TSMC informed major clients, including Apple, of impending price increases for advanced fabrication processes below 5-nanometers, effective next year.
The leaker yeux1122 detailed this development on the Korean social media site Naver (via MacRumors). Price hikes are anticipated to be between 8% and 10%. This would affect chips like Apple’s A16, A17, A18, A19, M3, M4, M5, and future iterations.
Last month, China Times reported that Apple’s A20 chip, intended for next year’s iPhone models, could see a substantial price increase. The A20 chip is expected to be the first widely available 2-nanometer chip, set to debut in the iPhone 18 lineup next year, forming the basis for subsequent M6-series chips. The three preceding generations of A-series chips utilized TSMC’s 3-nanometer node. The upgrade to 2-nanometer technology promises further performance and efficiency improvements.
TSMC reportedly informed customers, including Apple, to expect pricing at least 50% higher than for 3-nanometer processors. This increase is attributed to high capital expenditure for the new node and a lack of discounting strategies while yields are in early acceptable phases.
The report also stated that suppliers anticipate flagship mobile chips built on the 2-nanometer process will cost around $280 per unit once volume production commences. This would make it the most expensive component in the iPhone, potentially impacting Apple’s profit margins if the increased cost is not transferred to consumers.
A DigiTimes report from last year estimated the A18 chip’s cost at approximately $45. The total hardware bill for a $799 retail model was $416, indicating the chip accounts for roughly 10% of the bill of materials (BOM) cost and about 5–6% of the retail price, excluding logistics and development expenses.
If these component cost rumors are accurate, Apple might limit 2-nanometer chips to select 2026 iPhone models, such as the iPhone 18 Pro and iPhone 18 Pro Max. In September last year, Apple analyst Ming-Chi Kuo cautioned that “due to cost concerns, not all new iPhone 18 models may be equipped with a 2-nanometer processor.”
