Apple is fighting for TSMC capacity as Nvidia takes center stage

Apple vs. Nvidia at TSMC: “Karma” or Normal Business?

• Some see Apple being outbid by Nvidia as “karma” for years of dominating TSMC capacity; others argue TSMC, not Apple, allocates wafers and simply follows money and risk.
• Several commenters frame Apple as the stable “anchor tenant” whose long-term, high-volume smartphone demand enabled TSMC’s rise, while Nvidia is the high-paying, volatile AI customer.
• Consensus: capacity is effectively auctioned in the short–mid term. If Nvidia pays more, Apple must match or accept older nodes / less capacity.

Fab Economics, Yields, and Binning

• Discussion of why big anchors are valuable: they underwrite multi‑billion‑dollar node ramps and let fabs finance capex.
• Debate over early-node economics: traditionally smaller dies (like phone SoCs) help yields, but AI margins are so high that Nvidia can tolerate poor yields on reticle-sized dies.
• Long thread on binning: both Nvidia and Apple salvage partially defective dies into lower SKUs, though many chips are distinct designs rather than massively cut-down versions.

Is AI Demand Durable?

• One camp believes AI capex is a lasting “infinite sink” for compute; another calls it hype-fueled, VC-subsidized, and notes power and monetization constraints.
• Some argue LLMs already feel plateaued in practical use; others point to a steady stream of research as evidence we’re not near the end.
• This uncertainty is why TSMC is cautious about overbuilding; only Apple reportedly commits to wafers multiple years out.

Suppliers, Fabs, and Vertical Integration

• Apple is criticized as a ruthless buyer that squeezes suppliers; others counter that Nvidia is also notoriously hard to work with.
• Many expect Apple to diversify toward Intel, TI, and US TSMC fabs, but there’s skepticism Apple could or should build its own leading-edge fab given $40–50B+ recurring capex and lost neutrality.
• Trust and IP concerns make some wary of Intel or Samsung as primary fabs for Apple’s core silicon.

Geopolitics and the Taiwan Risk

• Extensive debate on the likelihood and form of a China–Taiwan conflict: invasion vs blockade vs indefinite status quo.
• Points raised: TSMC/ASML “kill switches,” demographic trends in China, US and EU reshoring efforts, and the risk that any conflict would devastate global chip supply regardless of outcome.

Impact on Consumers and Market Structure

• Expectation of higher prices and slower availability for consumer CPUs/GPUs as leading-edge capacity tilts toward data centers.
• Some worry this accelerates centralization of compute in cloud AI clusters and “undemocratizes” hardware, while smartphone performance already exceeds most users’ needs.