Taiwanese publisher, DigiTimes reports that Apple’s chip supplier TSMC (Taiwanese Semiconductor Manufacturing Company) is increasing the production cost of advanced and mature chipsets. The manufacturer has notified all clients of up to a 20% increase in price and the changes will go into effect by January 2022. Therefore, to compensate for the high chip cost, Apple might increase the price of the iPhone 13 series.
Previously, it is reported that Apple will keep the same prices for iPhone 13 series as the iPhone 12 series. The starting price of the iPhone 12 mini is $699, iPhone 12 is $799, iPhone 12 Pro is $999, and iPhone 12 Pro Max is $1099.
TSMC to increase Apple’s silicon cost by 3% to 5% which would be compensated with higher prices of iPhone 13 series
The paywalled article viewed by MacRumors does not state the reason for TSMC increasing production cost of chipsets, but details that the increase will be around 20% across process technologies. Although the new prices will into effect by January 2022, they will apply to orders from December 2021.
TSMC has reportedly notified customers of price increases by as much as 20% for its advanced and mature process technologies, with the new prices set to be effective starting January 2022. The price adjustments will also be for the orders scheduled to be fulfilled starting December.
Apple’s iPhones, iPad, and M1 Mac models are powered by silicon manufactured by TSMC. As companies usually pass the increase in production cost onto consumers, Apple will likely increase the cost of the iPhone 13 series and other upcoming products. The report states:
For TSMC’s advanced sub-7nm process technologies, quotes will rise by 3-10%, the sources indicated. Apple, the biggest client of TSMC with its orders accounting for over 20% of the foundry’s total wafer revenue, will experience a 3-5% price hike, the sources said.
Apple is likely to set higher prices for its upcoming iPhone and other series, according to market sources. Multiple notebook brand vendors, which have raised their prices by 5-10% so far this year, continue to explore ways to mitigate the impact of rising costs on their profitability.