William Gallagher
Impending increases to the cost of component manufacturing may see Apple raising its "iPhone 13" prices to compensate.
It's previously been reported that processor manufacturer TSMC would prioritize Apple, and the automotive industry, over other firms as the global chip shortage continues. However, TSMC is believed to be about to raise its prices — and now Apple is expected to pass that increased cost onto consumers for the next iPhone.
According to Digitimes, unspecified sources in the supply chain say that TSMC is shortly to raise its quoted prices for sub-7nm technologies. The "iPhone 13" range is believed to be based on a 5nm processor, the A15.
Overall, TSMC is said to have notified customers of increases of up to 20%. However, the sub-7nm processors are to see increases between 3% and 10%.
The supply chain sources expect that Apple, which accounts for a fifth of TSMC's processor business, would see price rises of between 3% and 5%.
In all cases, the increases are said to come into effect from January 2022. Rather than only increase the "iPhone 13" price then, Apple is expected to launch with higher prices.
The current iPhone 12 is also based on a 5nm processor, so if Apple retains any models in its lineup, those may presumably face price increases at some point. Currently, the iPhone 12 is reportedly not seeing the usual slowdown in sales that are typical ahead of a new launch.
Digitimes has a poor history for predicting Apple plans, however its track record for information from industry sources is much stronger.
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18 Comments
If Apple is going to increase iPhone prices, they won't do it by tacking on +5% to cover. It'll be a more natural increase. A $799 model will go to $899, a $999 model will go to $1099.
One thing is pretty clear: Apple will not keep prices the same. They are loathe to let their gross margins erode. That would happen in CY2022 once the semiconductor price increases kick in.
If one clicks through the various hyperlinks, other foundries have already hiked prices: GlobalFoundries, Powerchip Semiconductor Manufacturing (PSMC), Semiconductor Manufacturing International (SMIC), United Microelectronics (UMC).
Source: Tom's Hardware
My guess is that TSMC won't be the last either. This is a broad industry price increase based on increased material cost amongst other factors.
Sounds like iPhone 12 models might not receive a price reduction. The 13 series will come in above them.
Inflation (regardless of what formula you use to calculate it) is being seen broadly, from labor and energy to raw materials and transportation.
Expected inflation with the trillions of newly printed money.
So the iPhone 13 is in production now but they’re going to raise prices on chips already delivered? Seems bogus.