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Disappointing to hear about price hikes. Hopefully the increase will be small. But still a long time away.
 
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Apple's iPhone 18 models will adopt TSMC's 2nm manufacturing process for the next-generation A20 chip, which will bring substantial performance and power efficiency improvements to next year's iPhones, but it may also incur significantly more costs that Apple could pass onto the customer.

a20-chip-feature.jpg

The latest corroboration that Apple will use TSMC's 2nm process in next year's iPhone models comes from Weibo-based leaker Digital Chat Station, who has sources in the Chinese supply chain. Industry analysts Ming-Chi Kuo and Jeff Pu have previously claimed as much, so it seems all but confirmed that Apple will adopt the more advanced silicon wafer technology.

In 2023, Apple adopted 3nm chips for its iPhones and Macs, an upgrade over the prior 5nm mode. The switch to 3nm technology brought 20 percent faster GPU speeds, 10 percent faster CPU speed, and a 2x faster Neural Engine to the iPhone, and similar improvements on Macs. The upcoming iPhone 17 series is expected to feature processors made using TSMC's N3P chip technology – an enhanced version of the 3nm process – but 2nm adoption in the iPhone 18 is expected to bring significantly more performance and efficiency gains.

The terms "3nm" and "2nm" describe generations of chip manufacturing technology, each with its own set of design rules and architecture. As these numbers decrease, they generally indicate smaller transistor sizes. Smaller transistors allow more to be packed onto a single chip, typically resulting in increased processing speed and improved power efficiency.

TSMC plans to start manufacturing 2nm chips in late 2025, and Apple is expected to be the first company to receive chips built on the new process. TSMC is building two new facilities to accommodate 2nm chip production, and working on approval for a third. TSMC generally builds new fabs when it needs to increase production capacity to handle significant orders for chips, and TSMC is expanding in a major way for 2nm technology.

However, with Apple expected to be the first major beneficiary of the new process, it is also likely to face significantly increased costs, which could see the iPhone 18 face another round of price hikes on top of possible price increases on this year's iPhone 17 models due to U.S. import tariffs. Apple scored a reprieve from the 145 percent tariff impacting goods imported from China and the 10 percent tariff on goods imported from other countries, but it doesn't sound like that's going to last.

U.S. President Donald Trump is currently working on new semiconductor levies that will likely impact all Apple devices. Trump earlier this week said that no one is "getting off the hook" and there "was no tariff exception." Apple and other tech companies are "just moving to a different tariff bucket," with the 20 percent "Fentanyl Tariffs" still in place, and additional tariffs coming.

Article Link: iPhone 18's Costly 2nm Process Adoption Could Lead to Price Hikes
They always say that, yet the iPhone 16 is still the same price as the base iPhones. For example, the iPhone 15 has the A16 Bionic (4nm), and the iPhone 16 has the A18 Bionic (3nm N3E), which is still a big jump — and they don’t raise the price.


Apple's iPhone 18 models will adopt TSMC's 2nm manufacturing process for the next-generation A20 chip, which will bring substantial performance and power efficiency improvements to next year's iPhones, but it may also incur significantly more costs that Apple could pass onto the customer.

a20-chip-feature.jpg

The latest corroboration that Apple will use TSMC's 2nm process in next year's iPhone models comes from Weibo-based leaker Digital Chat Station, who has sources in the Chinese supply chain. Industry analysts Ming-Chi Kuo and Jeff Pu have previously claimed as much, so it seems all but confirmed that Apple will adopt the more advanced silicon wafer technology.

In 2023, Apple adopted 3nm chips for its iPhones and Macs, an upgrade over the prior 5nm mode. The switch to 3nm technology brought 20 percent faster GPU speeds, 10 percent faster CPU speed, and a 2x faster Neural Engine to the iPhone, and similar improvements on Macs. The upcoming iPhone 17 series is expected to feature processors made using TSMC's N3P chip technology – an enhanced version of the 3nm process – but 2nm adoption in the iPhone 18 is expected to bring significantly more performance and efficiency gains.

The terms "3nm" and "2nm" describe generations of chip manufacturing technology, each with its own set of design rules and architecture. As these numbers decrease, they generally indicate smaller transistor sizes. Smaller transistors allow more to be packed onto a single chip, typically resulting in increased processing speed and improved power efficiency.

TSMC plans to start manufacturing 2nm chips in late 2025, and Apple is expected to be the first company to receive chips built on the new process. TSMC is building two new facilities to accommodate 2nm chip production, and working on approval for a third. TSMC generally builds new fabs when it needs to increase production capacity to handle significant orders for chips, and TSMC is expanding in a major way for 2nm technology.

However, with Apple expected to be the first major beneficiary of the new process, it is also likely to face significantly increased costs, which could see the iPhone 18 face another round of price hikes on top of possible price increases on this year's iPhone 17 models due to U.S. import tariffs. Apple scored a reprieve from the 145 percent tariff impacting goods imported from China and the 10 percent tariff on goods imported from other countries, but it doesn't sound like that's going to last.

U.S. President Donald Trump is currently working on new semiconductor levies that will likely impact all Apple devices. Trump earlier this week said that no one is "getting off the hook" and there "was no tariff exception." Apple and other tech companies are "just moving to a different tariff bucket," with the 20 percent "Fentanyl Tariffs" still in place, and additional tariffs coming.

Article Link: iPhone 18's Costly 2nm Process Adoption Could Lead to Price Hikes
 
It will be a rude awakening if they interpret tariff fears fueled Q1 record sales as an opportunity to raise prices.
 
In Europe especially, the price gap compared to the US is wild — once you add VAT, currency conversion, and local markups, iPhones can feel seriously overpriced. And with every new release pushing higher price points, it’s no surprise that more people are either holding onto their devices longer or switching to alternatives.
It is increasing becoming unviable product outside USA with the prices have been increasing in the last few years. Already, you can only buy its low end models with crippled features or lack of it that too around $800-$1000. No Thanks!
 
It will be a rude awakening if they interpret tariff fears fueled Q1 record sales as an opportunity to raise prices.

Interpret Tariff 'fears' ? The Q1 sales bubble is likely substantially Q2-4 sales pulled forward. That isn't a rational indicator to increase prices. That is more 'sales quarter' shifting, than increasing yearly aggregate demand. [ Apple likely has pretty accurate data on what the average iPhone upgrade cycle is. If lots of folks are buying earlier than usual, that is not a 'good thing' if primary driven by purely external factors 9 non features (or sales offerings) for the phone. Same issue when rising dollar may drive longer upgrade cycles than other locations. It will show up in the data. )

As for 'fears' ...Just because a lion attacked the antelope 5 yards away from you doesn't mean the pride of lions doesn't exist and isn't a real treat.

These contrived tariffs rates have a good chasing some folks out of using US dollars , so the currency exchange rates may subside in some other countries ( take price pressure off the phones/products not produced in USA ... if trade war stays 'USA vs rest of the world' ). Part of iPhone pricing elsewher has been local governments making moves o drive their currency lower. Appears new leadership in USA wants to go down same hole.
 
I would give my view on this but this isn't the Political News Thread.

But I don't see any reason from a technical aspect why Apple should be raising prices simply for making smaller chips.

There are two factors. First, Moore's Law is fading.


Wafer prices are going up. TSMC is not using fab machines that 'print' smaller to get to N2 9 ( the resolution of the ASMl machines). The volume processing rate of the fab machines is going up , but that is largely to run more passes of the same wafer. The multi-patterning is going up. The more 'tricks' have to pile on to get to the lower resolution, the more complex the processing becomes. More complex processing tends to result in higher prices.

Second, in the high performance space most vendors are not using the denser implementations to implement the same stuff only smaller (i.e., produce more dies per wafer. That could offset more expensive wafers. ('cost of wafer' / 'number of working dies you can sell ' if both numerator and denominator get bigger then result could remain close to same). It is more likely though that the die size won't shrink much 9 more AI/npu cores , more cache , more non CPU processors or fixed function logic ).

if wafers get more expensive and number of dies on wafer stays the same , then costs go up.

Similar issues for using more expensive die packaging techniques.

The other issue is bulky AI models that consume more RAM and storage. One tool Apple has used in past is to use lower costs in one component ( e,g, using mature NAND/SSD components to offset more expensive Screen/SoC/etc. ). If all the subcomponents are put under cost pressure ( tariffs raising wide spectrum of costs) then there is no economies of scale offset to lean on.

Also just because Apple is doing their own modem and/or Wi-Fi won't necessarily make it cheaper for end users. Apple shifting from shared R&D costs to internal only isn't necessarily a 'cheaper path.
 
Kinda over this race. Its also said "significant improvements", but day to day I don't notice the difference in a 5 or 3 nm chip. Not in battery life either.
 
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I am actually surprised Apple hasn’t really done this already.

A Cheese Burger at McDonalds went from 1€ to 1,20€ and finally 2,69€ in the last 10 years. I remember getting a Mc Menu with an extra Burger with a coupon for 5,49€ when I was a student, so around 2014. Now it’s 11,99€ and they removed the drink on many coupons!
Yes, iPhones are like dry-fast-food McDonalds. Soon, the Chinese EVs will cost less than overhyped iPhones with Un-AI ;)
 
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