TSMC Founder Reveals Why Apple Chose Them Over Intel as Custom Chip Supplier

TSMC founder Morris Chang has revealed that Apple CEO Tim Cook rejected Intel as an iPhone chip manufacturing partner in 2011, and told him that "Intel just does not know how to be a foundry."

tsmc founder morris chang
In a new YouTube interview with Acquired, Chang recounts how Apple briefly paused discussions with TSMC in February 2011 when Intel's CEO approached Cook about manufacturing Apple's iPhone chips. At the time, Intel was already supplying processors for Apple's Mac lineup.

Despite the existing relationship, Cook ultimately chose TSMC over Intel after just two months of consideration. According to Chang, Cook's decisive comment about Intel's foundry capabilities came during a private meeting at Apple's headquarters in March 2011.

"I wasn't too worried," Chang said, explaining that TSMC had advantages over Intel in manufacturing capabilities and customer trust. "I knew a lot of Intel's customers in Taiwan, and none of them liked Intel. Intel always acted like they were the only guy for microprocessors."

Chang said that TSMC's success was built on its responsive approach to customer needs. "When the customer asks a lot of things, we have learned to respond to every request," he explained. "Some of them were crazy, some of them were irrational, but we respond to each request courteously. Intel has never done that."

The decision proved pivotal for both companies. TSMC went on to become Apple's exclusive chip manufacturer, producing all Apple silicon chips, including those for iPhone, iPad, and Mac.

Meanwhile, Intel's foundry business struggled for years to gain traction with external customers. Only recently did the company revamp its manufacturing strategy with the establishment of Intel Foundry, set up to produce integrated circuits for external clients. In September 2024, for example, Intel's foundry business secured Amazon’s AWS cloud services unit as a customer for custom AI chips.

Tags: Intel, TSMC

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Top Rated Comments

alexjholland Avatar
23 weeks ago
I feel zero sympathy for Intel reading this.

No matter how big you get — never, ever assume you cannot be disrupted.

14 years ago a bodybuilder in my gym was the Chief Operations Officer for a chip company.

He told me, 'Buy ARM. Apple will build laptops with their chips because Intel cannot go smaller'.

I wish I'd listened to him. ?
Score: 17 Votes (Like | Disagree)
Mac Fly (film) Avatar
23 weeks ago

I feel zero sympathy for Intel reading this.

No matter how big you get — never, ever assume you cannot be disrupted.
Same could be said for Apple, in a way. Apple does too many things and is too distracted which inhibits their ability to make insanely great products now. They should have stayed out of the content business IMO. Big distraction for them, in spite of what others have argued, being a different team and all. Media content is an app and others could have handled that. Too many kinds and not enough sizes. For iPhone, iPad and Mac they should do a budget line in a few sizes and a premium line in a few sizes, and forgo all of the pricing ladder bull. Innovate, don't corporate. Their iPhone and iPad lines will continue to be needlessly confusing.
Score: 15 Votes (Like | Disagree)
MRSugarD Avatar
23 weeks ago
Funny thing is that even Intel lets parts of its latest Core Ultra processors being manufactured by TSMC.
Score: 11 Votes (Like | Disagree)
throAU Avatar
23 weeks ago
intel is cooked.

they managed to win throughout the 70s, 80s and 90s due to their foundry strength and close integration between the chip designers and the foundry - but those days are gone. They're now on an even or even slightly "less than" playing field.

AMD always had competitive or superior designs but the fab technology lead carried intel through the 20th century - but now TSMC ate their lunch and their designs are having to try and stand up on an inferior node and it just shows how weak their stuff is.
Score: 7 Votes (Like | Disagree)
Unregistered 4U Avatar
23 weeks ago

Same could be said for Apple, in a way. Apple does too many things and is too distracted which inhibits their ability to make insanely great products now. They should have stayed out of the content business IMO. Big distraction for them, in spite of what others have argued, being a different team and all. Media content is an app and others could have handled that. Too many kinds and not enough sizes. For iPhone, iPad and Mac they should do a budget line in a few sizes and a premium line in a few sizes, and forgo all of the pricing ladder bull. Innovate, don't corporate. Their iPhone and iPad lines will continue to be an unnecessarily confusing mess.
Not really, Apple’s business doesn’t depend on them being the only solution, just the preferred solution among those with that most desired property of customers, currency. They’re not interested in a budget line because budget lines are for those trying to be PLENTIFUL over PROFITABLE.

They’re more than happy to leave the bargain basement to EVERYONE else because they have no interest in those customers.
Score: 7 Votes (Like | Disagree)
rp2011 Avatar
23 weeks ago
Having a monopoly like Intel and Windows once had gives companies the misguided feeling that they can just coast and focus on milking their customer with the delusion that no one will ever be able to compete with them.
Score: 6 Votes (Like | Disagree)