Apple’s genius deal will keep iPhone 15 Pro’s 3nm A17 Bionic SoC ahead of rivals

tech.hindustantimes.com:

Among many new updates and features coming to the upcoming iPhone 15 Pro, one, in particular, will make it the world's most powerful smartphone for quite some time. That tag will be given to it by its A17 Bionic chipset which is expected to be a 3nm processor, according to reports. It is expected that the 3nm chipset will give Apple its biggest major performance and efficiency boost in a smartphone since 2020 when the company made a switch from its 7nm chipset to the current 5nm one. On top of that, Apple has struck a genius deal with TSMC that will make the latter its exclusive manufacturer of the chipset for the first year or so. However, the genius of the deal lies in the fact that the cost of any defective chipset manufactured during the process will be borne by TSMC. That may not sound like a big deal, but actually, it is.

According to a report by The Information, Apple's deal with TSMC includes two important clauses; first, the 3nm chipsets will be exclusively made for Apple for its first year (or a little longer, details of the exact duration are not clear), and second, TSMC will pay for any defective chipsets manufactured during the process. This is rumored to save Apple billions in manufacturing while claiming the rights to the most powerful smartphone chipset in the market. Notably, 1 out of 5 chips (at a rate of 70 to 80 percent are faulty and that adds up to a massive number.

If you are wondering how does this help TSMC, then the answer is pretty simple. Apple is the largest customer of TSMC, and with a large enough order size, it will make financial sense for the company to bear the cost of the faulty chips. Further, it also gives the company a chance to work out the kinks of the chipset and become more