Apple plans to support Intel as a backup? Guo Ming-Chi exposes a TSMC crisis and Intel 18A-P’s chances to turn things around

Amid the wave of explosive demand for AI chips, TSMC has continued to tilt its advanced process capacity toward high-performance computing (HPC), putting pressure on Apple in scheduling resources for its smartphone processors. In a report released by Guo Mingchi, an analyst at Tianfeng International Securities, it reveals that Apple is systematically cultivating Intel as TSMC’s long-term backup supplier. It also points out that, in this three-way struggle, TSMC is gradually becoming the primary target for hedging operations across the entire semiconductor industry.

Apple places orders for Intel 18A-P, simulating mass production scenarios with an order mix

Guo Mingchi points out that Apple has already started outsourced orders at the Intel 18A-P process node for low-end and older iPhone, iPad, and Mac-series processors, adopting Foveros advanced packaging technology. Notably, in this order mix, iPhones account for about 80%, closely matching the actual sales structure of Apple’s end-user devices. This shows that Apple is not merely conducting symbolic small-scale trial production, but intentionally simulating the real-world scenario of Intel serving as a supplier for the entire product line.

In terms of mass production timeline planning, Apple’s strategy is being advanced in four stages: in 2026, conducting small-scale testing and verification; in 2027, beginning formal ramp-up mass production; in 2028, continuing to expand shipment volumes; and in 2029, it is expected to enter a decline period during generational transition. This arrangement aligns with the technical lifecycle of the 18A-P process, and also reflects Apple’s consistent long-term thinking in supply-chain layout.

(Apple seeks to foster Intel as a backup, while challenges emerge for TSMC’s dominant position in the face of Samsung as a foundry)

Apple’s strategic intent: while holding the leverage, deploy a second supplier in advance

Guo Mingchi points out that the significance of Apple’s move goes far beyond what the industry generally understands as “diversifying to reduce single-source risk.” The key is that Apple clearly judges that TSMC’s advanced process resources will continue to tilt toward AI and high-performance computing customers, and the priority of smartphone processors within TSMC’s customer structure may face disadvantages in the long term. Therefore, Apple chooses to invest and cultivate Intel’s foundry capability in advance at a time when it still has strong bargaining power over TSMC.

He reveals that negotiations between Apple and Intel began even before TSMC’s advanced process capacity started to become tight, indicating that this was not an impulsive decision, but a strategic deployment planned long in advance.

(SK hynix memory tests adopt Intel EMIB technology; TSMC CoWoS capacity shortage is a major cause)

Intel gets a historic opportunity, but success depends on execution strength

For Intel, the strategic meaning of Apple’s order far exceeds financial contribution. Guo Mingchi believes that Apple’s order spans a complete product line, is of sufficient scale, and must dynamically adjust designs and production to respond to market changes—making it a rare “all-around practice opportunity” for Intel’s Integrated Fabless Services (IFS) division.

However, even so, Intel still faces multiple pressures in the near term: the mass production schedule and shipment scale remain unclear; assembly plants have not yet received any shipment scheduling; and the 2027 yield target is only set above 50% to 60%. He believes that even if early shipments go smoothly, TSMC will still maintain steady supply with more than 90% of the market supply share.

Geopolitical developments, Apple’s strategic hedging needs, and Intel’s own transition efforts together have opened a historic window for Intel to rebuild its advanced process foundry business. However, whether this window can truly translate into performance still depends on Intel’s execution strength.

TSMC’s near-term position remains stable, yet it is enabling the industry’s hedging goals

For TSMC, even though it plays a passive role in this three-way struggle, its leading position in the short term is still secure. However, Guo Mingchi also analyzes a deeper concern: TSMC is gradually becoming the common target for hedging operations by parties across the advanced process ecosystem.

The U.S. government pressures it through a series of semiconductor policies. Apple strengthens its negotiation leverage by fostering Intel. Samsung, bolstered by massive memory profit inflows, is also investing in advanced process production. At present, TSMC mainly relies on its continued leading manufacturing execution capabilities, defending its competitive position with the advantage of “execution always outperforms rivals,” and using that as its response strategy.

How can TSMC hedge for itself? Guo Mingchi says this

Guo Mingchi admits that TSMC’s hedging options are structurally constrained at the outset: “The U.S. is both its most important market and technology partner and also the main source of policy pressure. Other potential collaborators cannot effectively play a balancing role. At the corporate strategy level, hedging methods such as diversification, expanding the customer base, and technology licensing are also limited in effect due to TSMC’s absolute leadership position.”

In response, Guo Mingchi recommends that TSMC’s most practical path is to accelerate internal capital accumulation and adopt a more flexible strategy in advanced process pricing: “Incorporate uncertainties from geopolitical risks and reorganization of customer structure into risk pricing, rather than simply maintaining the current pricing model.”

He uses Intel’s outsourced orders as an example to illustrate: when Intel outsources its own products to be manufactured by TSMC to release internal capacity to take on Apple’s orders, TSMC cannot treat it as a normal order; rather, it is an order that hides competitive risk. Therefore, it should receive corresponding risk premium reflected in the order’s pricing and the prioritization in capacity allocation.

This article Apple intends to foster Intel as a backup? Guo Mingchi reveals TSMC’s crisis and Intel 18A-P’s chances to turn things around was first published on LinkedIn News ABMedia.