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Why Apple Picked TSMC Over Intel: Founder Morris Chang Reveals

Daniel Nenni

Daniel Nenni

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Jan 30- During an Interview TSMC founder Morris Chang stated the reason why Apple selected his company instead of Intel as its custom chip supplier. In a recent interview with Acquired, Chang remembered a key point in 2011 when Apple seriously considered using Intel for iPhone chips. Tim Cook, who has for a long time enjoyed a strong relationship with Intel for its Mac CPUs, ended up going with TSMC. Intel just doesn't know what they're doing as a foundry,' Cook explained.

New Interview with TSMC founder Morris Chang

We flew to Taiwan to interview TSMC Founder Morris Chang in a rare English interview. In fact, the last long-form video interview we could find was 17 years ago at the Computer History Museum… conducted by the one-and-only Jensen Huang! This episode came about after asking ourselves a version of...
semiwiki.com

According to Chang, Cook explained the decision during a private meeting at Apple's headquarters in March 2011. Chang saw Apple's move to TSMC was because of Intel's inflexibility, and inability to meet customer's needs. Many of Intel's customers shared that frustration, and Intel always went around acting like they were the only guy for microprocessors,' Chang said. Chang said TSMC's success is tied to its ability to respond to customer demands, even the most 'crazy' or 'irrational.'

Since then, TSMC has boomed as Apple's only source of custom chips, and Intel remains hamstrung in bringing such clients. The shift in the tech landscape is often seen as a way to depict the growing gap between the two chipmakers' approaches to customer service and innovation.

This article first appeared on GuruFocus.
 
Why do they have to post such news on Intel's earnings date? PG has already left. What’s the point, given that Intel is TSMC's customer?
 
Daniel Nenni said:
View attachment 2749

Jan 30- During an Interview TSMC founder Morris Chang stated the reason why Apple selected his company instead of Intel as its custom chip supplier. In a recent interview with Acquired, Chang remembered a key point in 2011 when Apple seriously considered using Intel for iPhone chips. Tim Cook, who has for a long time enjoyed a strong relationship with Intel for its Mac CPUs, ended up going with TSMC. Intel just doesn't know what they're doing as a foundry,' Cook explained.

New Interview with TSMC founder Morris Chang

We flew to Taiwan to interview TSMC Founder Morris Chang in a rare English interview. In fact, the last long-form video interview we could find was 17 years ago at the Computer History Museum… conducted by the one-and-only Jensen Huang! This episode came about after asking ourselves a version of...
semiwiki.com

According to Chang, Cook explained the decision during a private meeting at Apple's headquarters in March 2011. Chang saw Apple's move to TSMC was because of Intel's inflexibility, and inability to meet customer's needs. Many of Intel's customers shared that frustration, and Intel always went around acting like they were the only guy for microprocessors,' Chang said. Chang said TSMC's success is tied to its ability to respond to customer demands, even the most 'crazy' or 'irrational.'

Since then, TSMC has boomed as Apple's only source of custom chips, and Intel remains hamstrung in bringing such clients. The shift in the tech landscape is often seen as a way to depict the growing gap between the two chipmakers' approaches to customer service and innovation.

This article first appeared on GuruFocus.
Click to expand...

Many related articles are based on an interview the YouTube channel Acquired did in person with Morris Chang last week in Taipei Taiwan.

@VCT posted a link for this interview earlier this week. Including comments and advertising, it's just a little bit shorter than three hours. It's a very precious and lengthy interview with an important first generation semiconductor practitioner.

 
Agreed. I had to correct the article:

Tim Cook, who has for a long time enjoyed a strong relationship with Apple for its Mac CPUs, ended up going with TSMC.

:ROFLMAO:
 
One of the sad things I learned from the interview is Apple paused their works/negotiations with TSMC for two months in order to discuss with Intel for the iPhone foundry deal proposed by Intel.

It's not the lacking of opportunities for Intel and it's not lacking for trying from the Intel leadership. Somehow Intel just can't grab the golden opportunities that come and go in front of them.
 
hist78 said:
One of the sad things I learned from the interview is Apple paused their works/negotiations with TSMC for two months in order to discuss with Intel for the iPhone foundry deal proposed by Intel.

It's not the lacking of opportunities for Intel and it's not lacking for trying from the Intel leadership. Somehow Intel just can't grab the golden opportunities that come and go in front of them.
Click to expand...

Agreed, in my opinion the Apple foundry deal was Intel's to loose and they did a very nice job of losing it.
 
hist78 said:
One of the sad things I learned from the interview is Apple paused their works/negotiations with TSMC for two months in order to discuss with Intel for the iPhone foundry deal proposed by Intel.

It's not the lacking of opportunities for Intel and it's not lacking for trying from the Intel leadership. Somehow Intel just can't grab the golden opportunities that come and go in front of them.
Click to expand...
wow! that's new to me. no wonder Intel is on the decline.
 
Tony Fadell, the “father of the iPod,” said Intel was never an option for the iPhone due to its power-hungry chips. People exaggerate Intel give up Apple deal.


Monica Chen, a Digital Times reporter, in her latest interview, said she overheard American employees on a flight from San Francisco to Taipei discussing a potential Apple-Intel collaboration. She wrote a headline about it the next day but was mocked as spreading fake news. She later cited Morris Chang’s latest biography, which mentions Intel and Apple, to clear her name.
 
VCT said:
Tony Fadell, the “father of the iPod,” said Intel was never an option for the iPhone due to its power-hungry chips. People exaggerate Intel give up Apple deal.


Monica Chen, a Digital Times reporter, in her latest interview, said she overheard American employees on a flight from San Francisco to Taipei discussing a potential Apple-Intel collaboration. She wrote a headline about it the next day but was mocked as spreading fake news. She later cited Morris Chang’s latest biography, which mentions Intel and Apple, to clear her name.
Click to expand...

Although Intel's products might not be the low power designs, Apple was looking for a foundry to manufacture Apple in-house designed application processors for iPhones. Intel might have good chances to win the contract with its leading edge node technologies.

Morris Chang mentioned that Apple was willing to set 40% gross profit margin for TSMC. I suspect Intel was looking for a gross profit margin much larger than that from Apple.

Along with Intel's leadership position back then and the confidence (some people may call it "arrogance"), Intel didn't have the urgency to win the Apple deal at all.
 
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