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Chipmaker TSMC Reportedly Informs Apple of Further Price Hikes

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Chipmaker TSMC has begun informing major clients like Apple about further price hikes, according to a new report out of Asia.

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The leaker and aggregator known as "yeux1122" outlined the latest news on Korean social media site Naver. TSMC has apparently started notifying major clients of impending price increases for advanced fabrication processes below 5-nanometers. This would include Apple's A16, A17, A18, A19, M3, M4, and M5 chips, as well as any future iterations. The price hikes are expected to be in the range of 8–10% and commence next year.

Last month, the China Times reported that Apple's "A20" chip designed for next year's iPhone models could be considerably more expensive. The A20 chip is likely to be the first widely available 2-nanometer chip, debuting in the iPhone 18 lineup next year and forming the foundation of subsequent M6-series chips. The previous three generations of A-series chips have all been based on TMSC's 3-nanometer node, with the upgrade to 2-nanometer promising further performance and efficiency improvements.

TSMC apparently told customers, presumably including Apple, to expect pricing that is at least 50% higher than 3-nanometer processors. This was attributed to unusually high capital expenditure for the new node and to the lack of discounting strategies while yields are still in their early acceptable phase.

The report further stated that suppliers expect flagship mobile chips built on the 2-nanometer process to carry unit prices around $280 once volume production begins. This would make it the most expensive component in the iPhone and dramatically affect Apple's profit margins, if the increase is not passed on to customers.

A report from DigiTimes last year placed the cost of the A18 chip at around $45, with a total hardware bill of $416 for a model that retailed at $799, implying that the chip represents roughly 10% of bill of materials (BOM) cost and about 5–6% of retail price before logistics and development expenses.

If the component cost rumors are true, Apple could limit 2-nanometer chips to only some 2026 iPhone models, such as the iPhone 18 Pro and iPhone 18 Pro Max. In September last year, Apple analyst Ming-Chi Kuo warned that "due to cost concerns, not all new iPhone 18 models may be equipped with a 2-nanometer processor."

Article Link: Chipmaker TSMC Reportedly Informs Apple of Further Price Hikes
 
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https://www.macrumors.com/2025/11/06/tsmc-informs-apple-of-price-hikes/
Pretty sure Apple forecasted this given they are by far the largest client.

This is part of the reason why Apple is moving to a split launch strategy with iPhone 18 and 18e, arriving 6 months after the 18 Pro and Fold models. Some customers will be paying for those expensive initial yields before the mainstream customers get N2.
 
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No surprise there. Diminishing returns has set in, every performance increase increases cost per unit. More chips per wafer offset that for a long time, but now the need to assemble multiple units in one SOC has cancelled that out too. Or so it appears.
 
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This is why people should be rooting for Samsung, Intel, and other non-TSMC chip foundries to be successful. Both Samsung and Intel offer third party foundry services (though Intel has no notable external customers). If Intel were to again be competitive in manufacturing process with TSMC then Apple could pit Intel against TSMC pricing wise and threaten to have Intel start producing future generations of A, M, and other series chips. (And for the uninitiated this would not mean Apple going back to Intel's x86/x64 chips, it means Intel, or Samsung, would produce Apple's ARM chips on their own process nodes).

Competition is good!
 
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frozencarbonite said:
I know nothing about economics, but why are there so many more price increases for computer components nowadays, as opposed to decades ago?
Click to expand...
Its nothing new, you just forgot about the reports of price increases in the past. In the 90s we used to track fires and flooding in SE Asia to anticipate RAM cost increases.
 
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bradman83 said:
This is why people should be rooting for Samsung, Intel, and other non-TSMC chip foundries to be successful.

Competition is good!
Click to expand...
Competition is good only when the competition… competes! Existing is not enough.

Intel not having external customers isn’t TSMC’s fault. And, an Intel that USED to have a number of external customers that have gone down to no customers is not “competing”. They’re a poorly ran and poorly executing company and “rooting for them” is wasting a root. :)
 
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frozencarbonite said:
I know nothing about economics, but why are there so many more price increases for computer components nowadays, as opposed to decades ago?
Click to expand...
Ultimately it boils down to supply and demand. Scarcity of resources such as rare earth minerals play a role on the supply side. And obviously with the rapid adoption of AI, demand is off the charts.
 
frozencarbonite said:
I know nothing about economics, but why are there so many more price increases for computer components nowadays, as opposed to decades ago?
Click to expand...
What do you mean computer components are expensive? :) I am old enough to remember paying 1200 Euros after company discount for my 2.0 GHz Core2Duo white MacBook in 2006, which would be 1700 Euros in todays money. You can get the MacBook Air M4 for 900 Euros on Amazon right now.
 
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bradman83 said:
This is why people should be rooting for Samsung, Intel, and other non-TSMC chip foundries to be successful. Both Samsung and Intel offer third party foundry services (though Intel has no notable external customers). If Intel were to again be competitive in manufacturing process with TSMC then Apple could pit Intel against TSMC pricing wise and threaten to have Intel start producing future generations of A, M, and other series chips. (And for the uninitiated this would not mean Apple going back to Intel's x86/x64 chips, it means Intel, or Samsung, would produce Apple's ARM chips on their own process nodes).

Competition is good!
Click to expand...
It doesn't work like that on these newer nodes, the offerings of the different foundries are not compatible with each other and would force the design house to have seperate designs for each foundry - and that is not going to happen.
And remember when Apple dual-sourced the A chip years ago from TSMC and Samsung? What a disaster that was...
 
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SBlue1 said:
What do you mean computer components are expensive? :) I am old enough to remember paying 1200 Euros after company discount for my 2.0 GHz Core2Duo white MacBook in 2006, which would be 1700 Euros in todays money. You can get the MacBook Air M4 for 900 Euros on Amazon right now.
Click to expand...
Hard to remember for sure, but I believe I paid in excess of $5.6k for my Mcintosh II in March/Apr 1987
So that would be about $16k USD now.

You get much more per dollar today
 
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