News TSMC Reportedly Overpowers Apple in Negotiations Over Price Increases

PlaneInTheSky

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All signs post to a technology crash in the making. TSMC is raising prices to absurd levels due to their monopoly, resulting in ridiculous prices for tech products and tanking sales.

Combine that with a strong $ making iPhone unaffordable to anyone but americans. Apple is in a lot more trouble than they let out.

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tommo1982

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All signs post to a technology crash in the making. TSMC is raising prices to absurd levels due to their monopoly, resulting in ridiculous prices for tech products and tanking sales.

Combine that with a strong $ making iPhone unaffordable to anyone but americans. Apple is in a lot more trouble than they let out.
Recession is a good time to review priorities. It should happen mote often. The economy could be a healthier place. Not gonna happen though. The heavy weights have iron grip on things and nothing will make them release it.
 

JarredWaltonGPU

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Apple needed to be kicked down a peg. Who was it going to go to for its next chips? Samsung? Intel? LOL. TSMC called Apple's bluff. Apple might leave in the future, but only if it can start building its own fabs. (That's a joke. Apple isn't going to make its own fabs.) I don't think anyone currently has something superior to TSMC N5, never mind N4 and N3. Apple literally had no other potential manufacturer unless it wanted to make its next-gen chips worse than the current gen.
 

beckerjr

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. Apple literally had no other potential manufacturer unless it wanted to make its next-gen chips worse than the current gen.
This in a nutshell. Apple has no choice. They need the 'bleeding edge' for manufacturing technology and TSMC is it. Samsung is the only other option and they are behind them. That could change in the future at some point but for now they have to pay up like everybody else.
 

cyrusfox

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Mattzun

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The article mentioned wafer price increases of 3-5 or 6 percent
How is requiring customers to take a price increase BELOW the rate of inflation "Overpowering"

Heck - even average workers are getting 5 percent raises.
If TSMC can't get the same price increases as a worker, they are in trouble

From the headline, you would think they had something significantly above inflation - 20 percent plus.
 

2+2

May 11, 2022
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Apple needed to be kicked down a peg. Who was it going to go to for its next chips? Samsung? Intel? LOL. TSMC called Apple's bluff. Apple might leave in the future, but only if it can start building its own fabs. (That's a joke. Apple isn't going to make its own fabs.) I don't think anyone currently has something superior to TSMC N5, never mind N4 and N3. Apple literally had no other potential manufacturer unless it wanted to make its next-gen chips worse than the current gen.
It is becoming apparent that Taiwan makes the most advanced chips,
that can't be made anywhere else,
and is essential to the Top American tech companies, not just Apple.

This a DISSASTER in the Waiting.
The Hurt that Russia put on the West
by reducing the supply of a few percent of COMMODITY oil and gas,
is nothing compared to the HURT we will feel,
when China halts the supply of these essential chips.

We are so vulnerable, you could make a movie about this.
Oh, they did make a James Bond movie about this.
Cue evil villain that wants to control the world, Xi.
 

spongiemaster

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The article mentioned wafer price increases of 3-5 or 6 percent
How is requiring customers to take a price increase BELOW the rate of inflation "Overpowering"

Heck - even average workers are getting 5 percent raises.
If TSMC can't get the same price increases as a worker, they are in trouble

From the headline, you would think they had something significantly above inflation - 20 percent plus.
Agreed. Based on all the world is ending doom predictions we've heard, 5% seems surprisingly low. How much is that really going to cost Apple per device? $10? Probably less.
 

PlaneInTheSky

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It is becoming apparent that Taiwan makes the most advanced chips.....the HURT we will feel,
when China halts the supply of these essential chips.
And Taiwan is one of the most earthquake prone regions in the world. The last time a major earthquake hit Taiwan, tech stocks plummeted. And that was when Taiwan only had about 30% of the advanced semiconductor market.

Now Taiwan has 90%+ of the advanced semiconductor market...a new major earthquake in Taiwan...which is only a matter of time....will wipe hardware companies relying on TSMC off the face of the planet, their stocks will crash to zero in seconds.

Taiwan has a monopoly on advanced chips, motherboards, GPU, etc. They have a strangehold on tech.

TSMC is also expanding more and more into China, building more and more advanced factories on the mainland.
 
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2+2

May 11, 2022
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And Taiwan is one of the most earthquake prone regions in the world. The last time a major earthquake hit Taiwan, tech stocks plumetted. And that was when Taiwan only had about 30% of the advanced semiconductor market.

Now Taiwan has 90%+ of the advanced semiconductor market...a new major earthquake in Taiwan...which is only a matter of time....will wipe hardware companies relying on TSMC off the face of the planet, their stocks will crash to zero in seconds.

Taiwan has a monopoly on advanced chips, motherboards, GPU, etc. They have a strangehold on tech.

TSMC is also expanding more and more into China, building more and more advanced factories on the mainland.
The West has realized how dangerous their dependence on Taiwan is.
The West is working to build fabs to reduce this.
In the 5 plus years to do this,
China is much more likely to stop the flow than an earthquake.

Regardless, it was very FOOLISH for the West to do this.
It is the false dream of Globalists, that peace will come from interdependent economies.
They fail to acknowledge history is not peaceful.
Aggressive nation leaders will always attempt to wreck peace.
The world is overdue the nature of our history.
 

jasonf2

Distinguished
Apple needed to be kicked down a peg. Who was it going to go to for its next chips? Samsung? Intel? LOL. TSMC called Apple's bluff. Apple might leave in the future, but only if it can start building its own fabs. (That's a joke. Apple isn't going to make its own fabs.) I don't think anyone currently has something superior to TSMC N5, never mind N4 and N3. Apple literally had no other potential manufacturer unless it wanted to make its next-gen chips worse than the current gen.
This is all true at the current state of things. Apple remembers slights almost as well as my wife does though. With the current feature, price lineup, past vendor relationships and their design capabilities (not to mention cash on hand) Apple is more than able to split main chips across the lineup. The Pro models might carry TSMC (or whoever's) latest and greatest while the lesser models fab through someone else. Not at all unheard of and gives a solid reason for consumers to buy up while holding better margin at the bottom volume models (If there is such a thing with Apple). I am not saying that TSMC isn't justified on price increases with the current state of inflation. It just may be pretty poor timing with Intel starting to get into the contract fab business and Samsung losing so much top end to TSMC due to process node performance. It probably wouldn't be a bad hedge for Apple anyway with everything going on with Taiwan right now.
 
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jkflipflop98

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It is becoming apparent that Taiwan makes the most advanced chips,
that can't be made anywhere else,
and is essential to the Top American tech companies, not just Apple.

This a DISSASTER in the Waiting.
The Hurt that Russia put on the West
by reducing the supply of a few percent of COMMODITY oil and gas,
is nothing compared to the HURT we will feel,
when China halts the supply of these essential chips.

We are so vulnerable, you could make a movie about this.
Oh, they did make a James Bond movie about this.
Cue evil villain that wants to control the world, Xi.
Wow seriously need to cool it with the Chicken Little act. The world is not going to collapse when China kills TSMC. They aren't so far in the lead that they're untouchable. So your $1200 smartphone wont run as fast or cool. Oh no. It's the end of humanity.
 

waltc3

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Apple needed to be kicked down a peg. Who was it going to go to for its next chips? Samsung? Intel? LOL. TSMC called Apple's bluff. Apple might leave in the future, but only if it can start building its own fabs. (That's a joke. Apple isn't going to make its own fabs.) I don't think anyone currently has something superior to TSMC N5, never mind N4 and N3. Apple literally had no other potential manufacturer unless it wanted to make its next-gen chips worse than the current gen.
Great post. Apple is the chief price gouger these days and any days, imo. Not to worry, Apple will just pass the increases along, where the Apple faithful will obediently swallow them down...Running your own FAB as a computer OEM like Intel still does and AMD used to do, is not the best of business models today. Apple, AMD and nVidia depend on TSMC as much as TSMC depends on them for its business. That's why I'm delighted that TSMC is moving some of its FAB operations to the US, finally, where the political instability of the CCP situation won't matter so much as it does now. Apple could move much of its production to the US, but it simply doesn't want to, and I think Apple will rue the day it put so many eggs in the CCP. Decades ago, political stability was a huge factor in companies deciding where to build and invest, and I think that today it is once again a growing consideration, fortunately.
 
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shawman123

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TSMC cannot be bulldozed like other Apple suppliers. Apple has no other alternative. Samsung process is significantly inferior to TSMC and intel is not in the picture until their Ribbonfet nodes are ready.
 
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OriginFree

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All signs post to a technology crash in the making. TSMC is raising prices to absurd levels due to their monopoly, resulting in ridiculous prices for tech products and tanking sales.

Combine that with a strong $ making iPhone unaffordable to anyone but americans. Apple is in a lot more trouble than they let out.

Doesn't most of the world, outside of North America, go with Android phones anyways. Even in the US it's only just over 50% for Apple.

Even then Apple's margins are significant (50%+?), so an extra $20-100 US per phone in parts won't cause it to loose market share unless they prefer profit margins over sales.

Additionally,the average cost of phones have been going up, since day 1. Who would have thought, even 10 years ago, that a $2k US phone would sell. But then we have stupid people, paying stupid money for a phone so they can play games and watch other stupid people's homemade videos. So a reboot of reality may be a nice change.
 

JamesJones44

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This in a nutshell. Apple has no choice. They need the 'bleeding edge' for manufacturing technology and TSMC is it. Samsung is the only other option and they are behind them. That could change in the future at some point but for now they have to pay up like everybody else.
*Will change in the future.

In just the last 30 years there have been several different leaders. I have no doubts it will change again, just a question of when.
 
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JamesJones44

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Have you ever looked at the Bill of Materials for an Iphone and seen there insane margins (60-70%). Apple could lower prices but why would/should they? They will still sell them and look at the current IPHONE adoption rate. The cult of mac is strong and I personally know many that will find the money for the newest no matter what.
That's excluding R&D and engineering. Apple's true margins are typically in the mid 30s, still very healthy, but not 60 - 70%. Those are software company margins. You can find this in their earnings reports.
 
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