Apple probably ends up getting chips only slightly above cost from TSMC. (It pays $18 B a year, which is pretty low for the roughly 400 million phones, watches, tablets, Macs, AppleTV, etc. it sells every year) but it also pays well in advance the costs for building the fabs for those chips. This gave TSMC the scale needed to be the world's leading semiconductor manufacturer, which means it simultaneously has lower costs from economies of scale, as well as more pricing power, from being able to offer leading edge nodes first.
It's not like the Core products that went into Macs - making iPhone chips is a bespoke, ground-up production. It barely makes sense for Apple to insist on using Intel fabs unless they're heavily insecure about outsourcing their supply chain. It makes absolutely no sense at all for Intel to design ARM chips when they don't own an architecture license and would ostensibly only purchase one to make Apple happy. Again, I feel like this entire "lament" is manufactured by Apple fans eager to rewrite history with Apple making generous offers to domestic American businesses. In reality, Apple's endless desire for hardware margins drove them to dictator-states and third-world manufacturing hubs to meet their quota. It's okay for us to pragmatically admit Apple never had any business with Intel, and Intel was right not to convince them otherwise.
> ARM chips when they don't own an architecture license and would ostensibly only purchase one to make Apple happy
They did certainly own one. XScale was a custom core and not licensed from ARM. IIRC pretty much all high-end PDAs used them so it would have been the default/safe choice for Apple had Intel decided not to abandon it.
Is there any information about those terms? Could they really have been worse than whatever deal with Apple has with ARM these days?
The main downside with ARM/XScale is that Intel would be forced to compete with all other manufacturers and wouldn't have been able to charge their monopolistic/oligopolistic margins on their products. Of course Intel being Intel they could have just added enough proprietary extensions to solve that.
> Apple's endless desire for hardware margins drove them to dictator-states and third-world manufacturing hubs to meet their quota
Sure. But Apple wasn't really in a position to do that back in 2005-2007. It took years for them to build that because they could do it iteratively, I doubt Intel would have allowed them as much freedom as Samsung though.
Intel later attempted to bring x86 SoCs to (Android) smartphones (for example the ASUS ZenFone 2 was x86-based), but at that time Arm processors were already quite established in the Android ecosystem, so this attempt was a commercial failure.
See for example https://www.xda-developers.com/what-happened-x86-phones/ for details.
We can argue for or against Intel acquiring an ARM license in an alternate reality, but truth is they don't care. Apple wanted to turn them into something that would never work, and even if they got what they wanted, Apple's current supply-chain squeeze would have obviated any chance of Intel sticking around.
They had an ARM license and they had their own high-end cores that pretty much all PDAs used. In the early 2000s if you wanted a high-end ARM chip Intel was the default choice.
> We can argue for or against Intel acquiring an ARM license in an alternate reality, but truth is they don't care
Well as I said they already had one in our reality and could have easily ended up in the position Qualcomm is now if they played their cards right (well realistically in a better position because Qualcomm historically struggled keeping up with their own core designs and ended up switching to Cortex while Intel had a significant head start).
Except TSMC? It is not like Intel wont have its margin in making a chip for Apple. It will just be much smaller margin, or margins of modern day Fabless Soc Design company. The problem is Intel misjudged the volume, which ultimately meant they also miscalculated the whole OPex and Capex equation. And Intel dont want to do low margin business ( by their standards ).
Most of your statement suggest Intel would have to make a loss in working in Apple. And yet TSMC has been enjoying their ride purely because of Apple.
Intel's margins made sense when they were selling pre-designed x86 CPUs for use in Macs. It expressly does not make sense when a company notorious for loving low margins asks you to design and manufacture a chip you won't be legally allowed to use anywhere else. Again - Intel was absolutely correct to recognize Apple's attempt to cuck them here.
Intel already had an ARM license they had used to create their XScale line.
They decided to sell that line of business off to Broadcom instead of fabbing a chip for Apple.
Later they decided their failure to enter the mobile device market was a big enough error that they burned through about a billion dollars in a failed attempt to push x86 as a viable alternative to ARM for mobile devices.
> Intel was absolutely correct to recognize Apple's attempt to cuck them here.
I see it the other way around. Unless Intel somehow severely fucked it up (not a distinct possibility, just Intel being Intel) Apple would probably be stuck with their chips both on mobile and laptop/desktop to this day.
I just don't buy it. If Intel realized in hindsight that they could price out a competitive chip, why didn't they sell it to Android manufacturers? So much effort goes into making us lament a world where Intel iPhones existed, but I don't even see the appeal. Intel didn't have a vested interest in ARM (an attitude persisting to this day), they weren't going to acquiesce to Apple's desired margins then or now, and Apple would always have the logical opportunity to cut out their chip middleman. It's about as appealing as a shit sundae sat on a trap door.
> That mistake led to a huge missed opportunity.
Again, was it really that huge? After licensing cost to ARM, core design fees and the bulk deals worked out, I can't see Apple allowing Intel room to breathe. From a certain perspective, it almost seems like Intel never had any desire to genuflect for Apple and only signed the Mac deals to proliferate their existing design catalog. I can't say for sure what the financials worked out to be, but considering Mac market share at the time it makes sense why Intel wasn't super motivated. If we could look at a modern iPhone bill-of-materials, I don't think either of us would feel bad for Intel.