Apple could face higher iPhone production costs as TSMC plans an increase in advanced chip manufacturing prices.
iPhone 17: Taiwan Semiconductor Manufacturing Company (TSMC) has reportedly informed its major clients — including Apple — of an upcoming price hike for its advanced semiconductor fabrication processes under the 5-nanometre (nm) node starting next year. This increase could impact Apple’s production costs for future iPhone models, potentially affecting the company’s profit margins.
TSMC’s Price Hike Could Impact iPhone Production Costs
According to a report shared by tipster yeux1122 on the South Korean platform Naver, citing Taiwanese media and business sources, TSMC has begun notifying customers about the planned cost increase. The company is expected to raise prices for advanced chip fabrication nodes below 5nm by 8 to 10 percent, which is significantly higher than the typical annual rise of 3 to 5 percent seen in the past.
This means that Apple’s current lineup of A-series chips — including the A19 Pro powering the iPhone 17 Pro and iPhone 17 Pro Max — could soon cost more to manufacture. Even the standard iPhone 17 model, equipped with the A19 chip, may be affected by this pricing shift.
Apple’s Next-Generation A20 Chip May See Even Higher Costs
Apple is expected to adopt TSMC’s upcoming 2nm process technology for its next-generation A20 chip, likely to debut with the iPhone 18 series. While the 2nm process promises improved performance and power efficiency, reports suggest it could be up to 50 percent more expensive to produce than the current 3nm node. The higher costs are attributed to new production equipment, increased setup expenses, and initially low yield rates during the early manufacturing phase.
How Much Does Apple Pay for Each iPhone Chip?
As per earlier reports, manufacturing the A18 chip costs Apple around $45 (approximately ₹3,990). The total hardware cost for an iPhone 17 is estimated at $416 (around ₹36,900), while the retail price starts at $799 (roughly ₹71,000).
With TSMC’s reported price increase, Apple may face a higher bill of materials (BoM) for upcoming iPhones, potentially leading to tighter profit margins — unless the company decides to pass on some of the added costs to consumers.
Summary: Chips Getting More Expensive
- TSMC plans to increase chip fabrication prices for nodes under 5nm.
- Apple, one of TSMC’s largest clients, could see 8–10% higher production costs starting next year.
- The future A20 chip based on the 2nm process might be 50% costlier than current 3nm chips.
- Rising chip costs could lead to higher iPhone prices or reduced profit margins for Apple.
As the world’s leading semiconductor manufacturer, TSMC’s pricing decisions have a direct impact on global tech giants like Apple. If these price hikes materialize, the iPhone 18 lineup could mark one of the most expensive generations to produce in Apple’s history.
