Silicon Symbiosis: How TSMC and Apple Took Over the Smartphone World

When the Apple iPhone set the world ablaze in 2007, few could have predicted just how deeply the seeds it planted would transform the technology landscape or who would rise to supply its most vital parts. Morris Chang, the founder of TSMC, was one of the first to see the looming paradigm shift. By 2010, recognizing smartphones as a “once-in-15-year” opportunity, Chang made it TSMC’s mission to power this global surge.

TSMC was no rookie in mobile chips when the smartphone boom hit. Back in 1998, it began collaborating with Qualcomm on the MSM3000 baseband processor. By 2012, TSMC was producing Qualcomm Snapdragon chipsets on its most advanced 28nm processes, riding the crest of the Android wave. Meanwhile, MediaTek, a rising Taiwan fabless giant, gained ground throughout China by offering complete “turnkey” chip solutions. After acquiring Inprocomm in 2005, MediaTek worked with both major Chinese phone brands as well as countless smaller manufacturers in Shenzhen producing “shanzhai” or mountain bandit phones, to bring handsets to market with unprecedented speed and affordability.

Yet the most coveted prize remained elusive: Apple, the smartphone market leader and a notoriously guarded and demanding customer. Apple launched the iPhone in 2007 with Samsung as its primary chip supplier, but relations between the two companies soured after the Korean giant debuted its Galaxy line of Android handsets in 2009 and became a direct competitor in the smartphone market. By the end of the decade, Apple’s desire for supply chain independence and design control had never been higher.

In November 2010, a pivotal dinner arranged by Foxconn founder Terry Gou brought Apple COO Jeff Williams to Morris Chang’s door. Apple wanted TSMC’s help building the next generation of custom chips on a new, intermediate 20nm process, a “half-node” between the company’s 28nm and upcoming 16nm capabilities. Chang, wary of overextending both resources and capacity, negotiated a deal offering half the requested volume. Apple accepted.

This decision was not without risk. The capital required was staggering, with $10 billion needed for building new fabs to meet Apple’s capacity needs. For a brief moment, Intel attempted to swoop in with its own foundry offer, but Apple CEO Tim Cook ultimately reassured Chang that the Santa Clara giant was not a suitable fit. By 2014, TSMC’s gamble paid off. The A8 chip, built for the iPhone 6 and iPad Air 2, entered full-scale mass production in TSMC’s fabs.

From these beginnings, TSMC’s role grew quickly. Samsung briefly won part of the A9 orders, but TSMC gained exclusivity for the A10 in 2016, thanks in part to its Integrated Fan-Out (InFO) packaging, which created thinner and more power-efficient chips for Apple’s flagship devices. This allowed Apple to deliver lighter, longer-lasting iPhones and set a new industry benchmark.

To meet Apple’s enormous demand, TSMC made heavy investments in boosting capacity, building a $9 billion fab in Tainan in just eleven months in 2016. By 2018, TSMC’s investments specific to Apple soared past $25 billion, supporting Apple’s immense volume and quality requirements. TSMC even tailored its process roadmap to align with Apple’s product launches, rolling out each new node in concert: 16nm for the A9 in 2015, 10nm for the A10 in 2016, and 7nm for the A12 in 2018. At TSMC’s 30th anniversary in 2017, Apple’s Jeff Williams openly hailed the partnership, declaring that TSMC’s execution had provided Apple with unmatched mobile performance and efficiency.

By the time Chang retired in 2018, Apple made up more than a quarter of TSMC’s revenues, providing the stability needed for new fab and R&D outlays that pushed the company far beyond its rivals.

Chang’s successors, Mark Liu and C.C. Wei, built even deeper ties. Successive generations of Apple chips — A12 (7nm FinFET), A14 (5nm), and A17 & M3 (3nm) — were all built at TSMC. The relationship became more highly synergistic: Apple needed TSMC’s process leadership to outpace its competitors, while TSMC benefited from Apple’s vast and predictable demand to optimize its technology faster than any competitor. The partnership extended overseas as well, with Apple using TSMC’s new Arizona fab in 2024.

Morris Chang saw the smartphone moment. Thanks to the partnership he built with Apple, he ensured TSMC would not only seize it but redefine what leadership in technology looks like on a global stage.