Apple is the only customer after TSMC’s N3B node. Everyone else wants N3E, which will not be available until next year. N3E has better yields but worse performance, while being easier/cheaper to manufacture. The increase in yields is greater than the loss in performance.
If TSMC didn’t offer terms to make up for the faults of N3B, there’s a very real chance that Apple would have balked and stuck with N4 again. In this case, Apple had a strong hand: without Apple, the entire N3B line would be idle and the capital expenditure to set them up would be wasted. If yields improve enough Apple might stick with N3B in the future, which would save TSMC even more money and allow them to shift back over to a better (for them) pricing model.
Apple had a comparatively strong hand for these negotiations.