KGI's Ming-Chi Kuo: Apple makes “last-minute decision” to use TSMC for 30% of A9 chip orders for next iPhone
Apple makes ‘last-minute decision’ to use TSMC for 30% of ‘A9’ chip orders for next iPhone — Facing poor yield rates from chipmaker GlobalFoundries …
Context & Ripple Effects
When Samsung was reported in January as the main chip supplier for the next iPhone, the A9 looked like a single-foundry story. KGI's Ming-Chi Kuo now says a last-minute yield problem at GlobalFoundries pushed Apple to split the order, giving TSMC roughly 30% of A9 production.
That split matters beyond one chip: it set the pattern for a decade in which Apple kept testing second sources but kept drifting back to TSMC — from Chipworks confirming both Samsung and TSMC were shipping A9 chips to the reported defect-cost-sharing deal on 3nm and today's scramble for TSMC capacity against Nvidia.
First-order effects
- TSMC picks up 30% of A9 orders it had not planned on, while GlobalFoundries' poor yield rates directly cost it the volume — Apple's next iPhone ships on two foundry lines instead of one.
Second-order effects
- Samsung, positioned in January as primary supplier, is forced to compete on yield and price rather than rely on incumbency, and GlobalFoundries must fix its process quickly or risk being cut from future Apple nodes entirely.
Third-order effects
- If the pattern holds, each node transition narrows the field further: Apple's sourcing moves from multi-foundry hedging toward dependence on whichever foundry — increasingly TSMC alone — can hit yield targets first.
The trend: Apple's iPhone chip sourcing has spent the decade consolidating around TSMC's process leadership, turning foundry yield performance into the decisive factor in who gets Apple's orders.