Apple diversifies as chip prices rise

The electronic components supply chain continues to evolve under AI demand and geopolitical influences. Apple’s reported talks with Intel and Samsung show how even the largest buyers are looking beyond single-source production models. However, just because buyers are diversifying doesn't mean production capacity has increased in the interim.  

Meanwhile, new price increases from NXP and Texas Instruments point to persistent cost pressure across raw materials, labor, energy, logistics, and supplier inputs. Ongoing geopolitical conflicts are tightening supplies across upstream and downstream manufacturing sectors, with no single alternative source enough to satisfy ravenous demand. Another price adjustment for the year could be the tip of the iceberg for 2H26.  

Apple explores broader US chip sourcing

Apple has partnered exclusively with TSMC to produce its flagship processors since 2013 when the Taiwanese giant agreed to manufacture Apple’s A8 chip. As single-source procurement becomes riskier by the day, even the giants are looking to diversify.  

Per a recent Bloomberg report, Apple is now holding discussions with both Intel and Samsung about producing its main device processors in the United States. Apple executives have reportedly held early-stage talks with Intel and visited the Samsung plant under construction in Taylor, Texas, to evaluate it as a potential supplier.  

As of now, no orders or agreements have been finalized. However, the talks alone warrant attention.  

Earlier this year, Apple CEO Tim Cook identified access to advanced-node manufacturing capacity as the primary bottleneck constraining iPhone output. He specifically called out the 3nm process nodes used to fabricate its A-series and M-series SoCs. It’s a complaint echoed by numerous chip buyers as competition for leading-edge fab capacity has reached a new level thanks to demand from AI hyperscalers.  

TSMC has long been Apple’s exclusive manufacturing partner for its in-house processors, and that arrangement has worked thanks to TSMC’s industry leading advanced-node yield and scale.

Today, the industry’s dynamics have shifted. As Nvidia, Google, and other AI-driven hyperscalers compete aggressively for TSMC’s finite capacity, Apple finds itself battling other tech giants for allocation rather than commanding it as the biggest fish in the pond.  

With this in mind, Apple’s reported outreach to Intel and Samsung is still not about replacing TSMC but rather building optionality into its supply chain. Qualifying a new foundry partner for leading-edge SoC production is a multi-year process involving numerous steps and teams. So, it’s likely Apple is simply hedging its bets against increasing competition for advanced-node fab capacity in the years to come.  

There is a geopolitical dimension at play as well. Apple has reportedly set a strategic objective of maintaining at least two suppliers for key components, a move designed to strengthen negotiation leverage and reduce the risk of supply disruptions. Apple's concentrated reliance on TSMC carries heightened risk given ongoing tensions surrounding Taiwan, and shifting even a portion of production to U.S.-based facilities would help mitigate that exposure.  

Partnering with Intel also brings the added benefit of strengthening Apple's relationship with the Trump administration given the U.S. government's equity stake in the chipmaker and reshoring goals.

Yet, neither Intel nor Samsung is a straightforward substitution for TSMC at leading-edge nodes. Intel has been candid about the financial challenges facing its foundry business. Samsung's Texas facility has experienced construction delays that raise questions about its timeline for meeting advanced production requirements.  

However, the conversations themselves reflect a broader procurement logic that the rest of the industry would do well to internalize. Dependency on a single supplier, no matter how capable they are or how large your buying power may be, is a liability.  

New price hikes signal renewed cost pressure

Price volatility at the leading edge has become a norm in the semiconductor industry. What’s harder to swallow, and easier to underestimate, is sustained cost pressure in the mature, high-volume chip categories that are the bulk of global electronics production.  

According to TrendForce, NXP and Texas Instruments are both preparing to implement a second round of price hikes this year. TI is planning increases across multiple product lines, with new pricing set to go into effect in June and July. Distributors cited in a Sina report suggest prices for categories like digital isolators and power management ICs could rise anywhere between 15% and 85%. Notably, given that TI already has two major 2025 price hikes on its books, the latest move is an indicator that underlying cost pressures have not abated.  

NXP’s adjustments are expected to take effect on June 1, 2026, but details on how much of an increase the market might have to absorb are scarce. The chipmaker is attributing its move to market conditions and rising supply chain costs across raw materials, energy, and labor. NXP’s product footprint, spanning automotive, industrial, and embedded processing, means these increases will be felt across a wide swath of end markets already struggling with high prices and tight product availability.  

Of course, NXP and TI aren’t the only chipmakers introducing new price increases. Memory giants Samsung, SK Hynix, and Micron have instituted multiple rounds of significant hikes in response to AI-driven demand. Likewise, STMicroelectronics and Intel have already increased their prices in the first quarter—with more hikes expected in the second half of the year.  

For procurement teams, this wave of upward price adjustment is an uncomfortable reality. It exposes the fact that traditional supplier agreements and single-source relationships were built for a more stable pricing environment. In a market where two, three, or even more, price hikes within a single calendar year are becoming routine, teams that lack visibility into alternative supply will consistently find themselves absorbing costs that better-positioned buyers avoid.

Those that build flexible sourcing networks and monitor price signals early will be better positioned to avoid shortages and maintain production continuity. Working with independent distributors that hold the necessary certifications and maintain broad supplier relationships provides the insight and flexibility needed to stay ahead of the curve.  

Sourceability combination of global supplier access, market intelligence, and procurement support helps customers manage price volatility and delivers the tools to identify competitive alternatives before cost increases disrupt production schedules. When price hikes arrive in waves, that advantage is the difference between quality components reaching your manufacturing lines in time and scrambling to protect them.