A paywalled report suggests that Apple will be facing bigger bills from TSMC for its A-series and M-series chips …
Digitimes reports.
While the site speculates that this may see Apple charge more for the iPhone 13 lineup than the iPhone 12 one, the supply chain has absolutely no visibility into the Cupertino company’s pricing plans.
TSMC is poised to raise its quotes including those for advanced sub-7nm process technologies, which will result in more manufacturing costs facing Apple and other major clients, according to industry sources.
There is generally little relationship between Apple’s component costs and iPhone pricing. Most cost variations are relatively small, and some – like RAM and flash storage – may vary from contract to contract with no impact on Apple’s retail pricing.
Apple’s size enables it to negotiate favorable terms with suppliers. The company tends to demand deals that give it priority over other customers, and it likes to diversify its supply-chain to have multiple suppliers for most components. That means that the company can boost orders with one supplier if there are problems with another, and also play off suppliers against each other in order to get 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.
That’s an exaggeration, of course. Apple itself has advised that supply constraints were likely to reduce iPad and Mac revenue by as much as $3-4B, and has implied that chip shortages will even hit iPhone production to some extent.
According to Wave7 Research, seen by PCmag, “sources have told Wave7 Research that Apple was able to lock down chipset supply well ahead of time” but that this “was not the case for other OEMs” […]
The shortage is “uneven by carrier, channel, and even by store,” the Wave7 report says. AT&T is least affected, but only because AT&T has the most iPhone-heavy customer base. At T-Mobile, the shortage is affecting “everybody but Apple,” a store manager told Wave7.
It is true, however, that Apple has less bargaining power when it comes to sole suppliers. TSMC is the company’s only supplier of the A-series and M-series chips used in iPhones, iPads, and new Macs.
Image: Platform De.Central
