TSMC board to vote today to build German factory-Handelsblatt

Today, the board of directors of Taiwanese semiconductor manufacturer TSMC (2330. TW) is expected to approve the construction of a factory in the German city of Dresden, with the German government providing 5 billion euros ($5.49 billion) to support the project. 

TSMC, the world's largest contract chipmaker, has been in talks with the German state of Saxony since 2021 about building a fabrication plant, or "fab", in Dresden, and it will operate the factory in a joint venture with partners Bosch(ROBG.UL), Infineon(IFXGn.DE), and NXP(NXPSM.UL).

Apple buys every 3 nm chip that TSMC can make for next-gen iPhones and Macs

TSMC CEO C.C. Wei, left, and Apple CEO Tim Cook in Arizona in December

It's been rumored for several months now that Apple will be using a new 3 nm manufacturing process from Taiwan Semiconductor (TSMC) for its next-generation chips, including M3 series processors for Macs and the A17 Bionic for some next-gen iPhones.

Apple places huge chip orders worth billions of dollars, and in return, TSMC eats the cost of defective processor dies.

Apple was responsible for 23 percent of the $72 billion that TSMC made in 2022, making Apple "by far TSMC's largest customer."   

Reports have been circulating for months that Apple has bought up all of TSMC's 3 nm manufacturing capacity in the short term, and TSMC's 3 nm technology will be exclusive to Apple for "roughly a year" before there will be capacity to allow any other companies to use it.This deal has apparently been in place since Apple started using TSMC's factories back in 2014 for the Apple A8 and the iPhone 6. 

For a time, Apple used multiple sources for its processors, using Samsung-made processors in some iPhones and TSMC-made chips in others.   But all of Apple's chips have been manufactured at TSMC for most of the last decade.

TSMC currently makes most of the high-performance CPUs, GPUs, and SoCs for most of the world's biggest chip companies;   Apple, Nvidia, AMD, and Qualcomm all use TSMC for their most advanced products, and many have switched from competitors like Samsung and GlobalFoundries in the past few years.Even Intel, which for most of its history has only made Intel-designed chips in its own factories, is relying on TSMC's manufacturing for its Arc GPUs and some parts of its upcoming Meteor Lake processors, even as it tries to open its own factories to compete with TSMC for business from other chip designers.

Both Samsung and Intel are either shipping or preparing to ship 3 nm technology, though it's hard to compare processes across different companies—they're all using different underlying technology, and the Intel 3 process used to be called "5 nm," just to give you some idea of how broad and hand-wavy a number like "3 nm" is.  

TSMC has had a lead over its competitors for a few years now, but that can change, and Apple could always threaten to go elsewhere if TSMC won't keep giving Apple favorable terms.