Apple gets a lucrative 3nm chip deal from TSMC with billions of dollars in benefits

Taiwan’s TSMC has prepared a lucrative 3nm chip deal and Apple is up for grabs with billions of dollars of benefit. Under this deal, the chip manufacturer is ready to bear the cost of defective chipsets and will only charge the iPhone maker for “good processor dies”, says a report from TheInformation.

To explain, chip companies use large silicon wafers to create multiple chips at once. Then, the wafer is then sliced into many individual processor dies.

It’s normal, especially early in the life of an all-new manufacturing process, for many of those dies to end up with defects—either they don’t work at all, or they don’t perform to the specifications of the company that ordered them.

Usually, chip designers (such as Apple) have to pay for each die for whatever the outcome. However, Apple is a big TSMC customer and the chip maker is ready to bear the cost of making defective dies for it. On the other hand, Apple will save billions of dollars on chips from this deal.

Details reveal that nearly 70% of early 3nm dies are usable and the number could go up with improvements in the process technology.

The latest offer from TSMC is the result of Apple’s dominance in its current revenue. It’s said that Apple accounts for 23 percent of the $72 billion that TSMC earned in 2022. Thus, making it the largest TSMC customer.

Another report suggests that Apple could buy all of TSMC’s 3nm production capacity at least for a year before it could even open it for other buyers.

(source – Theinformation, Arstechnica, Macrumors)