Apple Gives Up TSMC Price Increase, iPhone Will Be More Expensive Next Year?

JAKARTA - In the midst of a shifting global economy, Taiwan Semiconductor Manufacturing Company (TSMC) decided to increase the prices of various types of wafers. However, Apple is against this.

Wafers are substrates or thin slices of semiconductor material used in the fabrication of integrated circuits. And TSMC, plans to increase wafer prices by 6 percent.

Currently, TSMC provides a choice of 8-inch and 12-inch wafer chips. According to a recent Economic Daily News report, the price of 8-inch wafers saw a 6 percent increase, while 3 to 5 percent price increases were set for 12-inch wafers, depending on the lithography.

Apple is said to have negotiated with TSMC, forcing the chipmaker not to raise prices, given how the Cupertino, California, US giant generates a quarter of annual revenue for TSMC.

Along with its negotiations, Apple also rejected price increases that the company claims could affect the timeline for the launch of its new chips such as the A17 Bionic for iPhone 15 Pro and future iPhone 15 Ultra and M3 for Mac. But in the end, Apple had to give in to TSMC.

Where Apple plans to charge more to customers thanks to the increase in the price of the TSMC chip. Furthermore, Apple is not alone in facing TSMC, while Nvidia is also seeing an opportunity to negotiate with TSMC.

TSMC insiders say the current 5 percent or more gains are normal, especially with higher inflation, and rising raw material costs in most areas.

Tom's Hardware said Tuesday, October 4, that TSMC has been hit by consumer declines, particularly in demand for consumer products that rely on semiconductors such as graphics cards, smartphones and storage devices.

However, TSMC customers are still facing strong demand in the second quarter of 2022 and a positive market in the coming year. The demand includes the automotive market, data centers and others.