Apple will gain increasingly needed diversification.
US supply chain gets a boost.
Should be fine for TSMC in the short to medium term. Apple not going to risk actual mainline iPhone SoC on Intel any time soon, so lion share of TSMC Apple revenue will be fine.
It's not really realistic to make Mac, Watch, iPad chips on TSMC's best node in the next 3-4 years - assuming there is no collapse in AI. Unfortunately, this might mean we will get inferior Intel chips for our Macs. Intel nodes, as it stands, are far more power hungry, less dense, and lower yielding. Intel's own Panther Lake CPU tile is on 18A and it's extremely disappointing in terms of perf/watt and raw perf.
I still expect iPhone chips to be made on the best TSMC nodes though. I'm assuming Apple will design every future core for both TSMC and Intel, sort of like how they dual sourced with TSMC and Samsung in the past for the same generation.
Panther Lake does not have great raw performance, because for now Intel has not succeeded to obtain in their new 18A CMOS process clock frequencies as high as they get in the older TSMC 3-nm process used for their previous Arrow Lake H CPU generation and the CPU cores of Panther Lake have only minor changes that can affect performance in comparison with Arrow Lake/Lunar Lake.
On the other hand, from the published reviews that I have seen, Panther Lake has significantly better performance per watt than Arrow Lake H, which can be attributed only to the Intel 18A process when compared with the TSMC 3 nm process.
The energy efficiency i.e. performance per watt ratio of CPUs is mainly determined by the fabrication process and not by the CPU design, as long as the CPU designers are competent enough (unlike the single-thread performance, which is determined mainly by the CPU design).
So there is no doubt that Apple CPUs made with the Intel 18A process will have better performance per watt than those made with a TSMC 3-nm process. Moreover, because Apple CPUs can reach a given level of performance at lower clock frequencies, they should be much less affected by the lower clock frequencies attainable with Intel 18A than the Intel CPUs.
We also do not know whether Apple intends to use the Intel 18A process (currently used for Panther Lake laptop CPUs and Clearwater Forest server CPUs), or only its successor, Intel 14A.
The most important one for efficiency is ST perf/watt. MT perf/watt is largely based on how many cores there are. You can achieve better MT perf/watt simply by having more cores (more transistors) and run them at lower clocks. Panther Lake also has an entirely new MT config with 3 tiers of cores vs 2 for Arrow Lake.
For ST perf/watt, it loses to LNL.
Keep in mind that LNL and Arrow Lake used N3B, and future N3 nodes have been much more efficient. Panther Lake CPU is also a new design which should have improved perf/watt automatically regardless of node.
Based on this, one can deduce that Intel 18A is likely a bit worse than N3B and perhaps equivalent to N4P. Keep in mind that N3B went into production in late 2022 and N4P was a 2021 node.
I don’t think Nvidia even has an N2 chip announced, could be wrong through.
Nvidia’s chips aren’t usually on the latest nodes.
That said, Nvidia will certainly try to move smaller and lower volume chips in future generations to the most cutting edge node such as their CPUs, networking chips. Vera Rubin has 7 unique chips. They don't need be all on the same node, and they're not.
AMD is taking up much of the N2 supply with their Epyc CPUs this year. There is no doubt in my mind that Nvidia, ARM, Graviton will try to book as much of the most cutting edge node as possible for their future enterprise CPUs given that AMD has done it for N2. I can see enterprise CPUs becoming equal launch partners to TSMC nodes as Apple. Agentic AI is going to cause a huge demand increase in CPUs.
I do expect personal AI machines to take off in a few years once local models and local hardware hit an inflection point. M5 Max is a major improvement for local inference due to the added matmul accelerators, but the RAM capacity and bandwidth bottleneck is huge.
That said, enterprise AI chips will still take the cake in terms of margins.
Apple was reported to have locked up half of the initial year's 2nm production, which is lower than their share of 3nm, but hardly a sign of being squeezed out of the market
Apple was actually told by TSMC to move off of N3 asap because Nvidia with its Vera Rubin and Google TPUs will take over.
Semianalysis had a great and detailed article about TSMC & Apple and how the future might play out: https://newsletter.semianalysis.com/p/apple-tsmc-the-partner...
It doesn't even beat Lunar Lake in efficiency (made on TSMC N3B) released in 2024.
[0]https://www.notebookcheck.net/Intel-Panther-Lake-Core-Ultra-...
Intel is both at the same time, AMD and TSMC.
Apple aren’t going to be asking for Intel Inside.
It’ll be more like ‘Can you make this thing? How many and much?’
Not to mention that Intel does not and will not any time in the next decade have the capacity for a product of that quantity.
There was a recent interview with Dylan Patel and he explained it pretty well.
Basically, there are tiers of risks and how "AGI pilled" each tier is. The bottlenecks and supply constraints get worse and worse as you down down the tiers.
Tier 1: OpenAI/Anthropic - extremely AGI pilled and think it's a sure thing. They want all layers underneath to prepare to make as many chips as possible and go all in.
Tier 2: Nvidia/AMD/Broadcom - very bullish but doesn't think AGI is a sure thing
Tier 3: TSMC, Samsung, SK Hynix, Intel, Sandisk, Micron - bullish but if they're wrong and overbuild, they can actually go bankrupt. Each fab can cost tens of billions. An N2 fab is estimated to be $30b each.
Tier 4: Every supplier to T3 such as ASML, Applied Materials, other fab machines and suppliers - Less bullish, may even see this as just a super cycle rather than a permanent increase in demand so they're less inclined to take too many risks to scale up
Lip-Bu Tan is a year older than Tim Cook. Doubt he wants to run Intel for very long.
Would be hard for me in the Ternus role to not have that in mind if Intel gets it together.
This is about diversifying their supply chain as they have done all over the place for decades. Displays, for example.
The uncertainty of political order in the near term could make having fabs on their home turf as worth the security.
Learn now, collaborate as preparation in case certain criteria politically, financially, are met.
Apple Inc. has held exploratory discussions about using Intel Corp. and Samsung Electronics Co. to produce the main processors for its devices in the US, a move that would offer a secondary option beyond longtime partner Taiwan Semiconductor Manufacturing Co. [0] (paywalled)
They wouldn’t need either Intel or Samsung if it wasn’t bleeding edge. I think it’s 14A for Intel. TSMC is still have the edge overall, but they are neck and neck in terms of node.
TSMC will be more than fine. They are hardly able to meet the demands.
[0] https://www.bloomberg.com/news/articles/2026-05-05/apple-exp...
There’s a lot of “main” processors for Apple’s devices at this point.
I would be deeply skeptical of a brand new flagship iPhone <n> Pro having an Intel fab’d SoC until at least a few years into this arrangement.
Intel would only need to be on par with TSMC's older 3nm node to Fab Apple's entry level SOCs.
Yes, Intel made the first purchase for High NA EUV machines. That's largely because they were so far behind TSMC, they took a big risk as the first adopter for High NA EUV with their upcoming 14A node to try to catch up.
TSMC thinks it can keep using low NA EUV machines for N2 and A14 nodes even if they have to increase the number of patterning steps. This also means TSMC will likely keep all the AI chip design wins since High NA has half of the reticle size of low NA. The maximum chip size of High NA is half of low NA. This is a major deal for AI chips because they tend to want to be as big as possible.
None of these things mean Intel bought more total EUV machines than TSMC. A quick internet search says TSMC has about 2x as many fabs in active construction as Intel.
And given the kind of performance and battery life we have seen from their latest chips they definitely seem to be back in the game
https://www.notebookcheck.net/Intel-Panther-Lake-Core-Ultra-...
Intel would need to have lots of (and / or very big) customers lined up or big plans to manufacture possibly more than CPUs of their own design to make use of that capacity.
Apple hardware standards. Apple software could use some of these.