A prior report alleged that TSMC was holding roughly $1 billion worth of Apple's A20 Pro chips because of an inadequate supply of DRAM needed for final packaging. Analyst Ming-Chi Kuo has disputed this claim, arguing that Apple and TSMC's supply chains are too tightly coordinated for such a scenario to occur.
Kuo says Apple typically plans its production schedule at least three months in advance, aligning the volume of chips it has TSMC produce with the DRAM supply actually available at the time. He argues Apple would have no financial incentive to pay TSMC to mass-produce the A20 Pro, its first 2nm chip, ahead of schedule if the final packaging step using DRAM could not be completed.
The original report reportedly pointed to comments from TSMC CFO Wendell Huang during the company's Q2 2026 earnings call, in which an increase in inventory days was cited as evidence of stranded Apple wafers. Kuo counters that a temporary rise in inventory days is standard practice whenever TSMC ramps up early mass production of a new node, calling it routine accounting rather than proof of a problem. He notes that Apple is not TSMC's only 2nm customer, with Qualcomm, MediaTek, and AMD also ramping up production on the node, and says that if TSMC were truly facing an operational breakdown, it would be sitting on unpackaged chips from all of these companies for the same DRAM-related reason. Kuo acknowledges that the broader DRAM shortage affecting the industry is real, but says it is not severe enough to cause TSMC to be stuck with a large amount of stranded silicon.
Separately, Liu Pei-chen, Director at the Taiwan Institute of Economic Research, offered another reason TSMC could weather any Apple-related chip glut: the company's revenue mix has shifted heavily toward AI and high-performance computing (HPC) products, which rely on high-bandwidth memory (HBM) rather than the standard DRAM chips facing shortages. According to Liu, TSMC's HPC products accounted for 66% of revenue in Q2 2026, up from 46% in Q4 2024 and 39% in Q3 2022, when smartphone products made up a larger share of revenue.
Liu said that while the memory shortage is outside TSMC's control and could affect production delivery cycles and capital turnover efficiency tied to memory-constrained products, the company can dynamically reallocate production lines toward AI or HPC chips that are less affected by the standard DRAM shortage. The shortage itself has been attributed to memory makers such as Micron and Samsung shifting focus toward higher-priced HBM chips for AI and HPC use, leaving less capacity for the standard DRAM used in consumer electronics.
Kuo's report also references speculation that Apple may be working with Chinese memory maker CXMT to secure alternative DRAM supply and protect against shortage-related disruptions, though this potential arrangement is described as possibly limited to testing given CXMT's limited production capacity.