Apple iPhone 18 could become more expensive due to A20 chip
As usual, the Apple iPhone 18 models will also receive an updated chipset, in this case the next-generation A20 chip. The A20 is produced using a new 2 nm manufacturing process at TSMC and is expected to lead to significant performance and energy efficiency improvements in next year’s iPhones.
This comes at a price, however, literally. And Apple could pass these potentially significantly higher costs on to customers. The latest confirmation that Apple will use TSMC’s 2 nm process in the iPhone 18 models comes from well-known Weibo tipster Digital Chat Station, which has sources in the Chinese supply chain.
In 2023, Apple introduced 3 nm chips for its iPhones and Macs, an upgrade over the previous 5 nm processors. The switch to 3nm technology brought 20% faster GPU speeds, 10% faster CPUs, and a two-fold faster Neural Engine to the iPhone, as well as similar improvements to Macs. The upcoming iPhone 17 series is expected to feature processors manufactured using TSMC’s N3P chip technology, an improved version of the 3nm process. However, the introduction of 2nm in the iPhone 18 is expected to bring significantly greater performance and efficiency gains.
TSMC plans to begin manufacturing 2nm chipsets in late 2025. Apple is expected to be the first company to receive these chipsets. TSMC is building two new chip factories specifically for this purpose and is already working on approval for a third. New factories are typically built when production capacity needs to be increased to accommodate large orders. As TSMC is investing heavily in 2nm technology, production must also be adjusted accordingly.
New 2nm chips for the iPhone 18 will be expensive
Since Apple is expected to be the first adopter of the new process, the company is likely to face significantly higher costs. These costs will, of course, be passed on to customers, which could lead to another round of price increases for the iPhone 18. And all this comes after this year’s iPhone 17 models have already seen their prices rise due to US import tariffs. Apple received a reprieve from the 145% tariffs on goods imported from China and the 10% tariffs on goods imported from other countries.
So far, however, it doesn’t look like this will last: US President Donald Trump is already working on new semiconductor tariffs that will likely affect all Apple devices. Trump said earlier this week that no one is “off the hook” and that there will be “no tariff exemption.” Apple and other technology companies are “moving to a different tariff zone,” with the 20% “fentanyl tariffs” still in effect and additional tariffs to follow.
