TAIPEI (Taiwan News) — Analysts believe Intel is unlikely to replace TSMC as Apple’s primary chip supplier in the near future, despite reports that Apple is seeking additional manufacturing partners, per CNA.

The Wall Street Journal reported Friday that Apple and Intel have reached a preliminary agreement for Intel to manufacture some chips for Apple devices. The report said the two companies had been negotiating for more than a year before finalizing an agreement in recent months.

It remains unclear which Apple products Intel would manufacture chips for. Bloomberg also reported last week that Apple held similar discussions with Samsung. Industry analysts in Taiwan said TSMC’s dominance in advanced semiconductor manufacturing makes it difficult for Apple to shift chip production away from the Taiwanese foundry giant.

Liu Pei-chen (劉佩真), an economist at the Taiwan Institute of Economic Research, said TSMC’s fan-out integrated wafer-level packaging technology and chip-on-wafer-on-substrate advanced packaging capabilities are critical to the performance advantages of Apple’s M-series and A-series chips.

Liu said Samsung and Intel still lag behind TSMC in chip yield rates and power efficiency at comparable process nodes, making it difficult to meet Apple’s stringent commercial requirements. She said the long-term technological collaboration between Apple and TSMC has created a level of integration that competitors have struggled to replicate.

“Unless competitors achieve breakthroughs in 2-nanometer process technology or more advanced gate-all-around architecture, TSMC will remain Apple’s preferred foundry partner in the short term to maintain product consistency,” Liu said.

Liu noted that Intel is aggressively promoting its Intel 18A process technology and attempting to attract Apple orders through its foundry business model and support from US government subsidies. Samsung, meanwhile, is attempting to capitalize on its early lead in 2nm gate-all-around process technology.

She added that previous attempts by TSMC competitors to secure advanced chip orders were hindered by high power consumption and unstable production yields during mass production phases, leading to missed opportunities.

Liu said geopolitical considerations and efforts to reduce technological dependence may also be motivating Apple to diversify its supplier base. However, she said TSMC’s stable delivery record and extensive research and development advantages make its market leadership difficult to challenge.

“For Apple, shifting core orders prematurely to alternative suppliers would carry significant supply chain risks,” Liu said. She described Intel and Samsung as serving more as strategic reserve suppliers for Apple rather than immediate replacements for TSMC, per CNA.

Li Fang-kuo (黎方國), chair of President Capital Management, said Apple’s exploration of alternative suppliers is partly driven by overwhelming demand for TSMC’s advanced 2-nanometer production capacity, much of which has reportedly already been reserved by major AI chip clients such as Nvidia.

Li said Apple is seeking secondary suppliers to diversify risk and strengthen its bargaining position, although current market conditions heavily favor TSMC due to limited advanced-node capacity. He said TSMC’s dominant position in cutting-edge manufacturing remains intact as global demand for advanced semiconductor production continues to outpace supply.

Li added that TSMC’s short-term revenue growth will depend on increasing the share of advanced process production and implementing price increases. He said the company is also expected to benefit from future growth as overseas fabrication plants gradually begin operations.

He cautioned investors against overinterpreting reports of Apple potentially shifting some orders away from TSMC.