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TSMC not shipping Apple due to defective 3nm chipset before introducing iPhone 15 Pro

Chip supplier TSMC has taken the unusual step of not charging Apple for defective 3nm chips prior to the introduction of the iPhone 15 Pro and A17 Bionic chip. the information reports.

TSMC Semiconductor Check Chip 678x452
The ‌iPhone 15 Pro‌ is widely rumored to feature the A17 Bionic chip – the first chip from Apple to be manufactured using the ‌3nm manufacturing process‌. The ‌3nm‌ node allows the transistors to be denser, resulting in better performance and efficiency.

The introduction of updated chip technology such as ‌3nm‌ involves producing a large number of defective chips so that the manufacturing process can be perfected. according to the information, TSMC charges Apple only for “known good blocks”, with no charge for defective chips. This is highly unorthodox, as TSMC customers usually have to pay for the wafer and all of the molds it contains, including any defective ones.

Since Apple’s orders from TSMC are so large, this obviously could justify absorbing the cost of the defective chips. Apple’s willingness to be the supplier’s first customer for new manufacturing helps it pay for the research and development costs of the new nodes, as well as the facilities to manufacture them.

And the volume of Apple’s orders enables TSMC to learn how to optimize and scale a node more quickly during mass production. Once production and productivity issues related to ‌3nm chip manufacturing‌ improve and other customers seek the technology, TSMC can demand higher prices from those customers, as well as charge for defective molds.

to update: According to Apple analyst Ming-Chi Kuo, the informationReport not entirely accurate. Kuo says Apple’s standard deal with TSMC never includes “faulty” chipsets. Apple purchases “finished goods” of expected quality rather than “chip purchasing,” which can include defective chips.

Most chip buyers have a “chip buy” deal with TSMC and must bear the cost of the defective chips, but in the case of TSMC and Apple, TSMC absorbs the cost through the price of the chips.

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