Apple has reportedly rejected TSMC chip price hike

A new report claims that Apple has rejected iPhone processor manufacturer TSMC's plan to raise its chip manufacture prices by around 6%.

The Taiwan Semiconductor Manufacturing Co was first rumored in August 2022 to be planning an increase, and then shortly afterwards it formally told its customers that the price rise would take place in 2023.

Now according to Economic Daily News, it is rumored that Apple has simply rejected the price increase. Apple is TSMC's largest customer, so it is likely that it would be able to have some influence.

However, TSMC has been slow to increase its prices compared to its rivals. Other processor manufacturers have been increasing chip production prices since late 2020, in part because of the global semiconductor shortage.

Economic Daily News sources further says that TSMC's planned rise is not high compared to those rivals. At the same time, TSMC's increase was intended to begin during 2023 when the global shortage is expected to ease.

Consequently, the publication's sources say that some customers had hoped that TSMC would be able to reduce its planned increase.

Neither Apple nor TSMC have commented on the claim that the rise has been rejected.

The planned TSMC rise was one reason why it had been believed Apple would increase the price of the iPhone 14 range, compared to the iPhone 13. Apple kept the iPhone 13 pricing for the US and China, but did raise it for most other markets, mostly because of foreign currency exchange complications.

11 Comments

beowulfschmidt 12 Years · 2361 comments

About 2 years ago

I suppose if you can get away with telling them "no", then tell them "no".

Two questions I wonder about (and have no idea of the answers):

1. Who else can supply the type and volume of chips Apple needs without a major retooling effort? Intel?

2. Who does TSMC have queuing up for chip fab to use up any capacity left unfulfilled by a departure or reduction by Apple?

I would suspect the answers to at least one of those would give a clue as to who cries "uncle" first.

crowley 15 Years · 10431 comments

Risky, when we're still in the tailwind of a chip shortage. I doubt TSMC will have trouble finding other customers, but there aren't many alternatives who can supply Apple at such scale and sophistication.

netrox 12 Years · 1510 comments

I am dubious. The inflation rate is more than 9%. The 6% hike is actually a good deal given the whole context.

muthuk_vanalingam 8 Years · 1371 comments

beowulfschmidt said:

I suppose if you can get away with telling them "no", then tell them "no".

Two questions I wonder about (and have no idea of the answers):

1. Who else can supply the type and volume of chips Apple needs without a major retooling effort? Intel?

2. Who does TSMC have queuing up for chip fab to use up any capacity left unfulfilled by a departure or reduction by Apple?

I would suspect the answers to at least one of those would give a clue as to who cries "uncle" first.

Qualcomm was literally forced to choose inferior Samsung foundry for manufacturing Snapdragon 888 and 8 Gen 1 chips (their flagship SoCs) in the last 2 years due to inadequate capacity availability with TSMC. Qualcomm and Mediatek would be more than happy to pay for the capacity left over by Apple. Huawei too (for their Kirin SoCs), if not for international politics. And who knows, Intel might join the queue as well in the future if they are unable to fix their own foundry issues.

waveparticle 3 Years · 1497 comments

netrox said:

I am dubious. The inflation rate is more than 9%. The 6% hike is actually a good deal given the whole context.

9% is past. The 6% hike will be future.