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Since Apple's chip partner TSMC wants to increase its prices for chip production in the future, future iPhone models could become significantly more expensive.
At the end of August, reports were documented about Taiwan Semiconductor Manufacturing Co. (TSMC) claiming that the company had informed customers, including Apple, of price increases. Now a report has been published to confirm that the adjustments are now being implemented. TSMC has increased its prices relatively modestly compared to its competitors, who have gradually increased the cost of chip production since the fourth quarter of 2020 due to the global semiconductor crisis. According to Nikkei Asia, the adjustment is one of the largest for the company in a long time. In the report a manager is quoted as saying:
TSMC is willing to negotiate
We are all in a big shock. All of our account managers have to talk to our customers to see if we can renegotiate some of the contracts. We have not seen such a comprehensive price increase from TSMC in over a decade.
The initial report said the price increases include 10 % for 7-nanometer and smaller processes and 20 % for chips made with 16nm and larger nodes. The percentages are negotiable, however, as customers can negotiate their own terms with TSMC before the October 1 launch. The price changes reportedly will not affect existing orders, with the impact expected to be felt next year.
iPhone 14 could become more expensive
TSMC has long been rumored to charge a markup of around 20 percent for its services, significantly higher than its competitors. However, the price increases could also be a way to prevent double-booking, where customers order more chips than they actually need. The increase in this practice has made it difficult for TSMC to determine "true demand," the report states. As a chip partner that has worked with Apple for many years on the A-series and Apple Silicon, and controls more than half of the global foundry market, it is unlikely that Apple will switch to another manufacturer anytime soon. For this reason, observers now believe that a corresponding price increase for the iPhone 14 cannot be ruled out. (Photo by Unsplash / Tyler Lastovich)
