Key iPhone 14 component supplier says to expect price hike
Apple gets its chips made from Taiwan Semiconductor Manufacturing Company. The rumored A16 Bionic, which will allegedly fuel the iPhone 14 Pro and 14 Pro Max, will be based on TSMC's 5nm process apparently. A TSMC supplier plans on raising prices and the Taiwanese company may pass on the increase to Apple.
Bloomberg reports (via iMore) that Japanese chemicals company Showa Denko K.K. expects to raise prices of essential chip fabrication materials as it confronts a host of economic challenges such as Covid-induced supply issues, rising energy costs because of the Ukraine war, and the weakening yen. This comes after a dozen price hikes already in 2022.
A big theme this year common to all the players in the materials industry is how much cost burden we’d be able to convince customers to share with us. The current market moves require us to ask twice the amount we had previously calculated." - Chief Financial Officer Hideki Somemiya
Other businesses, including Samsung's chip-making arm and TSMC itself, have taken similar measures. Toyo Securities analyst Hideki Yasuda believes prices of durable goods like electronics will likely be increased because of this.
Per an earlier Bloomberg report, manufacturing costs for chipmakers have risen by 20 to 30 percent on all fronts, including equipment, construction materials, chemicals, gas, and wafers. As a result, prices of chips could rise by as much as 20 percent.
Following a 20 percent increase last year, TSMC plans to raise prices by up to 8 percent this year, according to a recent report. Apple is unlikely to bear the cost itself and will likely expect customers to share the increase.
One report has already said that the 6.1 inches iPhone 14 Pro and the 6.7 inches Pro Max will be more expensive than their predecessors. The new phones will also start at a higher price, but that's because the opening model this year will be the 6.1 inches iPhone 13's successor as the 5.4 inches mini has been nixed.
The Pros are rumored to feature a new design with pill-shaped and hole punch cutouts for the Face ID tech and front camera. These models are also expected to flaunt a new 48MP camera. These changes could help them become the best phones of 2022.
Additionally, only these variants are rumored to get the A16 chip, whereas the iPhone 14 and the 6.7 inches iPhone 14 Max will likely stick with last year's A15 Bionic.
Bloomberg's Mark Gurman mentions in his Sunday newsletter that the chip shortage 'has considerably increased the expense of manufacturing and shipping components' and Apple may have decided to reserve the A16 for the higher-margin Pros to help it 'swallow the price increase without pushing it on to the consumer.'
That appears to suggest that a price increase is not on the cards, but nothing can be said for certain at the moment.
The iPhone 14 series will likely be announced in September alongside the Watch Series 8 and two other watch models.
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