Production costs for Apple’s flagship devices may soon rise significantly. A new report from a South Korean outlet claims that TSMC has informed its major clients of upcoming price increases for chips built on its 2nm and 3nm manufacturing processes. Some partners could see costs jump by as much as 10%, potentially impacting Apple’s entire hardware lineup.
Apple’s current A19 processor—used across the iPhone 17 series—is produced using TSMC’s 3nm process. The same technology powers Apple’s M3, M4, and even the next-generation M5 chips that bring advanced AI capabilities to the company’s computers and tablets. These chips are found in the MacBook Pro, MacBook Air, iMac, Mac mini, Mac Studio, iPad Air, and iPad Pro. Earlier reports suggested that the iPhone 18 might command a higher price due to its A20 chip, but this marks the first time existing chips like the A18, M2, and M3 have been linked to potential supply-side price hikes.
How Higher Chip Costs Could Affect Pricing
Historically, Apple has leveraged its massive order volumes to negotiate favorable deals with TSMC. However, according to a report from China Times, those volume discounts may soon disappear. The costs involved in scaling production for 2nm chips are so high that TSMC is said to be suspending its usual incentives entirely.
Industry analysts estimate that Apple’s A19 chip costs about $90 to produce. If TSMC moves forward with the rumored 50% increase, that could push the cost of the upcoming A20 Pro processor to around $135. Chips built on the 3nm process might rise by roughly $10 apiece.
For a company with the deep cash reserves of Apple, these increases may not strain finances. However, Apple is famously protective of its profit margins. The key question is whether the company will absorb the higher costs or pass them along to consumers through more expensive iPhones and Macs. Notably, iPhone prices have remained relatively stable over the past six years despite inflation and supply-chain challenges.
Faster Chips, Same Battery Life
There is some good news on the horizon. Chips produced on TSMC’s 2nm process promise both improved performance and better power efficiency. The upcoming iPhone 18 Pro is expected to be the first device to feature Apple’s A20 Pro processor—built using this new 2nm technology—offering faster speeds without compromising battery life.
