Apple's primary chip supplier, TSMC, has announced a price increase of up to 10 percent starting in 2027. According to a report from Nikkei Asia, negotiations with clients began in June and were finalized this month, with the new pricing taking effect on January 1, 2027. The increase covers both mature nodes and advanced processes at 7-nanometer and below, which are used for Apple's A-series and M-series processors.
Reasons behind the production cost increase
TSMC's decision reflects rising costs for raw materials, manufacturing equipment, and the construction of new overseas plants. The Taiwanese foundry also stated that customers placing additional high-performance computing orders beyond their original forecasts will face a further 10 to 15 percent premium. This means some advanced chip orders could see overall increases exceeding 10 percent.
Sponsored Protocol
Impacts on Apple devices and possible price repercussions
Apple is TSMC's largest customer, and the chip cost increase arrives in a crucial year when new iPhone 18 models and special 20th-anniversary iPhone devices are expected. In recent months, Apple has already significantly raised prices across multiple product lines, a move CEO Tim Cook called 'unavoidable,' citing soaring memory and storage costs. It remains to be seen whether Apple will absorb these new increases or pass them on to consumers. In an already tense geopolitical landscape, with US-China tensions affecting the semiconductor supply chain as highlighted in the article Chinese AI splits the White House, TSMC's strategy could have global consequences.
TSMC's strategy and timing of the price hike
TSMC stated that it delayed the increases until 2027 to give clients time to adjust after negotiations. The company declined to comment on specific prices but told Nikkei Asia that its general market approach is 'strategic, not opportunistic.' According to Wikipedia, TSMC is the world's largest contract semiconductor manufacturer, with over 50 percent market share.
Sponsored Protocol
TSMC's price increase may accelerate the trend of chip production diversification, with companies like Intel and Samsung seeking to expand their capabilities. Meanwhile, Apple could evaluate strategies to mitigate the impact, such as greater vertical integration or seeking alternative suppliers. The market is closely watching the next moves from the Cupertino giant.
Source: https://www.macrumors.com/2026/07/21/apple-tsmc-price-hikes-2027
