Chipmaker TSMC has begun informing major clients like Apple about further price hikes, according to a new report out of Asia.
The leaker and aggregator known as "yeux1122" outlined the latest news on Korean social media site Naver. TSMC has apparently started notifying major clients of impending price increases for advanced fabrication processes below 5-nanometers. This would include Apple's A16, A17, A18, A19, M3, M4, and M5 chips, as well as any future iterations. The price hikes are expected to be in the range of 8–10% and commence next year.
Last month, the China Times reported that Apple's "A20" chip designed for next year's iPhone models could be considerably more expensive. The A20 chip is likely to be the first widely available 2-nanometer chip, debuting in the iPhone 18 lineup next year and forming the foundation of subsequent M6-series chips. The previous three generations of A-series chips have all been based on TMSC's 3-nanometer node, with the upgrade to 2-nanometer promising further performance and efficiency improvements.
TSMC apparently told customers, presumably including Apple, to expect pricing that is at least 50% higher than 3-nanometer processors. This was attributed to unusually high capital expenditure for the new node and to the lack of discounting strategies while yields are still in their early acceptable phase.
The report further stated that suppliers expect flagship mobile chips built on the 2-nanometer process to carry unit prices around $280 once volume production begins. This would make it the most expensive component in the iPhone and dramatically affect Apple's profit margins, if the increase is not passed on to customers.
A report from DigiTimes last year placed the cost of the A18 chip at around $45, with a total hardware bill of $416 for a model that retailed at $799, implying that the chip represents roughly 10% of bill of materials (BOM) cost and about 5–6% of retail price before logistics and development expenses.
If the component cost rumors are true, Apple could limit 2-nanometer chips to only some 2026 iPhone models, such as the iPhone 18 Pro and iPhone 18 Pro Max. In September last year, Apple analyst Ming-Chi Kuo warned that "due to cost concerns, not all new iPhone 18 models may be equipped with a 2-nanometer processor."
