TSMC Locks In Apple's Most Advanced Chip Order Yet — But Can a 2028 Contract Justify Today's Rally?

Shares of TSMC rose 3.3% to $288.15 after Bloomberg reported that Apple will use the chipmaker's cutting-edge 1.4-nanometer manufacturing process for its high-end 2028 iPhones. The deal cements what investors already suspected — that TSMC has no real peer at the frontier of chipmaking — but raises a question: how much of a contract two years away should be priced in today?

Apple Remains TSMC's Most Important Customer — and the Relationship Is Deepening. Apple buys roughly 1.1 million wafers per year from TSMC, accounting for about 10% of total output but 25% of revenues.

Apple will transition from 2nm chips to 1.4nm chips for high-end 2028 iPhones, with TSMC making the majority of A22 Pro chips — though Apple is also considering having Intel make some of them. That Intel hedge signals Apple wants supply-chain insurance, but TSMC's first-mover position on 1.4nm makes it the default choice for the most performance-critical silicon.

Every New Chip Generation Means Higher Prices — and Fatter Margins for TSMC. TSMC's $30,000-per-wafer 2nm price is the steepest single-node cost increase in two decades.

Advanced nodes are rumored to reach up to $45,000 per wafer. That pricing ladder means each generation directly boosts TSMC's revenue per wafer, a powerful lever as analysts forecast advanced nodes will contribute over 75% of TSMC's total revenue during the 2nm ramp.

No Rival Is Close Enough to Matter. TSMC's share of the global foundry market rose to almost 70% in 2025, with $122.54 billion in revenue — up 36.1% year-over-year — from 64.4% share in 2024.

Samsung had said it intended to start 1.4nm manufacturing by 2027, but recent reports indicate it may have slowed progress on next-generation nodes to fix yield problems at older ones. That competitive vacuum lets TSMC dictate terms.

The Catch: This Is a 2028 Revenue Event. TSMC expects its 1.4nm process to enter mass production in 2028.

Compared to its 2nm node, the 1.4nm process promises up to 15% faster performance and over 20% logic density improvement. Impressive engineering — but the revenue won't flow for roughly two years. Investors buying today are effectively betting that TSMC's technology lead is so durable that future contracts deserve a premium now. With shares up 6.3% over the past week, some of that confidence is already in the price.