Taiwan Semiconductor Manufacturing Company, or TSMC, is reportedly having to spend more to make its chips and is passing that cost on to the companies that use it as a supplier, according to a report from DigiTimes.
Those customers including Apple, which relies on TSMC to make the chips that power the iPhone.
Prices are expected to increase by as much as 20% from January 2022, it reported. For the kind of processes used by Apple, that price is expected to rise by something between 3 and 10 per cent, the same report claimed, with Apple experiencing a 3 to 5 per cent price hike.
That price increase is likely to be passed on to customers in the form of higher prices for the new iPhone.
The new report relied on sources within the supply chain and is far from confirmed. But Apple would not be the first company to be hit by increased prices for its chips, and other manufacturers have passed the increased cost of manufacturing on to their customers.
The rumours come amid ongoing problems in chip manufacturing, including for TSMC. A widespread shortage of processors – used in everything from smartwatches to cars – has made all kinds of chips more expensive, as well as leading to shortages such as those experienced by people looking to buy the PlayStation 5.
Apple has already rumoured that those problems could hit its products, saying in its latest earnings that difficulties getting hold of the chips could lead to problems for both the iPhone and the iPad.
Apple is expected to announce the new iPhone in the coming weeks. It is likely to hold a virtual event in mid-September, with the new phones going on sale around a week and a half after that.
The new phones are rumoured to include significant camera upgrades and the reduction of the size of the “notch” in the top of the display. The basic design is said to remain unchanged from the current iPhone 12 line-up.
Apple is also reported to be preparing to release the new Apple Watch Series 7 and perhaps an updated version of the AirPods around the same time.