Apple Reportedly Refuses to Accept TSMC Chip Price Hike

Apple has reportedly refused to accept a price increase from its sole chip supplier, TSMC, according to Economic Daily News.

tsmc semiconductor chip inspection 678x452
The report claims that Apple, the largest customer of TSMC, has rejected the supplier's plans to increase chip prices next year. TSMC has been planning to increase its prices by six to nine percent, depending on the fabrication process.

TSMC's chips were already around 20 percent more expensive compared to those from its direct rivals, but smaller foundries have ramped up their own prices in recent years 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 added costs on to clients.

TSMC was also reportedly keen to stop its clients from canceling orders and 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.

Following negotiations, Apple has apparently refused to accept further price increases. TSMC makes all of Apple's custom silicon chips, but Apple is estimated to make up more than one quarter of TSMC's entire revenue, meaning that the companies are fairly reliant upon each other. An improvement in the semiconductor industry's supply outlook despite inflation is believed to have hardened Apple's refusal to acquiesce to price hikes.

Like many of Apple's suppliers, TSMC has been wrestling with supply chain issues since 2020. Last year, it was speculated that Apple may have to raise device prices to account for substantial chip price rises.

Top Rated Comments

blazerunner Avatar
9 weeks ago
But Apple is ok with price hikes for their own consumers.
Score: 106 Votes (Like | Disagree)
jonnysods Avatar
9 weeks ago
Man if only I could do that at the pump or grocery store.
Score: 65 Votes (Like | Disagree)
HobeSoundDarryl Avatar
9 weeks ago
Imagine if consumers as a group decided that price hikes were unacceptable and "just said no" instead of rolling over and "just paying up"- even scrambling to "be first" at doing so- with some slinging how they are "forced" to pay more.

If inflation is an enemy to all, the best way to quickly wrangle it is for people as a group to decide the money is worth more than the new stuff they want to buy. Stop "just paying" and prices will soon start coming down trying to find a level when consumers will once again trade money for stuff. The harder the crowd clings to their dollars, the faster and greater prices would come down.

If Apple is your hero/God/example, do as Apple does: refuse to pay higher prices.

The vast majority of things money buys is not needed, just wanted. Focus on absolute needs for a while and the want stuff will be buyable for less.
Score: 47 Votes (Like | Disagree)
ssledoux Avatar
9 weeks ago

You can always choose to consume less.
Sure would be awesome if people didn’t have to purchase gas to drive to work, and food to, oh IDK, LIVE.
Score: 30 Votes (Like | Disagree)
applicious84 Avatar
9 weeks ago
.
Score: 27 Votes (Like | Disagree)
Abazigal Avatar
9 weeks ago

But Apple is ok with price hikes for their own consumers.
The two are not mutually exclusive. You raise prices because products either cost more to make, or in this case, to account for currency fluctuation. At the same time, you do your best to manage costs at the component level.

It's just another one of those realities of running a business. It's not sexy, but it's still has to be done at the end of the day, and it needs to be done well.
Score: 16 Votes (Like | Disagree)

Related Stories

tsmc semiconductor chip inspection 678x452

Apple Reportedly Agrees to TSMC Chip Price Hike After Refusing Last Week

Wednesday October 5, 2022 1:12 am PDT by
After refusing a price hike last week from its primary chip supplier, TSMC, Apple has apparently reversed course and accepted the increase in prices set to be applied next year, according to the latest report from Economic Daily News. From January 1, 2023, TSMC plans to raise the price of 8-inch chip wafers by 6 percent, while 12-inch wafers are set to increase by 3 to 5 percent. Economic...
m1 4nm feature2

TSMC's Arizona Plant Will Manufacture 4nm Chips Starting in 2024 at Apple's Request

Wednesday November 30, 2022 9:50 pm PST by
TSMC's $12 billion chip plant currently under construction in Arizona will begin producing 4-nanometer chips as soon as it opens in 2024 thanks to urging from Apple and other companies, according to Bloomberg's Mark Gurman. The plant had originally been planned to start with production of 5-nanometer chips, but with Apple and other companies increasingly looking to source components from the ...
tsmc semiconductor chip inspection 678x452

Apple Chip Supplier TSMC Looking to Build Plant in Singapore to Tackle Shortages

Thursday May 19, 2022 4:51 am PDT by
Apple chip supplier TSMC is exploring the potential of building a new factory in Singapore to help address the global chip shortage, the Wall Street Journal reports. TSMC is Apple's sole chip supplier and is responsible for fabricating all of the company's custom silicon chips, such as the A15 Bionic and the M1. While Apple's chip orders have been prioritized over many other companies,...
tsmc semiconductor chip inspection 678x452

TSMC's Chip Revenue From Apple Predicted to Grow Nearly 25% in 2022 as Apple Silicon Transition Nears Completion

Monday April 25, 2022 4:18 am PDT by
Chip supplier TSMC's Apple business is predicted to grow almost 25 percent this year as the transition to Apple silicon nears completion and the two companies grow closer ties, DigiTimes reports. Apple is said to be expecting shipments of chips for new iPhones and other devices from TSMC in the first half of June, according to sources speaking to DigiTimes. In addition to year-on-year growth ...
3nm apple silicon feature

Apple Supplier TSMC to Produce 3nm Chips at Arizona Plant

Monday November 21, 2022 4:14 am PST by
Apple chip supplier TSMC has plans in place to mass produce next-generation 3-nanometer chips at its $12 billion Arizona facility, according to the Taiwanese company's founder. Speaking to reporters on Monday in Taipei, Morris Chang said the 3-nanometre plant would be located at the same Arizona site as the 5-nanometre plant. "Three-nanometre, TSMC right now has a plan, but it has not been...
tsmc arizona

Apple Chip Supplier TSMC Plans to Build Second $12 Billion Arizona Factory

Wednesday November 9, 2022 1:46 am PST by
Apple chip supplier TSMC plans to build another fabrication plant in Arizona alongside the $12 billion factory it has already committed to in Phoenix, reports The Wall Street Journal. TSMC's topping-out ceremony for its first plant in Arizona The second plant will be located north of Phoenix and investment is expected to be roughly similar to the $12 billion the company committed to in 2020,...
tsmc arizona

Apple Chip Supplier TSMC Celebrates Arizona Factory Nearing Completion

Friday July 29, 2022 3:18 am PDT by
Apple chip supplier TSMC recently hosted a topping-out ceremony for its new fabrication plant in Phoenix, Arizona, DigiTimes reports. TSMC's topping-out ceremony in Arizona The $12 billion factory will be the first of its kind to mass-produce 5nm chips in the United States. All of Apple's latest chips, dating back to the A14 Bionic and M1 chip, are fabricated with a 5nm process. In a post on...
A16 iPhone 14 Pro

Apple to Source Chips From Arizona Starting in 2024

Tuesday November 15, 2022 2:23 pm PST by
Apple plans to begin sourcing some of its chips from a plant in Arizona, according to a report from Bloomberg. Apple CEO Tim Cook revealed the information in a meeting with engineering employees in Germany back when he was touring Europe. "We've already made a decision to be buying out of a plant in Arizona, and this plant in Arizona starts up in '24, so we've got about two years ahead of us...

Popular Stories

applefifthavenue

Man Robbed After Buying 300 iPhones From Apple Fifth Avenue

Tuesday November 29, 2022 11:54 am PST by
An unnamed 27-year-old man who purchased 300 iPhones from Apple Fifth Avenue on Monday morning was robbed shortly after leaving the store, according to 1010Wins Radio in New York. He was carrying 300 iPhone 13s in three bags and walking to his car at 1:45 a.m. when another car pulled up next to him. Two men jumped out and demanded that he hand over the bags. Not wanting to hand over 300...
iOS 16

Apple Releases iOS 16.1.2 With Carrier Improvements and Crash Detection Optimizations

Wednesday November 30, 2022 10:09 am PST by
Apple today released iOS 16.1.2, another minor bug fix update that comes one week after the release of iOS 16.1.1 and three weeks after the launch of iOS 16.1, an update that added support for iCloud Shared Photo Library, Matter, Live Activities, and more. The iOS 16.1.2 update can be downloaded on eligible iPhones over-the-air by going to Settings > General > Software Update. According...
app store awards 2021

Apple Announces 2022 App Store Award Winners, Highlighting Best Apps of the Year

Tuesday November 29, 2022 3:10 am PST by
Apple today announced its 2022 App Store Award winners, highlighting the 16 best apps and games selected by Apple's global App Store editorial team. The top apps were chosen by Apple for their quality, innovative technology, creative design, positive cultural impact, and ability to deliver "exceptional experiences." Apple CEO Tim Cook said: This year's App Store Award winners reimagined...
14 vs 16 inch mbp m2 pro and max feature 1

'M2 Max' Geekbench Scores Leak Online, Revealing Rumored Specs and Performance

Wednesday November 30, 2022 2:39 am PST by
Geekbench scores allegedly for the upcoming "M2 Max" chip have surfaced online, offering a closer look at the performance levels and specific details of the forthcoming Apple silicon processor. The Geekbench results, first spotted on Twitter, are for a Mac configuration of with the M2 Max chip, a 12-core CPU, and 96GB of memory. The Mac listed has an identifier "Mac14,6," which could be...
eufy camera

Anker's Eufy Cameras Caught Uploading Content to the Cloud Without User Consent [Updated]

Tuesday November 29, 2022 1:01 pm PST by
Anker's popular Eufy-branded security cameras appear to be sending some data to the cloud, even when cloud storage is disabled and local only storage settings are turned on. The information comes from security consultant Paul Moore, who last week published a video outlining the issue. According to Moore, he purchased a Eufy Doorbell Dual, which was meant to be a device that stored video...
Apple Park View

Elon Musk Meets With Apple CEO Tim Cook Amid Claims of Twitter App Store Dispute [Updated]

Wednesday November 30, 2022 12:43 pm PST by
Twitter CEO Elon Musk today met with Apple CEO Tim Cook at the Apple Park campus in Cupertino, California, according to a tweet shared by Musk this afternoon. Musk thanked Cook for taking him around Apple's headquarters, with no mention of what the two might have discussed. The meeting comes just after Musk on Monday claimed that Apple has "mostly stopped" offering ads on Twitter, and that...
iphone 11 tesla cybertruck close up

Elon Musk Pledges to Build iPhone Rival If Apple Ousts Twitter

Tuesday November 29, 2022 2:48 am PST by
Elon Musk has pledged to offer an "alternative phone" if Apple and Google remove Twitter from their app stores, adding to long-standing rumors about an iPhone rival from Tesla. Modified iPhone 11 Pro in the style of the Tesla Cybertruck, by Caviar. Musk's remark came after being asked about the potential scenario of Twitter being removed from app stores, which could conceivably happen if the...
Cyber Monday Deals Feature 2022

Best Cyber Monday Apple Deals Still Available for AirPods, Apple TV, iPad, and More

Monday November 28, 2022 5:24 am PST by
The Black Friday and Cyber Monday holiday shopping rush is drawing to a close, but there are still some good deals to be had out there. For Apple products, many of the deals you've seen since last week are still available, though some have expired. So for anyone who missed out on Black Friday deals, there's still an opportunity to get some of the year's best prices on many Apple devices. Note: ...
apple music replay 2022 highlight reel cropped

Apple Music Replay 2022 Revamped With 'Highlight Reel' [Updated]

Tuesday November 29, 2022 4:02 am PST by
Apple today rolled out an updated Apple Music Replay experience for 2022, showcasing a new "highlight reel" feature. Subscribe to the MacRumors YouTube channel for more videos. The overhauled experience, which started to be noticed by Apple Music subcribers on Twitter earlier today, puts the new highlight reel feature at the forefront of the Replay webpage, which users are encouraged to...
iPhone 14 Pro Rear Camera

iPhone 15 to Use 'State-of-the-Art' Image Sensor From Sony for Better Low-Light Performance

Monday November 28, 2022 11:00 am PST by
Apple's upcoming iPhone 15 models will be equipped with Sony's newest "state of the art" image sensors, according to a report from Nikkei. Compared to standard sensors, Sony's image sensor doubles the saturation signal in each pixel, allowing it to capture more light to cut down on underexposure and overexposure. Nikkei says that it is able to better photograph a person's face even with...