Apple faces new pressure in the global chip race as artificial intelligence demand tightens manufacturing supply. The company no longer holds its former position as TSMC’s largest customer. Instead, Nvidia now leads chip orders, driven by massive AI processor demand. Consequently, Apple must compete harder for production capacity.
Executives have signaled growing concern over processor availability. During a recent earnings call, CEO Tim Cook downplayed memory shortages but highlighted processor supply as a bigger challenge. Although Apple did not share details, supply chain sources say the company already searches for backup manufacturing options.
Exploring Alternatives Beyond TSMC
Apple has long relied on TSMC to produce its custom silicon. However, limited capacity forces the company to consider rival foundries. Reports suggest Apple may ask other manufacturers to build lower-end processors. Analysts believe this move could apply to standard iPhone models rather than premium devices.
Intel stands out as one possible partner. Apple would not return to Intel-designed chips. Instead, Intel could manufacture Apple’s existing designs. Industry analyst Ming-Chi Kuo predicts Intel might produce a future entry-level M-series chip in the United States by 2027. Still, questions remain about Intel’s capacity and funding.
Samsung also remains part of Apple’s strategy. Apple previously partnered with Samsung to produce early A-series chips. More recently, Apple announced joint research with Samsung at a Texas semiconductor plant. Therefore, Apple appears willing to diversify suppliers again.
Diversification as a Long-Term Strategy
Apple historically avoids relying on a single supplier. Multiple partners help protect production during shortages while encouraging competitive pricing. Because AI demand continues to surge, Apple may accelerate this diversification.
Nvidia’s rapid growth explains the shift in chip priorities. AI hardware currently absorbs enormous manufacturing resources. Even if growth stabilizes, competition for advanced chips will likely stay intense. Meanwhile, iPhone demand remains steady and predictable.
A Strategic Shift, Not a Crisis
Industry observers stress that Apple still commands strong purchasing power. The company may not dominate TSMC output anymore, yet it remains one of the world’s biggest technology buyers. Diversifying chip production reflects strategy rather than panic.
Apple’s move could mark the end of its exclusive relationship with TSMC after more than a decade. However, broader supplier partnerships may strengthen long-term resilience. As the chip landscape evolves, Apple appears determined to adapt instead of waiting for shortages to pass.
