Apple Products Could See 'Noticeable' Price Rises Amid Increased Chip Costs

Apple will need to pay more for the chips in its devices and may pass rising costs on to its customers, according to sources speaking to Nikkei Asia.

tsmc semiconductor chip inspection 678x452
TSMC, Apple's main chip supplier, is in the process of increasing its prices following wider inflation in the industry caused by the global chip supply shortage. The company's planned price rises are said to be the most substantial chip price hikes in a decade.

TSMC's chips were already around 20 percent more expensive than those from its direct rivals, but smaller foundries have ramped up their own prices due to higher material and logistics costs, and TSMC has committed to $100 billion in new investment over the next three years, motivating the company to increase its prices to maintain its premium and pass these added costs on to clients.

TSMC is reportedly also keen to stop its clients from ordering more chips than needed in the hope of securing production line space and additional support from contract chipmakers, which has made it difficult for the company to understand real demand. Clients will need to negotiate specific terms for manufacturing before the price rises officially take effect from October 1.

The company is still working through existing orders, meaning that the impact of the price rises will be felt much more acutely next year when production capacity has expanded and existing orders have been completed. Sources speaking to Nikkei said that chip developers such as Qualcomm will pass TSMC's price increases onto device makers such as Apple. TSMC also supplies Apple directly with the likes of the A14 and M1 chips.

The effect on retail prices for devices such as smartphones and computers is expected to be "noticeable." It is speculated that consumer electronics brands will increase the retail prices of their high-end models next year to offset the impact on mid-range and entry-level devices.

Chip prices are expected to remain high while clients push for smaller fabrication and more advanced chip production processes. Other sources said that the market should correct once demand falls since chipmakers will need to lower prices "to lure more clients and maintain utilization rates."

Late last month, DigiTimes reported that these price rises could hit sooner than expected, with the iPhone 13 lineup being more expensive due to increased chip costs. Even so, it appears that the effect of increased chip prices will not fully impact Apple until next year.

Top Rated Comments

NARadyk Avatar
19 weeks ago
As if they don't already earn enough profit?
Score: 101 Votes (Like | Disagree)
iZac Avatar
19 weeks ago
Didn't this already happen last year with the $100 price hike on the 6.1" along with the removal of the earphones and charging brick?
Score: 51 Votes (Like | Disagree)
jz0309 Avatar
19 weeks ago

Another reason to Stick with Intel on Mac

Plus you get to run the NEW and AWESOME WINDOWS 11

Only 3.8GB in size compared to 12.5GB for macOS Monterey.
Just go buy a PC and be happy
Score: 45 Votes (Like | Disagree)
PJWilkin Avatar
19 weeks ago
Apple either absorbs the costs this year, or a lot of people will not be buying their kit during this years upgrade cycle

I’d like a new iPhone this year, but could easily wait a year if they jack up the prices
Score: 42 Votes (Like | Disagree)
GalileoSeven Avatar
19 weeks ago
Sounds like nothing more than a convenient cover to raise prices & enrich themselves even more
Score: 35 Votes (Like | Disagree)
arefbe Avatar
19 weeks ago
"may pass rising costs on to customers", seriously?
Score: 32 Votes (Like | Disagree)

Related Stories

iPhone 13 Dummy Thumbnail 2

Apple Reportedly Increasing iPhone 13 Prices to Compensate for Increased Chip Production Cost

Thursday August 26, 2021 12:21 am PDT by
Apple is reportedly planning to increase the price of the upcoming iPhone 13 series as a way to compensate for the increased costs of chip production from its leading chip supplier TSMC, according to a report from DigiTimes. According to the report, TSMC is planning to increase the costs of its chip production, impacting several customers, including Apple. TSMC is reportedly looking to...
tsmc semiconductor chip inspection 678x452

Apple Supplier TSMC Readies 2nm Chips for 2024

Wednesday July 28, 2021 9:00 am PDT by
Apple chip supplier TSMC is planning to manufacture chips with a 2nm fabrication process by 2024, according to Nikkei Asia. TSMC plans to build a new factory on 50 acres of land for two-nanometer chips in Hsinchu, Taiwan, scheduled to begin manufacturing operations in 2024. Construction has been cleared to begin in early 2022, with equipment being installed in 2023. For context, if Apple...
tsmc semiconductor chip inspection 678x452

Apple's Chip Partner TSMC to Begin Mass Production of 5nm Chips at New Arizona Factory in 2024

Thursday July 15, 2021 7:56 am PDT by
Apple chip supplier TSMC has confirmed that it will begin mass production operations at its new factory in Arizona in 2024, Nikkei Asia reports. TSMC Chairman Mark Liu announced that the company's $12 billion factory in Phoenix, Arizona, which is currently under construction, will begin mass production in the first quarter of 2024. While the 2024 timeframe had previously been rumored by Bloom...
m3 feature black

Macs With 'M3' Chips Expected to Use TSMC's 3nm Chip Technology With Test Production Reportedly Underway

Thursday December 2, 2021 7:36 am PST by
Apple's chipmaking partner TSMC has kicked off pilot production of chips built on its 3nm process, known as N3, according to Taiwanese supply chain publication DigiTimes. The report, citing unnamed industry sources, claims that TSMC will move the process to volume production by the fourth quarter of 2022 and start shipping 3nm chips to customers like Apple and Intel in the first quarter of...
tsmc semiconductor chip inspection 678x452

Apple Supplier TSMC Says Global Chip Shortage Likely to Last into 2022

Thursday April 15, 2021 2:01 am PDT by
Apple supplier TSMC today said it is doing all it can to increase productivity and alleviate the worldwide chip shortage, but that tight supplies will likely continue into next year (via Reuters). The comments followed a reported 19.4% rise in the Taiwanese firm's first-quarter profit, which beat market expectations, thanks to strong chip demand and a global shift to home working. TSMC...
m3 feature black

TSMC Expected to Begin 3nm Chip Production in Late 2022 Ahead of First M3 Macs

Thursday December 23, 2021 8:36 am PST by
TSMC plans to begin commercial production of chips built on its 3nm process in the fourth quarter of 2022, according to industry sources cited by DigiTimes. The full report has yet to be published, so no additional details are available at this time. Apple is expected to release its first devices with 3nm chips fabricated by TSMC in 2023, including Macs with M3 chips and iPhone 15 models...
3nm apple silicon feature

2022 iPhones and Macs May Feature 3nm Chips

Tuesday August 10, 2021 8:47 am PDT by
The 2022 iPhones and Macs may feature chips built on the 3nm process, as Apple's leading chip supplier, TSMC, is planning to begin mass production for 3nm chips destined for Apple in the second half of next year, according to a preview of an upcoming report by DigiTimes. The paywalled preview of the full report, which will be published tomorrow, reads: TSMC is on track to move its 3nm...
3nm apple silicon feature

Intel Eager to Avoid Clashes With Apple As It Looks to Secure TSMC's 3nm Chip Supply

Friday December 3, 2021 2:20 am PST by
Intel is looking to develop a closer relationship with TSMC, Apple's largest and most important chip supplier, to avoid possible clashes with the Cupertino tech giant over TSMC's 3nm chip production, according to DigiTimes. Yesterday, we reported on TSMC beginning pilot production of its 3nm process that will eventually be used in future Apple silicon Macs. Apple currently uses a 5nm process ...

Popular Stories

AirPods Pro Gen 3 Mock Feature Red

AirPods Pro 2 Could Start a New Accessory Ecosystem

Friday January 14, 2022 2:34 am PST by
Apple's second-generation AirPods Pro could arrive alongside a new series of accessories, recent leaked images suggest. Alleged leaked photos of the next-generation AirPods Pro obtained by MacRumors showed a charging case with a metal loop on the side for attaching a strap. Apple has not used this design for any of its other AirPod models and it is unclear why it would be added in this...
netflix2

Netflix Again Raises Prices for All Plans, 4K Streaming Now $20 Per Month

Friday January 14, 2022 12:46 pm PST by
Netflix today updated the prices for its streaming plans, and all of its offerings are now more expensive. The Basic plan is now priced at $9.99 per month, the Standard plan is priced at $15.49 per month, and the Premium plan is priced at $19.99 per month. The Basic plan is $1 more expensive, up from $8.99 per month. This plan allows users to watch on just one screen at a time, and it limits ...
iPhone 14 Mock pill and hole 16x9 120hz

Analyst: All iPhone 14 Models to Feature 120Hz Displays, 6GB of RAM, and More

Friday January 14, 2022 7:02 am PST by
Apple is rumored to announce four new iPhone 14 models in September, and ahead of time, analyst Jeff Pu has outlined his expectations for the devices. In a research note with Haitong International Securities, obtained by MacRumors, Pu claimed that all iPhone 14 models will feature ProMotion displays, compared to only Pro models currently. ProMotion enables a variable refresh rate up to 120Hz ...
Unlikely Products 2022 Feature

Six Rumored Apple Products You're Unlikely to See This Year

Saturday January 15, 2022 2:06 pm PST by
Much has been said about what consumers could see from Apple in 2022, but the company is also working on a handful of rumored products that aren't expected to be unveiled for at least another 12 months, and in some cases a lot longer. Of course, that's assuming they get released at all. Apple works on many potential products some of which ultimately never see the light of day. With that in...
top stories 20220115

Top Stories: iPhone 14 Pro Rumors, iCloud Private Relay Controversy, iOS 15.2.1 Released, and More

Saturday January 15, 2022 6:00 am PST by
Hole-punch? Pill? Hole-punch and pill? Rumors about what the front camera system on the iPhone 14 Pro will look like are evolving rapidly, and it now appears we might be getting a novel but potentially controversial design later this year. Other major stories this week included some confusion and controversy about iCloud Private Relay being disabled for some T-Mobile customers, increasing...
iPhone 14 Mock pill and hole thumb

ProMotion Now Expected to Remain Exclusive to iPhone 14 Pro Models, Not Expand to Entire Lineup

Sunday January 16, 2022 8:56 am PST by
Continuing the tradition set with the iPhone 13 Pro, only the highest-end iPhone 14 models will feature Apple's ProMotion display technology, according to a respected display analyst. Ross Young, who on multiple occasions has detailed accurate information about Apple's future products, said in a tweet that ProMotion will not be expanded to the entire iPhone 14 lineup and will remain...
iPad Pro Big Ol Logo Orange

Next iPad Pro Might Feature Large Glass Apple Logo to Allow Wireless Charging

Friday January 14, 2022 10:44 am PST by
Bloomberg's Mark Gurman and Debby Wu last year reported that Apple had tested a new iPad Pro with a glass back for wireless charging capabilities. In a recent edition of his newsletter, Gurman said he expects the new iPad Pro to be released in 2022. While the new iPad Pro is still on track to feature wireless charging, 9to5Mac's Filipe Espósito today reported that Apple may have ultimately...
ipad air 4 video

New iPad Air Rumored to Launch This Spring With A15 Chip, 5G, Center Stage Camera, and More

Saturday January 15, 2022 8:05 pm PST by
Apple is planning to release a fifth-generation iPad Air with similar features as the sixth-generation iPad mini, including an A15 Bionic chip, 12-megapixel Ultra Wide front camera with Center Stage support, 5G for cellular models, and Quad-LED True Tone flash, according to Japanese blog Mac Otakara. Citing reliables sources in China, the report claims that the new iPad Air could be...