Chipmaker TSMC Reportedly Informs Apple of Further Price Hikes

[tenthousandthings]

The cost to develop the N2 has been the highest in history at nearly $800 million. The wafer is expected to cost an eye watering $30,000 due to its complexity.

For reference, the 1.4 / 1.6 nm node is expected to cost $45,000+ per wafer.

The N2 (2 nm) family includes the A16 (1.6 nm) node, TSMC has described it as N2P with backside power delivery (which they are calling Super Power Rail or SPR).

So if your source (whatever it is) for these prices is accurate, then that’s a big price jump for SPR.

A14 (1.4 nm) also appears to have this two-step approach, with the first generation (A14) said to be without SPR and the second generation (A14P) said to be with SPR. I wonder if there’s a cost difference there as well.

Really doesn’t have much to do with competition, see what I wrote above. The 3rd generation of the N2 node should be better optimized and provide significant better yields and lower costs (plus significant better performance). Because they are becoming so expensive to produce and manufacture, the N2 will likely be with us until 2030 (not without significant advancements) and 1.4 nm / 14A possibly even longer with those platforms costing significantly more.

However, the products those future platforms will allow are the thing of dreams. We will see mind blowing tech by the early 2030s with a bigger technical leap than we have seen in the last 15 years.

By “third generation of the N2 node” do you mean A16? Because you’re right, backside power delivery is a big deal. Or did I miss new information about TSMC’s roadmap?

My guess is the M7 Pro/Max/Ultra tier will be on A16, while M7 itself will be on N2P. Both are currently expected to begin volume production in 2H 2026.

 

[StuBeck]

They do but we don’t know what the terms are.

There could be something in there that allows TSMC to somehow increase prices.

I mean its part of any long term contract. The idea that Apple dictates everything is pretty ridiculous. Its a ridiculous misconception people have that an "ironclad" contract exists that sets prices for years. Its how Apple constantly moves their orders around, and its how these anticipated price increases occur. This is a normal part of business.

 

[TenSeven]

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.

So true. Computers in general are far cheaper than they’ve ever been. My wife bought me a Core 2 Duo MacBook Pro for Christmas in 2008. I later found out that with upgrades to HD and Memory it was almost $3,000!

 

[theapplehead]

Lots of people are commenting saying that pricing wouldn't affect Apple since it's already forecasted in. However, if that's the case, then Apple would have had to perform some sort of buy ahead or LVO to get the same or discounted pricing. Since pricing in this industry is generally quarterly, this will likely affect all future POs Apple places with TSMC. For instance, if a new iPhone or Mac sells particularly well and they need more supply of whichever chip, they will have to pay current contract price for said part. They won't have any sort of special price locked in on that unless of course they purchase a truly massive quantity and TSMC afforded them a discount to compensate. The chip market is really tightening up right now so it's really a supplier's market....

 

[TenSeven]

TSMC is a foreign monopoly operating in the United States. Intel has been ordained as the USA Chipmaker from here on out. Though it’s slowly started to gain momentum it’s rapidly gaining heavy weight backers and momentum. 18A is impressive as a starting point. I could easily see Apple also taking interest given Cooks meetings with Trump, and the subject of ‘America first’ and repatriation no doubt being part of the conversation.

 

[Apple Tangled]

I know nothing about economics, but why are there so many more price increases for computer components nowadays, as opposed to decades ago?

As process nodes advance, it is exponentially more expensive in terms of R&D and CapEx for foundries like TSMC. New technology simply costs more to develop. Not to mention the push to diversify supply chain amid deglobalization, comparative advantage in trade is reduced, so costs go up in general.

 

[Apple Tangled]

TSMC is a foreign monopoly operating in the United States. Intel has been ordained as the USA Chipmaker from here on out. Though it’s slowly started to gain momentum it’s rapidly gaining heavy weight backers and momentum. 18A is impressive as a starting point. I could easily see Apple also taking interest given Cooks meetings with Trump, and the subject of ‘America first’ and repatriation no doubt being part of the conversation.

Intel needs to catch up in process node development first. For now, the realistic situation in terms of chip manufacturing in the US is for TSMC to shift further capacity (not the cutting-edge of course) to plants in Arizona. Apple might also move some suppliers back to the US since supply chain diversification is increasingly important.

 

[Plutonius]

Does that mean less profit margin for Apple ? /S