSMC production facilities.

Meteor and Solar Flare that are big enough to cause problems would be global problems.

Large tsunami is possible, but I doubt they built these things right next to the ocean, and as the other poster says they're built to withstand large earthquakes.

Infectious diseases are another global problem.

The claim was "There are no things except war that can disrupt TSMC". There was nothing about the cause having to have no global effect.

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