Apple could be losing its privileged position as the most important customer at TSMC. For a long time, the only rule that governed the relationship between these two giants was that Apple paid the most, so Apple got the best technology and the quickest shipments before anyone else. However, the AI boom has changed the math. TSMC is reportedly ending the special treatment—AKA priority shipment status—that they had with Apple because AI companies are now spending more money on chip production than ever before.
Recent industry leaks suggest that the change in status is already having a tangible impact. TSMC’s CEO, C.C. Wei, reportedly met with Apple executives to negotiate what is being described as the most significant price increase in recent history. Apple’s upcoming A20 and A20 Pro chips will still use the advanced 2nm process. However, they will no longer enjoy the “first-in-line” privileges that the company has relied on for over a decade.
NVIDIA takes over: Apple is no longer the favorite child at TSMC
The reason for this divorce from tradition is simple and familiar in the business world: money. Currently, NVIDIA has overtaken Apple as TSMC’s largest revenue contributor. As the demand for AI hardware reaches unprecedented levels, TSMC is shifting its focus to the clients who are driving its record-breaking profits. For the first time, Apple has to share the spotlight with the giants of the AI world. When we talk about the limited supply of 2nm wafers, this was the natural result.
This new reality is also driving up costs. Industry analysts estimate that the price of a single A20 SoC for the iPhone 18 series could climb to roughly $280. Without its “special” status to shield it from market pressures, Apple is facing the same rising costs as Qualcomm and MediaTek. TSMC is no longer absorbing the risks or offering the secret deals that once gave Apple a massive competitive edge.
TSMC is currently investing over $50 billion this year alone to expand its capacity. But that investment is squarely aimed at the AI boom. It’s unlikely that another phone manufacturer will secure a chip deal with TSMC that includes the priority shipment status removed from Apple—at least in the near future.
Apple still secures a massive amount of production capacity. But today, it no longer dictates the terms of the relationship. Until the hunger for AI chips settles down, the iPhone maker will have to operate as just another high-value customer in an increasingly crowded line.
