Ming-Chi Kuo: Rumors that TSMC has a backlog of $1 billion worth of Apple chips due to memory shortages are untrue, and relevant orders are planned in advance.

TF International Securities analyst Ming-Chi Kuo stated in a recent research note that recent market rumors claim TSMC, due to tight DRAM supplies, has stockpiled around $10 billion worth of unfinished Apple 2nm processors, delaying their packaging process, citing TSMC’s Q2 earnings call comment that “the increase in inventory days is mainly due to the ramp-up of 2nm mass production” as evidence. However, his industry research shows that Apple’s hardware shipments this year have indeed been cut due to storage supply shortages, but Apple places processor orders with TSMC at least three months in advance, planning production based on available storage supply rather than asking TSMC to mass-produce unfinished processors ahead of time. Kuo noted that this does not mean TSMC does not produce and hold unfinished processors in advance, but if the supply bottleneck is not on TSMC’s end, such actions offer no clear practical benefit, and Apple has little reason to pay extra to request TSMC to do so. Therefore, he believes the scenario of “TSMC stockpiling $10 billion worth of unfinished processors and waiting for storage supplies to arrive for packaging” has not materialized. He further emphasized that TSMC’s Q2 inventory days rise cannot be directly linked to Apple’s unfinished processors. First, TSMC’s inventory days typically increase during the ramp-up of new advanced process mass production in the past; second, TSMC’s inventory includes not only unfinished products but also finished goods, raw materials, components, and spare parts; third, this year’s 2nm clients are not only Apple, but also IC design firms including AMD and MediaTek.