Apple Disapproves TSMC Price Hike Compromising Future Projects

To create wafers in large quantities for customers like Apple, new cutting-edge semiconductor technology developed by TSMC come at a high price. The Taiwanese company is reportedly about to release its first 3nm goods, but the most recent source claims that its lucrative partner Apple will not be interested in paying more to its supplier.

The first business strategy for TSMC called for price increases of between 6 and 9 percent for the next year. Later, according to Economic News Daily, there was some negotiating, beginning with a 3 percent increase and eventually rising to the 6 percent threshold.

We predict that the chip maker will charge customers a greater percentage for its more sophisticated chip process, which is currently its first-generation 3nm.

Image: Gulf Business

Sadly for TSMC, Apple turned down these offers. There won’t be much room for back-and-forth price haggling because the latter represents 25% of its supplier’s annual revenue.

This could be one of the reasons why we stated that the future M2 Pro and M2 Max for updated MacBook Pro models would be produced using the 5nm process rather than the 3nm technology; it’s possible that both parties were unable to come to a financial compromise.

The forthcoming SoC, as well as the M3 for future Macs, are both rumoured to utilise TSMC’s second-generation 3nm technology. If Apple intends to price its iPhone 15 Pro and iPhone 15 Ultra at the same level as the iPhone 14 Pro and iPhone 14 Pro Max, it may force TSMC to digest those higher manufacturing costs or suffer a decline in profit margins for each high-end iPhone sold.

At this point, the article does not provide a potential timeframe for a resolution between the two parties, but we hope that this pointless impasse won’t impede the development of Apple’s upcoming custom hardware.

Muhammad Zuhair
Passionate about technology and gaming content, Zuhair focuses on analysing information and then presenting it to the audience.
Back to top button