Apple Silicon Supply Chain Faces Further Price Hikes

Apple is likely to face further increased chip prices as supplier TSMC contends with additional increased costs, Bloomberg reports.

a15 chip
Japanese chemicals firm Showa Denko K.K. supplies vital chip fabrication materials to TSMC and is now being forced to drastically increase prices on the back of the global chip shortage. Other component makers and material suppliers are making similar moves in the semiconductor industry amid a wider price squeeze.

Showa Denko Chief Financial Officer Hideki Somemiya said "A big theme this year common to all the players in the materials industry is how much cost burden we'd be able to convince customers to share with us. The current market moves require us to ask twice the amount we had previously calculated."

As a key supplier early in the production chain, Showa Denko's price hikes are expected to tighten margins and pressure clients like TSMC to pass on increased costs to their own customers, including Apple. The situation is unlikely to significantly improve until at least 2023, Somemiya told Bloomberg.

In May, Bloomberg reported that TSMC was in the process of warning its customers of a considerable price increase. This came after a hefty 20 percent price hike in 2021, which was said to be the most substantial chip price rise in a decade.

Last year, Nikkei Asia warned that Apple could be forced to pass the increased price of chips onto customers. Apple's flagship iPhone models with 64GB of storage have been priced at $999 since the launch of the ‌iPhone‌ X in 2017 and further price rises have yet to hit the ‌iPhone‌ lineup. This year's iPhone 14 and ‌iPhone 14‌ Max devices are widely expected to retain the same A15 Bionic chip from the iPhone 13 lineup, which may be explained by the ongoing supply chain pressures behind Apple's chips.

Top Rated Comments

ant the ninja Avatar
6 weeks ago
Do you think Apple will be able to afford this? Should we start a GoFundMe?
Score: 29 Votes (Like | Disagree)
izzy0242mr Avatar
6 weeks ago
It won't happen, but everyone who needs a new phone should just buy a gently used iPhone 13 and they'll honestly be set for a good 3-4 years at least.

I've been saying this for years: the smartphone market is plateauing. New models don't really offer that much more over the previous generation, and that statement becomes more true with every new phone.

Plus, buying new contributes directly to bad environmental practices, exploitative labor markets, and corporate greed. Buy used phones from local and individual sellers in your country. Save hundreds of dollars. Take a step toward a better world.
Score: 25 Votes (Like | Disagree)
pavelbure Avatar
6 weeks ago

Do you think Apple will be able to afford this? Should we start a GoFundMe?
I don’t think it’s Apple that will eat this cost increase.
Score: 8 Votes (Like | Disagree)
jonnysods Avatar
6 weeks ago

Do you think Apple will be able to afford this? Should we start a GoFundMe?
Unfortunately we are the gofundthem on this one...
Score: 6 Votes (Like | Disagree)
johannnn Avatar
6 weeks ago

No, but we probably should for ourselves once the prices hit the lineup. Costs are always passed on to the customer.
Or lower quality parts like the M2 MBP SSD.

Either way, if Apple’s parts gets more expensive, we will pay for it somehow. Apple definitely doesn’t want to reduce their margins.
Score: 6 Votes (Like | Disagree)
EugW Avatar
6 weeks ago

Too bad they don't use something that is nearly free, like sand, to make computer chips. Oh wait, they do use silicon from sand. Why are chips so expensive then? Someone is making a lot of money off the increased price of chips.
I wish I could buy steak for the price of its constituent organic and inorganic components.


Or lower quality parts like the M2 MBP SSD.

Either way, if Apple’s parts gets more expensive, we will pay for it somehow. Apple definitely doesn’t want to reduce their margins.
The M2 MBP 256 GB SSD is the same quality part as the M1 (or better). However, it's slower because it's 1 chip instead of 2. The M1 uses 2 x 128 GB chips. The M2 uses 1 x 256 GB chip. These are the same chips that are used in the 512 GB model, except that the 512 GB model uses 2 of them.
Score: 5 Votes (Like | Disagree)

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