Apple gets itself a sweet deal.
), Apple's massive chip order is worth billions of dollars and is large enough to eat up all of TSMC's 3nm manufacturing capabilities for at least one year, leaving it with no capacity to handle orders from other companies.
This could potentially save the iPhone maker billions of dollars, as TSMC will be responsible for eating the cost of any defective chips that come out of the production process. Reports suggest that roughly 70% of TSMC's current yield of 3nm dies are good, and improvements in manufacturing processes should lead to a further decline in the rate of defective chips in the future.
The announcement also highlights that Apple's orders constituted 23% of TSMC's $72 billion revenue in 2023, making Apple its largest customer. Apple has exclusively relied on TSMC for its chip requirements across its product lineup for nearly a decade. The deal with Apple also means that other major customers, such as Nvidia, AMD, Qualcomm, and even Intel, will need to explore alternative sources for 3nm chips during the exclusivity period.
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