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TSMC Reportedly Informs Apple of Higher Chip Fabrication Costs Under 5nm Next Year

TSMC Reportedly Informs Apple of Higher Chip Fabrication Costs Under 5nm Next Year

A potential hike in the chip prices could mean a higher bill of materials (BoM) and a decrease in profit margins for Apple.

Written by Shaurya Tomer, Edited by Ketan Pratap | Updated: 7 November 2025 09:57 IST

TSMC Reportedly Informs Apple of Higher Chip Fabrication Costs Under 5nm Next Year

iPhone 17's (pictured) A18 chip reportedly costs Apple about $45 (roughly Rs. 3,990)

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Highlights

The increase could range from eight to 10 percent for major customers
Apple may face higher iPhone production costs due to TSMC’s price hike
The A20 chip using 2nm tech may cost more than the current 3nm node

Manufacturing the iPhone and other devices could become more expensive for Apple due to the alleged rise in costs. As per a tipster, the Cupertino-based tech giant has been informed by Taiwan Semiconductor Manufacturing Company (TSMC) of the impending rise in advanced fabrication processes of chipsets under 5 nanometre (nm) next year. While the general increase in production costs is said to be between three to five percent over the last 26 years, some customers and assembly lines could see this hike to between eight to 10 percent.

Chips to Get More Expensive

Tipster yeux1122 shared information about the impending increase in manufacturing costs in a post on the South Korean blog Naver. Citing Taiwanese media and business sources, the leaker claimed that TSMC has begun notifying its major clients, including Apple, of the upcoming increase in the advanced fabrication process costs.

It is said to affect chipsets fabricated below the 5nm transistor technology. This potentially means that all of the current iPhone models could become more expensive to manufacture. The latest A19 Pro chip powers Apple's current flagship iPhone 17 Pro and iPhone 17 Pro Max, while the standard variant gets the A19 SoC. Meanwhile, the iPhone 16 models come with the A18 family of chipsets.

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The impending price hikes are expected to be in the range of eight to 10 percent, and may be implemented from next year.

Previously, Apple was reported to use the 2nm fabrication process for the unannounced A20 chip for the purported iPhone 18 lineup. While it is anticipated to offer improvements linked to performance and efficiency, it is expected to involve at least 50 percent higher costs than the 3nm process. This is attributed to high establishment costs for the assembly of the new node and low yields in the early phase.

Another report claimed that it costs Apple $45 (roughly Rs. 3,990) to manufacture the A18 chip. The total cost of hardware for an iPhone 17 comes in at around $416 (roughly Rs. 36,900), which is then retailed at $799 (roughly Rs. 71,000). A potential hike in the chip prices could mean a higher bill of materials (BoM) and a decrease in profit margins for the tech giant.

iPhone 17

REVIEW
KEY SPECS
NEWS

Design
Display
Software
Performance
Battery Life
Camera
Value for Money

Good
Transformative and brighter ProMotion display
Powerful performance
Meaningful camera upgrades
More value-for-money
Great battery life

Bad
iOS 26 has glitches
Ineffective anti-reflective coating

Read detailed Apple iPhone 17 review

Display 6.30-inch

Processor Apple A19

Front Camera 18-megapixel

Rear Camera 48-megapixel + 48-megapixel

RAM 8GB

Storage 256GB, 512GB

OS iOS 26

Resolution 1206x2622 pixels

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Further reading: Apple, TSMC, tsmc chips, Semiconductor, iPhone 17

Shaurya Tomer

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Shaurya Tomer is a Sub Editor at Gadgets 360 with 2 years of experience across a diverse spectrum of topics. With a particular focus on smartphones, gadgets and the ever-evolving landscape of artificial intelligence (AI), he often likes to explore the industry's intricacies and innovations – whether dissecting the latest smartphone release or exploring the ethical implications of AI advancements. In his free time, he often embarks on impromptu road trips to unwind, recharge, and ...More