Apple Is Likely to be Most Affected by US-China War Due to its Dependency on TSMC

According to a recent article, Apple chipmaker TSMC is under increasing threat from China, and it is questionable whether the Cupertino corporation should have allowed itself to become dependent on one particular business. There are concerns that the likelihood of retaliatory actions against either TSMC or Taiwan will rise significantly if the US aggressively works to impede China’s chip fabrication sector by placing export limits on chipmaking equipment.

TSMC Expects Chinese Retaliation Due to Regional Conflicts

The biggest concern is that China would attack Taiwan due to the weak global response to Russia’s invasion of Ukraine. Security agencies in the US and the UK have warned that this is a serious possibility. Despite this threat, analysts warned the Financial Times that China would likely respond severely to US meddling in its chip manufacturing plans.

As competition between the US and China heats up and the risk of a military conflict over Taiwan increases, Washington is seeking to both cut Beijing off from supplies of key advanced semiconductors and reduce its own dependency on Taiwan for chip supplies.

Both of those objectives potentially undermine TSMC, whose success is built on serving customers in all markets and a on doing so from a cost-efficient cluster of plants almost entirely in Taiwan […]

On the one hand, the US pressures TSMC to move to the US. On the other, it is waging technology war on China, pushing tension to a higher level that puts Taiwan at risk.”

-Financial Times

Both the US and China have been attempting to catch up with TSMC’s sophisticated techniques, which have left US chipmakers in the dust. The US CHIPS Act gives domestic and international chipmakers incentives in the US gives incentives to both domestic and international chipmakers to establish factories there; US Speaker Nancy Pelosi visited TSMC to address this and other issues. China was already incensed by what it perceived as unjust US subsidies, and Pelosi’s visit only worsened it. It replied by interfering with Taiwanese imports to retaliate against businesses like Apple that depend on them. 

Due to its high dependence on TSMC for the manufacturing of its A-series and M-series processors, Apple is more vulnerable than anybody else. It has been reported that TSMC’s Arizona chip manufacturing facility may produce Apple CPUs; however, as of yet, neither the newest chip generations nor anything resembling the scale required for A-series and M-series chips is included in the plans.