Apple intends to raise the price of the next series of iPhone 13 to offset the increased production costs of chips from its main chip supplier TSMC, as reported by DigiTimes.
According to the report, TSMC is planning to increase the costs of its chip production, with impacts on several of its customers, including Apple. TSMC expects to increase its costs by up to 20% for its “advanced and mature process technologies”. The new changes are expected to take effect in January.
TSMC has informed customers of 20% price increases for its advanced and mature process technologies, with the new prices set to take effect from January 2022. Price adjustments will also be for orders scheduled for be attended from December.
For TSMC’s advanced sub-7nm process technologies, quotes will increase by 3-10%, sources indicate. Apple, TSMC’s biggest customer with its orders accounting for more than 20% of the foundry’s total wafer revenue, will see a price increase of 3-5%, the sources said.
As a way to offset the rising costs, Apple is planning to raise the costs of the next iPhone 13 series to “mitigate the impact of rising costs on its profitability”.
While facing rising production costs, branded suppliers may end up passing the costs on to end-market customers, observers say.
Apple may set higher prices for its next iPhone and other series, according to market sources. Several branded notebook suppliers, which this year have increased their prices by 5-10% so far, continue to look for alternatives to mitigate the impact of rising costs on their profitability.
This year, Apple is preparing some considerable improvements for the iPhone 13, including features designed specifically for photographers and video professionals. In the more sophisticated models of the next line, it is rumored that Apple is adding support for ProRes for videos and videos in portrait mode. Apple may see these two features as justification for an increase in the price of its higher-end iPhones.