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
22 months ago
Do you think Apple will be able to afford this? Should we start a GoFundMe?
Score: 29 Votes (Like | Disagree)
izzy0242mr Avatar
22 months 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
22 months 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
22 months 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
22 months 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
22 months 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)

Popular Stories

iPhone 16 Camera Lozenge 2 Perspective Gray

Five Key Upgrades Coming to iPhone 16

Friday March 15, 2024 1:45 pm PDT by
The iPhone is Apple's top-selling product, and it gets an update every year. In 2024, we're expecting the iPhone 16 and iPhone 16 Pro lineup, with an arguably more interesting feature set than we got with the iPhone 15 and iPhone 15 Pro. Subscribe to the MacRumors YouTube channel for more videos. Capture Button All four iPhone 16 models are set to get a whole new button, which will be...
When To Expect New iPads Feature 1

Apple to Announce New iPads on March 26, Rumors Claim

Monday March 18, 2024 4:02 am PDT by
Apple is widely expected to release new iPad Air and OLED iPad Pro models in the next few weeks. According to new rumors coming out of Asia, the company will announce its new iPads on Tuesday, March 26. Chinese leaker Instant Digital on Weibo this morning 日发布%23">claimed that the date will see some sort of announcement from Apple related to new iPads, but stopped short of calling it an...
airpods 3 orange

Two New AirPods 4 Models Expected to Launch in September or October

Sunday March 17, 2024 7:56 am PDT by
Apple suppliers will begin production of two new fourth-generation AirPods models in May, according to Bloomberg's Mark Gurman. Based on this production timeframe, he expects the headphones to be released in September or October. Gurman expects both fourth-generation AirPods models to feature a new design with better fit, improved sound quality, and an updated charging case with a USB-C...
iphone se 4 modified flag edges

iPhone SE 4 Expected to Depreciate Heavily

Tuesday March 12, 2024 9:04 am PDT by
Resale value trends suggest the iPhone SE 4 may not hold its value as well as Apple's flagship models, according to SellCell. According to the report, Apple's iPhone SE models have historically depreciated much more rapidly than the company's more premium offerings. The third-generation iPhone SE, which launched in March 2022, experienced a significant drop in resale value, losing 42.6%...
General iOS 17 Feature Orange Purple

iOS 17.4.1 Update for iPhone is Imminent

Monday March 18, 2024 5:27 am PDT by
iOS 17.4.1 and iPadOS 17.4.1 should be released within the next few days, with a build number of 21E235, according to a source with a proven track record. MacRumors previously reported that Apple was internally testing iOS 17.4.1. As a minor update for the iPhone, it will likely address software bugs and/or security vulnerabilities. It is unclear if the update will include any other changes. ...
iOS 17 Passkey With Apple ACCOUNT Feature

'Apple ID' Expected to Change to 'Apple Account' Starting With iOS 18

Sunday March 17, 2024 7:13 am PDT by
MacRumors was first to report that Apple was planning to rebrand "Apple ID" to "Apple Account" across its software platforms and websites like iCloud.com as early as this year, and now Bloomberg's Mark Gurman has corroborated this change. A mockup of the new Apple Account branding In his Power On newsletter today, Gurman said the new "Apple Account" branding will start to be used later this...
M3 iPad Feature 3

New iPads Likely to Begin Shipping in April

Monday March 18, 2024 9:52 am PDT by
Apple's new iPad Pro models with OLED displays will likely begin shipping to customers in April, according to information shared today by Ross Young, CEO of display industry research firm Display Supply Chain Consultants. Bloomberg's Mark Gurman also said the new iPad Pro models might not ship until "deeper" into April in his Power On newsletter on Sunday:I've repeatedly said that new...