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Apple facing bigger bills for M-series chips and A-series

A paywalled report indicates that Apple may face higher bills from TSMC to cover its A-series or M-series chips

Digitimes reports.

According to industry sources, TSMC is set to increase its quotes, including for sub-7nm process technology, which will lead to higher manufacturing costs for Apple and other major clients.

Although the site suggests that Apple might charge more for the iPhone 13 line than the iPhone 12, the supply chain does not have any visibility into Cupertino’s pricing plans.

Apple’s component prices and iPhone pricing have a generally low correlation. Cost variations are usually small and may not have an impact on Apple’s retail pricing.

Apple’s large size allows it to negotiate favorable terms for suppliers. Apple is known for demanding deals that give it priority over customers. It also likes to diversify its supply chain to have multiple suppliers for most components. This allows the company to increase orders with one supplier in the event of problems, as well as play off suppliers against each others to obtain the best pricing.

The combined effect means that Apple is arguably in one of the strongest positions in the industry, one market intelligence company going so far as to say that the chip shortage is affecting everyone except Apple.

Wave7 Research, as seen by PCmag, claims that “sources have informed Wave7 Research that Apple was capable of locking down chipset supplies well ahead of schedule” but this “wasn’t the case for other OEMs” […]

According to Wave7, the shortage is not affected by channel, carrier or store. AT&T is the least affected due to its iPhone-heavy customer base. Wave7 was told by a T-Mobile manager that the shortage has affected “everybody except Apple”.

This is a gross exaggeration. Apple has stated that supply shortages are likely to decrease iPad and Mac revenues by as much $3-4B and implied that iPhone production will be affected to some degree by chip shortages.

However, Apple does have less bargaining power with sole suppliers. TSMC is Apple’s sole supplier of A-series or M-series chips that are used in iPhones, iPads, new Macs, and other devices.

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Peter Graham
Peter Grahamhttp://fix-iphones.com
Hi there! I'm Peter, a software engineer and tech enthusiast with over 10 years of experience in the field. I have a passion for sharing my knowledge and helping others understand the latest developments in the tech world. When I'm not coding, you can find me hiking or trying out the latest gadgets.

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