Increase in TSMC's chip pricing may lead to a significant rise in the cost of your upcoming iPhone.
iPhone's Next Gen Could Leave Your Wallet Lighter
Without a doubt, the upcoming iPhone could prove to be a pricey piece of technology, thanks to hiked costs stemming from silicon manufacturer TSMC (Taiwan Semiconductor Manufacturing Company).
In their recent Q1 2025 earnings report, TSMC announced a net income of an impressive $361.56 billion. However, during the earnings call, Wendell Huang, Senior VP and CFO, warned investors about uncertainties and risks from potential tariff policies. While TSMC is yet to move its entire operation to the U.S., it's taking steps to safeguard itself from U.S. tariffs by shifting some of its advanced silicon wafer manufacturing processes, such as 3nm, 2nm, and 1.6nm, to the Fab 21 plant in Arizona.
While this move could save TSMC's partners from tariffs, it comes with increased costs. Reports suggest a 30% price hike on the 4nm chips being made in Fab 21, with the same trend likely to follow for any future silicon wafers made in the Arizona fab. Given that Apple is one of TSMC's key clients, this could lead to substantial price increases for future iPhone models and MacBooks.
With Apple's next silicon generation, the iPhone 18, rumored to utilize TSMC's 2nm process node, this cost increase could result in a hefty price tag. Though TSMC may not officially raise prices by 30%, import tariffs are another factor that could push prices even higher. Most iPhones are still assembled in China, and ongoing trade tensions could result in exorbitant tariffs on Chinese imports. To avoid such charges, Apple is reportedly diversifying its supply lines.
In light of these looming costs, it may be a wise decision to consider upgrading to the current iPhone 16 or the imminent iPhone 17, before the iPhone 18's expected release in Fall 2026.
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Bonus Insights
- TSMC's Arizona Expansion: The Arizona Fab 21 plant is expected to become an independent semiconductor manufacturing cluster, as TSMC plans to move 30% of its N2 (2nm) silicon wafers to the U.S.
- Intel Foundry: At present, Intel Foundry is the only domestic U.S. silicon manufacturer with a 2nm node for the Intel A18 process, which is being used in the Panther Lake chipset.
- TSMC and Intel Partnership: Rumors of a joint business venture between TSMC and Intel were recently denied by TSMC.
- Diversification: To avoid the potential impact of trade tensions, Apple is diversifying its supply lines and assembly locations to reduce its reliance on a single country.
- The increase in costs due to TSMC's shift to the Fab 21 plant in Arizona could result in a 30% price hike on 4nm chips, which could affect not only future iPhone models but also MacBooks, as Apple is a key client.
- With Apple's next silicon generation, the iPhone 18, rumored to utilize TSMC's 2nm process node, this cost increase could lead to a hefty price tag for the iPhone 18.
- Given the potential tariff policies and ongoing trade tensions, the iPhone 18's price could be further inflated, making it a pricey computer.
- To counter these potential costs, it may be wise to consider upgrading to the current iPhone 16 or the imminent iPhone 17, before the iPhone 18's expected release in Fall 2026.
- The Arizona Fab 21 plant, expected to become an independent semiconductor manufacturing cluster, will reportedly house 30% of TSMC's N2 (2nm) silicon wafers.
- In the domestic U.S., Intel Foundry is the only silicon manufacturer with a 2nm node, specifically used in the Panther Lake chipset.
- Despite rumors, TSMC has denied any joint business venture with Intel at this time, while Apple is reportedly diversifying its supply lines and assembly locations to reduce its reliance on a single country.
