TSMC Increases Prices for Apple A16, A17, A18, A19, M3, M4, and M5 Chipsets

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TSMC Alerts Apple and Other Major Clients of Imminent Price Increases

Recent reports indicate that TSMC (Taiwan Semiconductor Manufacturing Company) is planning to implement price increases of approximately 8-10% for its advanced chip fabrication processes next year, impacting clients such as Apple significantly. This adjustment is attributed to TSMC’s escalating capital expenditures on its 2nm node process and overall limited manufacturing capacity.

According to Yeux1122’s Blog, a reliable rumor aggregator, TSMC has officially notified its primary customers about these forthcoming price adjustments, which specifically affect the sub-5nm fabrication processes utilized for Apple’s advanced chips.

Apple’s lineup, including the A16, A17, A18, A19, M3, M4, and M5 chips, all depend on TSMC’s sub-5nm technology. Consequently, any price uptick will directly impact the overall production costs of these custom silicon components.

In September, China Times revealed that Apple’s forthcoming A20 chip, designed to operate on the new 2nm node and anticipated to release with the iPhone 18, could be one of the priciest chips ever included in an iPhone, fueling speculation about the influence of TSMC’s pricing strategy.

The analysis suggests that TSMC’s 2nm node will incur higher costs compared to its existing 3nm technology due to lower production yields and rising operational investments, potentially demanding an average unit price of $280 for each 2nm chip. For perspective, the cost of Apple’s A18 chip, produced using the 3nm process, was reported by DigiTimes to be around $45 per unit, contributing to a total Bill of Materials (BoM) of approximately $416 for the iPhone 16.

While the projected 8-10% price hike is significant, it remains separate from the $280 price point forecasted for the 2nm node chips. This situation underscores the precarious cost landscape Apple may face in the upcoming year, particularly as global demand shifts towards AI technologies, thereby constraining the availability of mobile-centric LPDDR5x memory.

A recent Goldman Sachs report indicated that the tight supply of memory components is already affecting pricing strategies in the smartphone market. For instance, the price of the 8GB+256GB configuration for the Redmi Note 14 has surged to $49, a stark increase that now represents 16% of the device’s retail price, compared to just 10% a year prior.

Additionally, a Samsung-focused analysis has revealed that the costs associated with mobile SoCs have risen by 12% year-over-year, while camera modules have experienced an 8% price hike, and LPDDR5 memory costs have surged by over 16% compared to the previous year.

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