Apple Could Increase iPhone 13 Prices to Compensate for Higher Chip Prices

iPhone 13 smaller notch

Apple’s chip supplier TSMC will be increasing prices for its advanced and mature technologies by as much as 20 percent from next year. The price increase could force Apple to increase the pricing of the iPhone 13 series as well.

The DigiTimes report indicates that TSMC will be hiking the prices for its sub-7nm process nodes by 3 to 10 percent. Apple is one of TSMC’s biggest clients and accounts for nearly 20 percent of the total wafer revenue. This move from TSMC will lead to a 3 to 5 percent hike for Apple.

While the price hike will come into effect from January 2022, the new prices will be applicable to all orders that TSMC fulfills from December 2021. For 16nm and older process nodes, the price hike is as much as 20 percent.

Apple currently fabricates its M1 chip and A14 Bionic chip on TSMC’s 5nm foundries. It is expected to use TSMC’s enhanced 5nm+ fabrication process for the A15 chip that will be used on the upcoming iPhone 13 series.

The report citing market sources speculates that the higher chip pricing could lead Apple to “set high prices for its upcoming iPhone and other series.” A recent rumor surrounding the redesigned MacBook Pros did suggest that the 14-inch model could be more expensive than the existing 13-inch MacBook Pro.

Apple is not the only one that will be affected by the price hike. Other OEMs have already hiked the prices of their products due to a spike in chip and component prices. The TSMC price hike can be attributed to a demand-supply imbalance, with the entire smartphone and automobile industry suffering from a major semiconductor shortage due to increased consumer demand.

GlobalFoundries, SMIC, and PSMC have also increased their chip prices, so TSMC doing the same should not be surprising. The semiconductor shortage has already led various OEMs to increase the pricing of their products. Apple has not been that hard by the semiconductor shortage, but the price hike is going to have an affect on either its bottom line or product pricing.

[Via DigiTimes]