Apple(s AAPL) is looking to expand its chip suppliers, and turned to Taiwan Semiconductor Manufacturing Co. (TSMC) with a hefty investment offer and request for exclusive access to a product line. According to Bloomberg report Wednesday, TSMC said no. Apple wasn’t alone; Qualcomm went to TSMC as well with a generous offer and was also denied.
According to the report:
Both proposals included investments, each of more than $1 billion, for the world’s largest custom maker of chips to set aside production dedicated to making chips exclusively for them, said the people, who declined to be identified because the details are not public.
Why is Apple shopping around? It could use an alternative to Samsung. Currently iPhone and iPad logic chips are supplied by Samsung; but the relationship between the two competitors and partners is, shall we say, a bit complicated lately. But more important than that is probably Apple landing an exclusive deal so that its chips are always prioritized before any of its competitors. Looking for an alternative doesn’t mean Apple would dump Samsung — Samsung has been very clear it wants to keep Apple’s chip business — but options to ensure its own supply and not being tied to a direct competitor are both good things for Apple to have.
It’s clear TSMC doesn’t want to be beholden to a particular customer or inspire other customers to come asking for exclusive deals. But it’s always surprising to hear a company so deeply invested in the mobile market rebuff the most cash-rich tech company, and also the king of all chip buyers. Apple spends about $28 billion on chips each year, according to IHS iSuppli, and this year is expected to buy almost one of every 10 chips sold in the world.