Apple Analyst 'Recent media reports that TSMC is not asking Apple to pay for the cost of defective 3nm chips are different from my understanding. There are two ways that customers buy chips from TSMC: finished goods buy and wafer buy.'
Portfolio Pulse from Benzinga Newsdesk
An analyst has disputed recent media reports claiming that TSMC is not charging Apple for defective 3nm chips. The analyst explains that customers typically buy chips from TSMC in two ways: as finished goods or as wafers. Most customers opt for the latter due to TSMC's high yield rates. However, Apple, which always demands the latest advanced node production services, purchases finished goods. TSMC then incorporates the cost of defective chips into the selling price of each finished chip, which is why the cost of new processors used in iPhones increases every year.

August 09, 2023 | 5:49 pm
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Apple's demand for the latest advanced node production services from TSMC leads to higher costs due to defective chips.
Apple's demand for the latest advanced node production services from TSMC leads to higher costs due to defective chips. This could potentially impact Apple's profit margins.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEUTRAL IMPACT
TSMC incorporates the cost of defective chips into the selling price of each finished chip sold to Apple.
TSMC's practice of incorporating the cost of defective chips into the selling price of each finished chip sold to Apple does not seem to negatively impact its business relationship with Apple.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 100