Rising TSMC Chip Costs May Push the iPhone 18 Pro to Record Prices

Last month, Apple dropped the bomb of the decade with massive price hikes on nearly everything it sells — a significant move for a company that has long ...

RSS · July 22, 2026 at 10:02 PM

KUALA LUMPUR, 23 JULY 2026 —

Market Impact

Apple's recent price hikes on nearly all its products may be just the beginning, as the company faces another pressure point that could drive up costs even further. In June, Apple announced significant price increases, which were largely attributed to the "RAMageddon" trend, where DRAM memory and NAND flash storage prices have risen dramatically due to high demand from AI hyperscalers building massive data centers. However, another factor that could impact Apple's costs is the rising cost of advanced nodes used to produce its A-series and M-series chips, which are manufactured by Taiwan Semiconductor Manufacturing Company (TSMC).

The demand for these advanced nodes has increased significantly, driven by the "AI gold rush," where companies are using Apple's Mac mini and Mac Studio as platforms for AI and agentic tools. During Apple's Q2 2026 earnings call, CEO Tim Cook explained that the company was struggling to meet demand due to the limited availability of these advanced nodes. While Apple can still obtain DRAM and NAND by paying a premium, its reliance on TSMC for chip production means that it is competing with other deep-pocketed companies, such as Nvidia, to get its chips made.

TSMC's costs are rising due to the high demand for its services, and the company is expected to raise prices by up to 10% next year to offset increasing costs for materials, manufacturing equipment, and construction of new overseas chip plants. According to a report by Nikkei Asia, TSMC has held discussions with clients, including Apple, about the price increases, which will affect process technologies at the 7-nanometer and more advanced levels. These technologies accounted for about 77% of TSMC's revenue in the most recent April-June quarter.

The price increases are expected to range between 5% and 10%, depending on the customer and the product. However, companies that require high-performance computing chips, such as Apple's flagship chips, will pay an extra premium of up to 15%. Apple has shifted some of its chip production to Intel, which may be able to hold the line more effectively due to a nearly $10 billion investment by the US government. However, it will be years before Intel can fabricate Apple's highest-end "Pro" and "Max" silicon, and the company is only just getting started with trial runs for chips like the M7 and A21.

The impact of TSMC's price increases on Apple's costs will likely be significant, and the company may pass these costs on to consumers. With the iPhone 18 Pro and Apple Watch Series 12 and Ultra models expected to be announced in September, analysts believe that these new products will come with higher price tags. The exact extent of the price increases is not yet clear, but it is likely that Apple will factor in the additional costs from TSMC's price hikes. Details not yet available on the exact pricing of the new iPhone and Apple Watch models, but it is expected that they will be higher than their predecessors.

In the Asia region, where TSMC is based, the impact of the company's price increases will be closely watched. The region is a significant hub for technology manufacturing, and any changes in the supply chain can have far-reaching consequences. For Malaysian consumers, the potential price increases of Apple products may be a concern, as they may be forced to pay more for the latest devices. However, it is worth noting that Apple's products are often considered premium, and the company's pricing strategy is designed to reflect the value and quality of its products.

Stakeholders, including analysts and industry experts, are closely watching the situation and providing their perspectives on the potential impact of TSMC's price increases. According to some analysts, the price hikes may not have a significant impact on Apple's sales, as the company's products are often considered essential by its loyal customer base. However, others believe that the price increases may lead to a decline in sales, as consumers may be deterred by the higher prices. As the situation continues to unfold, it is likely that there will be more information available on the potential impact of TSMC's price increases on Apple's products and the technology industry as a whole.

Looking ahead, the potential price increases of Apple products due to TSMC's rising costs will likely be a significant factor in the technology industry. As the demand for advanced nodes and high-performance computing chips continues to grow, companies like Apple will need to navigate the complex supply chain and balance their costs with the need to deliver high-quality products to their customers. With the iPhone 18 Pro and Apple Watch Series 12 and Ultra models expected to be announced soon, consumers will be watching closely to see how Apple will price its new products, and whether the company will be able to maintain its premium pricing strategy in the face of rising costs. As the situation continues to evolve, it is likely that there will be more information available on the potential impact of TSMC's price increases on Apple's products and the technology industry as a whole.

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