If Apple is clear about something, it is that it is not going to go through a funnel that does not report profits. It is the most solvent company in the world for a reason, and that something has a lot to do with the cost/benefit ratio. The strategy that it has followed with the 3 nm of taking all TSMC production, exclusively, for 2023 and 2024, is taking its toll on them, since they have already warned that they will need fewer chips, and the rumor about the fact that this ratio has been broken after the new forecasts with the iPhone 15 is martyring TSMCthat for the first time in years the price of chips will drop.
Well yes, everyone has to relax because the euphoria is passing to a third and fourth quarter of the year that looked good, and it is going wrong. There is no longer talk of getting back on track in 2023, there is already talk of 2024, but really, at the heart of the matter, hope is in 2025, but dark clouds are coming in the distance…
Apple puts the brakes on TSMC and the Taiwanese react: it will lower the price of chips
It doesn’t seem to matter too much to Cook’s that TSMC gave them priority and that they are not going to charge them per wafer for defective chips. The performance ratio for each satisfactory unit is breaking, mainly because the volume agreed with TSMC is not going to be able to be fulfilled, that is, Apple needs fewer chips because it expects not to sell as many iPhones.
We have already seen the reasons, but to summarize it in what concerns us, it went from 90 million units forecast in sales to 83 million units, and from there to 77 million today. Sony is partly to blame, TSMC is partly to blame for not being able to guarantee so much chip in a very short time, and to top it off, the user is not willing to go through the hoop of the price increase, no matter how much titanium chassis the new one has. iPhone on duty.
That said, what can TSMC do about Apple’s scare of chip orders?
A trend that is increasing, unfortunately for those in Taiwan
We’re talking about Apple, but we’d really have to start talking about the industry, which has fallen back on forecasts of rising sales and selling the bear’s skin before killing it. The economic situation has not improved, and is not going to improve anytime soon. China marks record numbers in the decline in smartphone salesa country that, if nothing is done, will enter a technical recession at the end of October.
Europe continues to see how interest rates rise, the US does not stop growing, with what this entails in these moments of inflation, in short, it is not the time to buy as such, and the user, strange as it may seem and in many cases, it has been trapped into paying for a well-deserved vacation, that’s for sure.
With this panorama and with news coming from many sources, TSMC has wanted to take the bull by the horns and has opened its hand after many years of non-stop increases. And yes, TSMC will lower the price of the chips. The information coming from Asia confirms this, and goes further.
Do not meet the conditions or do not accept the price drop? So we don’t accept your orders
It turns out that the company had to renegotiate prices with customers downward, where it only asked for one thing: maintain a production volume that complies with regulations. What regulations exactly? is the big question. There is no specific data on what they refer to, but it is the only condition to make a discount on the agreed price. But we will not stay here.
And it is that TSMC customers are afraid. The negotiation of prices has brought tension, and if the commented regulations are not respected it is stated that TSMC will not accept any more orders, not even from Apple, its best customer by far. Is it a deterrent to prevent your customers from going to the competition? Threatening them with it doesn’t seem like the best possible solution, but of course, we don’t know how much the discount is for each customer in particular… We keep reporting.