arrogant apple , uncomfortable TSMC.
The most powerful chip giant in the past also lowered his head. Recently, there were supply chain news that Apple has clearly rejected TSMC's price increase requirements in 2023. Subsequently, two other major customers, Nvidia and MediaTek , also intended to demand the same treatment. All signs indicate that TSMC has become weaker and weaker in its voice in the face of Apple, and its future situation may become more and more dangerous.
On this negotiation table, TSMC has too few bargaining chips. On the one hand, its high-end chip production line is highly dependent on Apple; In addition, TSMC's revenue and net profit are also deeply dependent on Apple, accounting for nearly 26%. Apple has enough retreat. Once the negotiations collapse and TSMC refuses to manufacture chips for Apple, Apple will not face the risk of production interruption. It can give chip orders to chip giants such as Samsung , Microsoft , etc.
The capital market has also begun to worry about this. Since 2022, TSMC's stock has suffered continuous selling, with a cumulative decline of 41.5% this year, and the total market value evaporated by US$254.8 billion (approximately RMB 1815.8 billion).
Faced with this situation in front of you, TSMC may miss his former old friend - Huawei .
TSMC's red flag
In the world's top industrial chain game, TSMC has revealed a red flag.
Recently, according to industry insiders, Apple has clearly rejected TSMC's price increase requirements in 2023. Subsequently, Nvidia, another major customer of TSMC, also intends to demand the same treatment; the industry estimates that MediaTek, as TSMC's third largest customer, is also expected to receive "exempt price increase" treatment.
means that the global chip overlord is losing his voice.
analysts said that since 2022, the prices of key materials upstream of chips ( photoresist , CMP slurry, etc.) have continued to rise, and the cost of chip foundry has also risen, so TSMC has to increase the price of chip foundry.
As of now, there is no more news about the specific extent of TSMC's price increase plan.
But TSMC's largest customer, Apple, has clearly stated that it rejected, which has also put TSMC's price increase plan in an embarrassing situation.
In fact, TSMC's voice has long declined in the face of Apple.
At the beginning of 2022, global chips launched a wave of price increases. TSMC announced at that time that advanced processes with 7nm and below would increase by 10-15%, and mature processes would increase by 20%.
However, facing the strong Apple, the price increase of 10%-20% was directly rejected. After several rounds of fierce negotiations, the price of Apple's A series processors manufactured by TSMC was only raised by about 3%, and the price increase was far lower than that of TSMC's chips to other customers.
. The reason behind this is that Apple has huge chip demand every year, and it is mainly high-end chips. It has always been TSMC's largest customer. Once the order is cut, TSMC's revenue will be severely impacted, so naturally I dare not offend it.
Apple strangled TSMC's "life gate"
At the negotiation table, TSMC has too few bargaining chips.
First of all, TSMC consumes huge amounts of funds to research and develop and expand the advanced process chip production capacity. 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 .
, and TSMC's high-end chip production capacity almost all depends on Apple. At present, 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 processes, and the order volume has reached nearly 150,000 wafer .
Because, before this, TSMC had learned a lesson. In 2015, Apple's iPhone 6s was launched, and it was equipped with an A9 chip. Due to TSMC's forced price increase, Apple transferred most of its orders to Samsung, causing TSMC's capital expenditure of over 10 billion to be wasted.
Secondly, TSMC's revenue and net profit growth are also deeply dependent on Apple. According to data from research firm Digitimes, TSMC's total revenue in 2021 was US$56.8 billion, while sales revenue from Apple reached US$14.8 billion, accounting for nearly 26%.
From the data on TSMC's customer revenue share, it is not difficult to find that MediaTek, AMD, Qualcomm , and Nvidia are all too small, and the total revenue contributed is not as much as Apple. Obviously, TSMC dares not and cannot fail to face Apple's major customers.
In particular, the current global chip cycle has shown signs of peaking, and demand for various chips has begun to decline. Samsung said in September that operating profits for the quarter will stagnate after three quarters of record sales figures.
In addition, JPMorgan revealed that TSMC is being cut by four major customers including MediaTek, Qualcomm, AMD, and Nvidia to cope with the current situation of the decline in the consumer market.
It can be foreseen that TSMC will rely more and more heavily on Apple and its voice will become weaker.
Apple's retreat path
Compared with TSMC's situation, Apple has enough retreat path. Once the negotiations collapse, TSMC refuses to manufacture chips for Apple, and Apple will not face the risk of production interruption. It can give chip orders to chip giants such as Samsung and Microsoft, while Samsung and Microsoft have been fighting for and snatching Apple's chip orders.
In fact, Apple’s consistent strategy for supply chain is to diversify investment and support multiple suppliers.
Take the OEM factory as an example. With the huge production capacity of Foxconn , it was once irreplaceable. Around 2016, Apple asked suppliers to lower their quotations by 20%, but was opposed by Foxconn and threatened Apple that if there is no reasonable profit, it will no longer accept Apple orders.
This is obviously untolerable to Apple. Since then, Apple has begun to intentionally allocate orders to several other major OEM manufacturers such as Heshuo , Luxshare Precision , Wistron , and continue to support various OEM manufacturers.
has developed to this day, Luxshare Precision is continuing to grow and grow. Its OEM products have gradually upgraded from sound, optical and electrical components to AirPods headphones. In 2020, it spent 3.3 billion yuan to acquire two Wistron's subsidiaries, and obtained key iPhone OEM business.
Nowadays, as Luxshare Precision continues to rise, the substitution effect on Foxconn is becoming stronger and stronger. According to the latest media news, Apple handed over all orders for the high-end version of iPhone 14 Pro to Luxshare Precision OEM.
In terms of chip foundry, Apple can completely adopt the same strategy to weaken its dependence on TSMC, which is also one of the risks that TSMC is most worried about.
TSMC "misses" Huawei
Faced with this situation in front of you, TSMC may miss his former old friend Huawei very much.
When Huawei's high-end mobile phones were selling well, the number of high-end chips ordered from TSMC every year was very large, second only to Apple.
Among them, 2019 was the year with the largest shipments of Huawei, contributing 15% of its revenue to TSMC that year, second only to Apple, and almost formed a check and balance with Apple. Moreover, Huawei HiSilicon purchases almost all the chips with the most advanced process.
However, due to some ulterior political reasons in the United States, in 2020, TSMC was forced to remove Huawei HiSilicon from the supply list and ban the supply of chips.
According to the global mobile phone Soc market data report for the second quarter of 2022 released by Counterpoint Research, MediaTek ranks first with a share of 39%, while Qualcomm, Apple, Unigroup Zhanrui and Huawei HiSilicon have 29%, 14%, 11%, 6%, and 0.4% respectively.
Just after the ban was implemented, TSMC Chairman Liu Deyin was still optimistic that if there were no orders for HiSilicon , other customers could fill the vacant production capacity.
Stand at the current point in time, TSMC's management's optimism may be too much.
After losing Huawei, TSMC's lifeline was almost locked by Apple. And this may just be the beginning. TSMC is currently heavily dependent on American companies, including Apple.
According to data from the first quarter of 2022, revenue from North American customers accounted for as much as 64%, and revenue from mainland China continued to decline, falling from 17% in 2020 to 10% in 2021. After
locked the lifeblood of TSMC, the United States began to vigorously focus on its chip strategy.Recently, the United States officially passed the "2022 US Chip and Science Act", providing US$52.7 billion in financial support to the semiconductor industry and providing US chip companies with a 25% investment tax credit of approximately US$24 billion.
, which will further increase Apple's confidence in bargaining. In the future, as Apple's voice becomes more and more powerful, TSMC's future uncertainty will be greater.
The capital market has also begun to worry about this. Since 2022, TSMC's stock has suffered continuous selling. As of the latest closing, its stock price has fallen to US$69.28 per share, with a cumulative decline of 41.5% this year, and the total market value evaporated by US$254.8 billion (approximately RMB 1815.8 billion), compared with the highest point, the cumulative decline is as high as 51%.
