TSMC Cannot Meet All of Apple's M1 Chip Order Volume

Apple is expected to outsource production of PC and laptop chips to Samsung Electronics.

Anticipation is growing that Samsung Electronics will produce Apple's semiconductor chips for the first time in approximately five years. Apple is expected to break up with Intel and outsource production of PC and laptop chips to Samsung Electronics.

Apple introduced M1, the first self-developed semiconductor chip for PCs, and three new products powered by M1 on Nov. 10 (local time). The three were MacBook Air and MacBook Pro, both of which are new laptops, and Mac Mini, a compact desktop.

Initially, Apple allocated all of its production of M1 chips to Taiwan's TSMC, the world’s No. 1 foundry company. However, analysts say that Samsung Electronics also has a chance as TSMC is having difficulty meeting the entire order volume that Apple wants. Because Apple's M1 chip is made through a 5-nm process, TSMC and Samsung Electronics are the only companies in the world that can produce the chip.

"Apple's M1 chip order volume accounts for about 25 percent of TSMC's 5-nm production capacity, but TSMC is already using most of its 5-nm production capacity to produce chips for Apple's iPhone 12," said a researcher at NH Investment & Securities. "Most of the order volume that TSMC cannot meet is expected to go to Samsung Electronics' foundry division."

Apple has not given chip production work to Samsung Electronics since five years ago. Although Apple's iPhone chips were made by both Samsung Electronics and TSMC in the past, Apple stopped allocating chip production to Samsung Electronics in 2015, exclusively relying on TSMC. Some analysts say that TSMC's packaging technology was superior to that of Samsung Electronics. Apple also felt uncomfortable about allocating chip production to Samsung Electronics, a smartphone market rival.

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