Rumors Suggest Apple’s A20 Pro Chip in iPhone 18 Pro and iPhone 18 Pro Max, Expected to Be 70% More Expensive Despite Confusing Price Estimates

TSMC has recently marked a significant achievement, reaching a 60% yield in the trial production of its cutting-edge 2nm process. This advancement suggests that the mass production of wafers using this lithography may occur sooner than anticipated. Notably, Apple is expected to leverage this next-generation technology for its upcoming A20 Pro chip, anticipated to be featured in the iPhone 18 Pro and iPhone 18 Pro Max. However, the integration of such advanced silicon could come at a substantial cost, with reports indicating that the manufacturing expense for the System on Chip (SoC) may increase by as much as 70%. This leads us to reassess the pricing dynamics involved.

Reassessing Costs: A20 Pro’s Projected Pricing

Recent estimates from Economic Daily News suggest that the price of the A20 Pro will rise from $50 to $85, reflecting a striking 70% increase. Yet, this projection raises eyebrows—when was the last time mass-produced next-gen chips were priced so low? To put this into perspective, the A17 Pro, which represents a previous generation, was estimated to cost Apple around $130 per unit, while the A16 Bionic was priced at approximately $110. These figures prompt us to wonder if Apple has negotiated an extraordinary deal with TSMC or if the current estimates are miscalculated.

The Cost of Production: Are Current Estimates Accurate?

Market research from TD Cowen indicates that the A18 Pro, which powers the iPhone 16 Pro Max, carries a production cost of $45. However, many experts believe this figure is misleading. Given that TSMC’s 2nm wafers are projected to cost around $30,000, it seems implausible that the A20 Pro could be produced for the low estimate of $85. While it is acknowledged that future chip prices will rise as manufacturing shifts to more advanced lithography, TSMC is reportedly implementing a strategy known as ‘CyberShuttle’ to mitigate costs.

CyberShuttle: A Game Changer for Chip Production

Set to begin in April of next year, the CyberShuttle technique allows firms like Apple to conduct evaluations of their chips on a shared test wafer, potentially lowering individual expenses. Industry analyst Ming-Chi Kuo has previously indicated that the iPhone 17 lineup will not feature a 2nm A-series chip due to the high costs associated with wafer production. Instead, the iPhone 18 series will be the first to benefit from this technology. Additionally, Kuo notes that not all variants of the iPhone 18 will incorporate the A20 Pro due to its increased pricing. Therefore, it’s prudent to approach the recent pricing estimates with skepticism.

In summary, as we navigate this complex landscape of semiconductor manufacturing, it’s crucial to keep an eye on TSMC’s advancements and Apple’s strategies, as they play a pivotal role in shaping the future of mobile technology.

News Source: Economic Daily News

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