Ming-Chi Kuo, a well-known analyst from TF International Securities, took to social media platform X to address recent reports suggesting that Taiwan Semiconductor Manufacturing (TSM) had stockpiled approximately $1 billion worth of Apple's 2nm processors due to a DRAM shortage. He clarified that such a scenario is unlikely given the tightly coordinated supply chain management between Apple (AAPL.US) and Taiwan Semiconductor Manufacturing (TSM.US).

Kuo noted that while Apple has indeed reduced some hardware shipment plans this year due to memory shortages, this does not imply a passive situation where production precedes material availability. Based on his industry investigations, Apple typically plans TSM's processor production at least three months in advance, aligning output with the expected inflow of memory components. This approach follows a "production based on material" principle, rather than having TSM produce large quantities of work-in-progress items that sit as inventory.

Kuo emphasized that there is no evidence of TSM first accumulating $1 billion worth of processor work-in-progress, waiting for memory to arrive before packaging. He pointed out that both TSM and Apple are globally recognized for their top-tier supply chain execution, and under such a long-standing, highly collaborative system, the occurrence of large-scale passive accumulation of semi-finished goods is uncommon.

Additionally, Kuo analyzed inventory data from public sources. In TSM's earnings call for the second quarter of 2026, the company indicated that the increase in inventory days was primarily due to the ramp-up of 2nm production. However, this inventory cannot be directly attributed to Apple's processor work-in-progress for three main reasons. First, TSM's inventory days typically rise during the initial ramp-up phase of advanced process nodes, which is not a phenomenon unique to this year. Second, TSM's inventory definition includes work-in-progress, finished goods, raw materials, consumables, and spare parts. Third, Apple is not TSM's only 2nm customer this year; other chip designers such as AMD and MediaTek have also adopted the 2nm process.

Overall, while the DRAM supply shortage has indeed impacted iPhone shipments to some extent, the mature supply chain collaboration between Apple and TSM is well-equipped to handle such upstream material fluctuations. The likelihood of large-scale accumulation of semi-finished products is extremely low, suggesting that the previous reports may have been exaggerated.