Apple’s decade-long reign over the global tech supply chain is ending, as AI giants like Nvidia, Amazon, Microsoft, and Google emerge as the new power brokers in hardware manufacturing. According to Brad Gastwirth, global head of research at Circular Technology, “Apple is no longer the gravitational center of the hardware universe.”
The most dramatic evidence comes from TSMC, the world’s largest chipmaker. In its latest earnings report, TSMC revealed that high-performance computing—dominated by AI chips—now accounts for roughly 58% of revenue, far surpassing smartphone processors that once made Apple TSMC’s anchor client. TSMC CEO C.C. Wei confirmed the financial strength of AI customers, stating he “double-checked their financial status. They are very rich.”
This shift extends throughout the supply chain. Memory chip manufacturers are reallocating capacity away from phones and PCs to serve AI data centers hungry for DRAM (dynamic random access memory). Nvidia has secured long-term memory supply contracts, leaving smartphone makers with diminished negotiating power and driving up memory prices that could squeeze smartphone margins.
Even obscure components reveal the power shift. A shortage of high-end glass cloth—critical for chip substrates used across Apple’s product line—has suppliers prioritizing AI customers who pre-pay and sign multi-year contracts. Apple is now competing with AI chipmakers for limited supply and reportedly sending engineers to help smaller suppliers qualify alternative materials, according to Nikkei.
Foxconn, once synonymous with iPhone assembly, now generates more revenue from AI servers than consumer electronics. Its fastest-growing customers are hyperscalers and Nvidia, not Apple. Gastwirth explained the transformation: “For the past 15 years, Apple’s scale let it dictate component supply, pricing, and roadmaps. That leverage diminishes when suppliers earn higher margins and higher growth from AI customers.”
While Apple remains one of the world’s largest component buyers, it’s learning what it means to be “just another very large customer” in a supply chain increasingly shaped by AI infrastructure demands. The company that once set the pace for the entire industry now finds itself competing for capacity, pricing, and priority with the AI giants building massive data centers to power services like ChatGPT.
Key Quotes
Apple is no longer the gravitational center of the hardware universe. Apple still moves huge volumes and has unmatched brand strength. But the company is no longer the anchor client for fabs, substrate makers, or key component suppliers. That’s a fundamental change.
Brad Gastwirth, global head of research at Circular Technology, describes the seismic shift in tech supply chain power dynamics, highlighting how Apple has lost its position as the industry’s most influential customer despite maintaining massive sales volumes.
They show me the evidence that the AI really helps their business. So they grow their business successfully and see the financial return. So I also double-checked their financial status. They are very rich.
TSMC CEO C.C. Wei explains why the chipmaker is prioritizing AI customers, confirming that cloud giants and AI companies have both the financial resources and proven business models to justify massive chip orders for AI infrastructure.
For the past 15 years, Apple’s scale let it dictate component supply, pricing, and roadmaps. That leverage diminishes when suppliers earn higher margins and higher growth from AI customers than from smartphones.
Brad Gastwirth explains the economic reality driving suppliers to prioritize AI customers over Apple, as AI infrastructure offers better profit margins and faster growth than the smartphone market that Apple dominates.
In the 2010s, Apple set the pace for the supply chain. In the late 2020s, Nvidia, hyperscalers, and AI infrastructure now dictate pricing, allocation, and long‑term capacity planning.
Gastwirth summarizes the generational shift in tech supply chain power, marking the transition from the smartphone era dominated by Apple to the AI era controlled by Nvidia and cloud computing giants.
Our Take
This story reveals how AI infrastructure has become the most strategically important segment in technology, surpassing even the smartphone market that defined the 2010s. The fact that TSMC—Apple’s most critical supplier—now derives 58% of revenue from AI chips represents a tipping point. What’s particularly striking is the willingness of AI customers to lock in long-term contracts and pre-pay for capacity, demonstrating confidence in sustained AI demand that smartphone makers cannot match. This supply chain realignment could create a self-reinforcing cycle: as AI companies secure preferential access to cutting-edge components, they’ll maintain technological advantages that further justify their supply chain priority. Apple’s loss of leverage suggests we’re witnessing not just a product cycle shift, but a fundamental reordering of power in the technology industry where AI infrastructure companies are becoming the new kingmakers.
Why This Matters
This represents a fundamental power shift in the global technology ecosystem with far-reaching implications. For over a decade, Apple’s massive scale gave it unparalleled leverage over suppliers, enabling better pricing, guaranteed capacity, and the ability to shape product roadmaps across the industry. That advantage is now transferring to AI infrastructure companies.
The shift signals that AI infrastructure has become the most lucrative segment in tech hardware, attracting the highest margins and fastest growth. Suppliers naturally follow the money, and AI customers are proving both wealthier and more willing to commit to long-term contracts with premium pricing. This could accelerate AI development while potentially slowing innovation in consumer devices as resources reallocate.
For businesses and consumers, this means AI capabilities will increasingly determine which companies can secure critical components, potentially affecting product availability, pricing, and innovation timelines across the tech industry. The companies controlling AI infrastructure—Nvidia, Amazon, Microsoft, and Google—are consolidating power not just in software and services, but in the fundamental hardware supply chain that underpins all of technology.
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Source: https://www.businessinsider.com/apple-losing-grip-tech-supply-chain-tsmc-nvidia-foxconn-2026-1