TSMC under pressure: China threatens Apple's chip source Apfelpatient

Taiwan's intelligence service is warning of targeted attempts by China to poach TSMC employees, steal technology, and interfere in the country's elections. For Apple, this exacerbates an already precarious dependency.

The threat to Apple's main chip manufacturer, TSMC, is intensifying. A new Reuters report describes several parallel strategies China is apparently using to undermine Taiwan's technological lead in semiconductor production. report This follows the revelation that Apple CEO Tim Cook was seeking a secret CIA briefing I only sleep "with one eye open" regarding the situation in Taiwan.

TSMC produces roughly 90 percent of the world's most advanced semiconductors – including all the custom chips Apple develops for iPhone, iPad, and Mac. Without TSMC, Apple's entire product strategy would be impossible. The increasing threats from China therefore affect not only Taiwan, but directly the heart of Apple's hardware ecosystem.

Three levels of threat

Taiwan's National Security Bureau identifies three key attack vectors in its latest report:

First: targeted poaching of TSMC specialists. According to the intelligence service, China is using indirect channels to recruit Taiwanese talent and steal technology. The goal is to acquire key technologies for manufacturing state-of-the-art chips – precisely the know-how that gives TSMC its lead in 2-nanometer and, in the future, 1.4-nanometer processes.

Secondly: massive cyberattacks. In the first quarter of 2026 alone, Taiwan's government network recorded over 170 million attempted intrusions. Although this figure refers to government networks, TSMC is considered an equally likely target of such attacks.

Thirdly: alleged election interference. Taiwanese intelligence does not rule out the possibility that China intends to influence the country's upcoming elections in order to expand intelligence gathering and surveillance.

Why this is relevant for Apple

Apple is more dependent on TSMC than any other technology company. Previously, Apple shared chip production between TSMC and Samsung, but for years now, TSMC has been the sole manufacturer capable of producing Apple's most advanced chips. The A20 chip, manufactured using a 2-nanometer process and intended for the iPhone 18 Pro, is produced exclusively by TSMC.

Apple has responded to this vulnerability and actively supported TSMC's expansion in Arizona. Last year, Tim Cook pledged $100 billion in investments in the US. However, the US factories still lag technologically a generation behind the most advanced manufacturing facilities in Taiwan. A complete relocation of cutting-edge manufacturing is not realistic in the foreseeable future.

At the same time, Apple has lost its leading position as TSMC's largest customer to Nvidia – a consequence of the AI boom, which has massively increased demand for Nvidia's data center chips. While this doesn't change Apple's technological dependence, it may reduce the strategic leverage Apple has with TSMC.

Geopolitics as a business risk

The situation illustrates how closely intertwined economic interests and geopolitical risks are in the semiconductor sector. For Apple, there is currently no alternative to TSMC for manufacturing its most advanced chips – and the threats to Taiwan are increasing rather than decreasing. The CIA's assessment that China could take military action against Taiwan by 2027 remains a possibility. (Image: Shutterstock / IM Imagery)