Apple CEO Tim Cook Was Unimpressed With Intel’s Chipmaking Services In 2011 Reveals TSMC Founder

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Apple CEO Tim Cook did not hold back when describing Intel’s contract manufacturing division to TSMC founder Dr. Morris Chang when he set up the world’s largest contract chip manufacturer. In his autobiography, Dr. Chang shared his journey of setting up TSMC and landing a meeting with Apple CEO Tim Cook to discuss making chips for the firm. According to the details, Cook was left unimpressed by Intel’s contract manufacturing capabilities, and he shared his opinion with Chang in a meeting that would end up shaping one of the most consequential decisions for the semiconductor industry.

Intel’s Decision To Compete With TSMC For Apple’s Business Led To A Two-Month Negotiation Suspension

TSMC is Apple’s primary contract manufacturer for all processors found in the iPhone, MacBook, iPad and other gadgets. The iPhone is Apple’s biggest product, and while Apple did experiment with a dual-source strategy for its chip requirements with some iPhone models, purported quality problems with Samsung Foundry’s products forced the firm to rely on TSMC as its sole-source for all processor chip requirements.

The close partnership between the two also enables Apple to control the design of not only its smartphone but also its computer processors. The latter has enabled it to shift away from Intel’s chips, as it can secure access to TSMC’s leading-edge manufacturing technologies before any other firm in the world.

TSMC’s founder, Dr. Morris Chang, shared details about his earliest discussion with Apple to initially manufacture chips for the iPhone. The iPhone was Apple’s first mobile gadget to use the A series chips, as other products, such as the iPad, were released later. Apple’s processors for the iPhone, iPod and other products relied on Samsung’s manufacturing until the Apple A8, which powered the iPhone 6 lineup.

The A8, built with the 22-nanometer manufacturing process and launched in 2014, was the first chip to rely on Samsung and TSMC, and since then, TSMC has gradually taken over all of Apple’s chip manufacturing requirements.

In his autobiography, Chang shares how he first met with Apple CEO Tim Cook to land Apple’s processor contract manufacturing orders. According to him, Apple’s chief operating officer, Jeff Williams, played a key role in setting up a meeting between Chang and Cook. Williams and Chang established a connection through Foxconn founder Terry Gou, a cousin of Chang’s wife.

Foxconn is Apple’s primary contract manufacturer for the iPhone and other gadgets. Like TSMC, it has played a key role in allowing Apple to shift its manufacturing overseas and has grown to become one of the biggest firms of its kind in the process.

Chang and Williams had dinner in Taiwan after Gou’s introduction. Chang reveals that in 2011, the Apple COO informed him that the firm was interested in working with Intel as a chip contract manufacturer. This led to a two-week suspension in negotiations between TSMC and Apple for the same orders, and it also led Chang to visit the US to meet with Cook.

According to TSMC’s founder, he and Cook had dinner at Apple’s headquarters, where Cook assured him there was nothing to worry about. He shares that while the Apple CEO did not divulge details about Intel’s costs or yields, he did comment that Intel was not a good original equipment manufacturer.