For more than a decade, Apple occupied a uniquely powerful position at the heart of the global technology ecosystem. Its enormous scale allowed it to dominate the supply chain, setting prices, locking in scarce manufacturing capacity, and shaping the long-term plans of suppliers that produced everything from advanced chips to memory, substrates, and packaging. This dominance gave Apple a decisive edge over competitors, ensuring early access to cutting-edge components and reliable production volumes. Today, however, that era is fading as influence shifts toward AI companies and cloud giants.
Industry analysts argue that Apple is no longer the gravitational centre of hardware manufacturing. While the company still sells huge volumes of devices and retains unmatched brand strength, it is no longer the anchor customer for semiconductor fabs, substrate suppliers, or key component makers. Control of the supply chain is crucial because the companies that command the largest orders gain better pricing, priority access, and more predictable delivery schedules. That advantage increasingly belongs to AI-focused firms such as Nvidia and hyperscale cloud providers including Amazon, Microsoft, and Google.
The most visible evidence of this shift is at TSMC, the world’s most important contract chipmaker. TSMC built its reputation by producing cutting-edge processors for iPhones, which gave Apple a major advantage over other consumer electronics companies. That balance has now changed. High-performance computing, largely driven by AI chips for data centres, accounts for roughly 58 percent of TSMC’s revenue, far surpassing smartphone processors. These AI chips power massive server clusters used by cloud providers to train and run models such as ChatGPT. From TSMC’s perspective, AI customers offer rapid growth, strong margins, and deep financial resources, making them more attractive than traditional smartphone clients.
This realignment is rippling through the rest of the supply chain. Memory manufacturers are shifting production capacity away from phones and PCs toward AI data centres that require enormous volumes of DRAM. As a result, memory prices have surged, raising costs for smartphones and putting pressure on device makers’ margins. Nvidia has secured long-term memory supply agreements, strengthening its negotiating position, while smartphone companies, including Apple, face reduced leverage.
Bottlenecks are also emerging in unexpected areas. Shortages of high-end glass cloth, a critical input for advanced chip substrates, have led suppliers to prioritise AI customers willing to pre-pay and commit to multi-year contracts. Apple, which relies on these substrates across most of its products, now competes directly with AI chipmakers for limited supply and has reportedly sent engineers to help smaller suppliers qualify alternative materials. Manufacturing partners are adapting as well. Foxconn, once synonymous with iPhone assembly, now generates more revenue from AI servers than from consumer electronics, with its fastest growth coming from hyperscalers and Nvidia.
Apple remains one of the world’s largest buyers of components, but in a supply chain increasingly shaped by AI, it no longer sets the rules. Pricing power, capacity allocation, and long-term planning are now dictated by AI infrastructure leaders, leaving Apple to navigate a landscape where it is no longer the dominant force.
https://www.businessinsider.com/apple-losing-grip-tech-supply-chain-tsmc-nvidia-foxconn-2026-1