Image source @Visual China
Text | Technology Daily Push
September 26, according to supply chain news, Apple has clearly rejected TSMC's price increase requirements in 2023.
is the top chip foundry company . TSMC, which is used to rising prices at will, has finally "beaten". Apple fully reflects what it means to "buy stores with big customers".
Perhaps TSMC is regretting the potential big customer of Huawei that year.
Apple refuses to raise prices TSMC dare not offend
Since this year, due to the continuous price increase of various upstream chip key materials, such as photoresist and CMP slurry, chip foundry costs have increased significantly, and TSMC has had to raise the price of chips.
But Apple does not seem to accept TSMC's reason. It also made it clear that it did not agree with TSMC's price increase requirements.
At present, it is not clear how much TSMC plans to increase this round.
is worth mentioning that at the beginning of this year, TSMC announced that will increase the chip foundry price by 10%-20%.
But in order to retain Apple, TSMC only raised the price of the key A-series processors of the iPhone by about 3%. is much lower than the increase given by TSMC to other chips.
However, even so, Apple explicitly refused.
Apple is so tough, perhaps because of the huge chip demand in its hands.
TSMC "fruit" changed to "Apple CSMC"
According to data from research agency Digitimes, TSMC's revenue in 2021 was US$56.8 billion, while Apple contributed 14.8 billion yuan, accounting for nearly 26%.
. The key is that Apple almost takes up all the production capacity of TSMC's most advanced process.
Currently, the A series and M1/M2 series chips of iPhone and iPad are all manufactured by TSMC, and they all use the most advanced 5nm and 4nm process processes.
The capital of TSMC negotiations is not high in the face of Apple's rejection.
Compared with Apple, the big funder, the revenue share of Qualcomm , MediaTek , AMD , Nvidia, etc. is far from enough, and it is not easy to plug this hole.
, especially as mobile phone shipments continue to decline, it is difficult for other mobile phone manufacturers to fill in the vacancy of Apple. JPMorgan has confirmed that TSMC is being cut by four major customers including MediaTek, Qualcomm, AMD, and Nvidia to cope with the current decline in the consumer market. To make matters worse, TSMC expects capital expenditure to reach US$40 billion in 2022, of which 70%-80% is expected to be used for the research and development of advanced process technology .
Only big customers like Apple have the ability to pay for advanced process chip research and development.
, and TSMC has forced prices to rise, Apple can transfer orders to other foundries to deal with it. The A9 chip of iPhone 6s was manufactured by Samsung . TSMC's 10 billion R&D costs are wasted.
The final result, TSMC may be able to continue to give Apple VVVIP treatment.
misses Huawei
The situation of TSMC is becoming increasingly embarrassing.
Once Apple gives orders to chip foundries such as Samsung, TSMC will not replace Apple's new customers, and a large number of EUVs will be idle, which is not a consequence that TSMC can bear.
In the past, TSMC once had Huawei, a potential major customer.
In 2019, Huawei's orders grew rapidly, contributing 15% of its revenue to TSMC, second only to Apple, forming a check and balance with Apple.
, for well-known reasons, Huawei was removed from the list of TSMC's customers in 2020.
At that time, an investor asked TSMC:
TSMC Chairman Liu Deyin was very confident and said:
translation translation means "horse runs, dances, and money earns." In fact, Apple has indeed perfectly included the capacity gap left by Huawei.
However, TSMC may have been too early to show off.
loses Huawei, TSMC and Apple, a big customer replacement. But without Apple, TSMC will never find the next Huawei.
It can be said that TSMC lost Huawei's orders and lost not only an important income, but also caused TSMC to lose its bargaining power.
TSMC has begun and is heavily dependent on American companies, including Apple.
According to the latest data from 2022Q1, the revenue from North American customers accounts for as high as 64%. The proportion of revenue from mainland China continued to decline, from 17% in 2020 to 10% in 2021.
At this moment, TSMC's main high-end process customers all came from the United States: Apple, Qualcomm, Nvidia, AMD, etc. In the future, TSMC may have to accept more unreasonable requirements on American chips.
TSMC's stock price has fallen 42% from the beginning of the year this year. If calculated from the highest point, the decline will be even greater.
plus the strong competition from South Korea's Samsung, TSMC is probably very regretful now and has lost Huawei, a potential customer.
Conclusion
TSMC is facing the decline in the dividends of process . The increasingly expensive process and less and less performance improvements. Apple, Nvidia, and AMD are no longer willing to be takeovers, placing orders for the new process and reimbursing TSMC's R&D costs. After Huawei cut off the supply of
, TSMC finally overestimated its market. The 3nm process was finally developed, but now it is forced to give up because no customers use it. TSMC overlooks the fact that the more advanced the process, the more R&D expenses it pays increase exponentially. But the more advanced the process, the smaller the track. After losing Huawei, it can't be digested by Apple, , Intel, and other manufacturers alone. The shipment volume of
cannot be increased and the cost cannot be distributed in large quantities, so the price cannot be reduced. Now that the performance of 4nm and 5nm chips is oversold, and without leapfrog improvements in performance, it cannot form competitiveness, so terminal manufacturers are naturally unwilling to spend a lot of money to use.
This time TSMC wants to raise prices, and Apple started to say no, it was just the beginning.
What’s even more terrifying is that as Apple’s voice becomes stronger in the future, TSMC’s future life may be even more uncomfortable, which may be the consequence of “customer bullying stores”.
