Next year’s A20 chip could drive iPhone prices even higher

This fall, Apple increased the entry prices of the iPhone 17 Pro and iPhone Air to a higher level than their equivalent predecessors, leading to an overall increase in the lineup. But based on a new report, we could see even more price changes next year if rumors about A20 chip costs prove true.

Switching to 2-nanometer process for A20 would come at a high cost

Today China Times released a report on the topic of semiconductor inflation.

The article describes how growing demand and new manufacturing processes have led to increasing costs for TSMC and its partners over time.

But next year, it appears, the increases could become particularly significant.

Apple’s A20 chip that will power next year’s iPhone lineup is widely expected to use a new cutting-edge 2-nanometer process.

However, according to the report, TSMC has invested significant capital in developing this new process and, as such, it is not willing to reduce or negotiate costs as it normally would.

Instead, TSMC’s new 2-nanometer process would result in a price increase of at least 50% over the 3-nanometer process.

Apple and TSMC are not disclosing the exact financial details of their partnership, but overall it could lead to very significant increases.

Take from 9to5Mac

It’s certainly not guaranteed that Apple will pass on its higher costs to its customers, but if the spikes are large enough, it may have to, at least for some models.

For example, this year the base iPhone 17 remained at $799 and saw unusually high demand. So perhaps Apple will raise its starting price next year in response to not only increased demand, but also rising prices for the A20 chip.

We’re still almost a year away from new iPhones, so it’s likely that Apple is still finalizing many details of the iPhone 18 lineup. If the A20’s higher costs are a concern for the company, it could potentially change course by declining other features it was considering upgrading.

Do you think Apple will raise iPhone prices further next year? Why or why not? Let us know in the comments.

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