This fall, Apple raised entry prices for the iPhone 17 Pro and iPhone Air higher than their equivalent predecessors, driving an overall lineup increase. But based on a new report, we could see even more pricing changes next year if rumored A20 chip costs prove true.
Switch to 2-nanometer process for A20 reportedly comes at a big cost
Today China Times published a report covering the topic of semiconductor inflation.
The piece outlines how growing demand and new fabrication processes have led to increased costs for TSMC and its partners over time.
But next year, it seems, is when the increases could get especially significant.
Apple’s A20 chip in next year’s iPhone lineup is widely expected to use a cutting edge new 2-nanometer process.
However, according to the report, TSMC has poured significant capital into the development of this new process, and as such it is not willing to discount or negotiate on costs like it normally might.
Instead, TSMC’s new 2-nanometer process will reportedly come with at least a 50% price increase compared to the 3-nanometer process.
Apple and TSMC don’t disclose the exact financial details of their partnership, but this could lead to very significant increases overall.
9to5Mac’s Take
It’s certainly no guarantee that Apple would pass along its higher costs to customers, but if the spikes are bad enough, then it might need to—at least for some models.
For example, this year the base iPhone 17 stayed at $799 and has seen unusually high demand. So perhaps Apple will raise its starting price next year in response not only to increased demand but also escalating prices for the A20 chip.
We’re still almost a year out from new iPhones, so it’s likely that Apple is still finalizing many details of the iPhone 18 lineup. If higher A20 costs are a concern for the company, it could potentially pivot by withholding other features it was planning to upgrade.
Do you think Apple will raise more iPhone prices next year? Why or why not? Let us know in the comments.
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