The A16 chip is expensive to make

Captain Newmackwa said:
I wonder why Apple didn't jack up the prices of the iPhone 14 line of phones.
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Because the 14 (and 14 Plus) are still rocking the A15. Only the 14 Pro line has the A16. And between the lower volume of the Pro and being the only manufacturer that hasn't squeezed all the margins out of their product lines, Apple probably figures that the market goodwill of not jacking up prices in a wobbly economy is worth eating a $50/unit hit on the high end.

Also, they might be betting on TSMCs N4 node dropping in price, one way or another... (Better yields than expected? Snapping up excess capacity from Nvidia on the cheap?) *shrug*
 
XenIneX said:
Because the 14 (and 14 Plus) are still rocking the A15. Only the 14 Pro line has the A16. And between the lower volume of the Pro and being the only manufacturer that hasn't squeezed all the margins out of their product lines, Apple probably figures that the market goodwill of not jacking up prices in a wobbly economy is worth eating a $50/unit hit on the high end.

Also, they might be betting on TSMCs N4 node dropping in price, one way or another... (Better yields than expected? Snapping up excess capacity from Nvidia on the cheap?) *shrug*
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I meant the iPhone 14 Pro/Pro Max. They're the same price as the phones they're replacing.
 
Airbrushkid said:
Apple has enough money to start fabing their own chips!
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Yes and no. It certainly has enough cash on hand that it could build more than one factory, but those tend to cost tens of billions of dollars just to get started. Then there's labor costs, extending the supply chain... you get the idea. Apple would have to determine that the added long-term expenses would be worth it versus paying for special treatment from fabs like TSMC. That and factories take years to complete and spin up.

There's a chance Apple might even prefer the current arrangement, as it also tends to limit supply for competitors (at least, until there's enough capacity).
 
Aurelius said:
Yes and no. It certainly has enough cash on hand that it could build more than one factory, but those tend to cost tens of billions of dollars just to get started. Then there's labor costs, extending the supply chain... you get the idea. Apple would have to determine that the added long-term expenses would be worth it versus paying for special treatment from fabs like TSMC. That and factories take years to complete and spin up.

There's a chance Apple might even prefer the current arrangement, as it also tends to limit supply for competitors (at least, until there's enough capacity).
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Most of Apple's mobile competition has moved to Samsung for fab. Nvidia and AMD are the next largest customers and don't directly compete with Apple. I seriously doubt Apple "prefers" the current arrangement when it's costing them twice as much. Wasn't there just an article last week where Apple was trying to play hardball with TSMC and trying to freeze prices and TSMC called their bluff?
 
Aurelius said:
Yes and no. It certainly has enough cash on hand that it could build more than one factory, but those tend to cost tens of billions of dollars just to get started. Then there's labor costs, extending the supply chain... you get the idea. Apple would have to determine that the added long-term expenses would be worth it versus paying for special treatment from fabs like TSMC. That and factories take years to complete and spin up.

There's a chance Apple might even prefer the current arrangement, as it also tends to limit supply for competitors (at least, until there's enough capacity).
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It's not just a case of having enough cash on hand to build the fab, it's knowing how to make the process work. That's why Intel and Samsung are lagging a generation or two behind TSMC and SMIC (mainland China) is several generations farther back (IIRC low volume at 14nm) despite having enormous amounts of cash thrown at it.
 
kirbyrj said:
Most of Apple's mobile competition has moved to Samsung for fab. Nvidia and AMD are the next largest customers and don't directly compete with Apple. I seriously doubt Apple "prefers" the current arrangement when it's costing them twice as much. Wasn't there just an article last week where Apple was trying to play hardball with TSMC and trying to freeze prices and TSMC called their bluff?
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Oh, it can get expensive, but the question is whether or not it'll be more expensive in the long run to build factories. A squeeze like this might be temporary; the costs of a fab are permanent. That and staying ahead of the curve in manufacturing processes could be difficult.
 
Aurelius said:
Oh, it can get expensive, but the question is whether or not it'll be more expensive in the long run to build factories. A squeeze like this might be temporary; the costs of a fab are permanent. That and staying ahead of the curve in manufacturing processes could be difficult.
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I was responding more to the freezing out competition by purchasing as much fab space as possible.

Samsung is a viable alternative for many customers (including Apple not that long ago).

Obviously, constructing your own fab is expensive and the R&D to continually improve is probably prohibitively expensive when Samsung and TSMC fab chips.
 
kirbyrj said:
Samsung is a viable alternative for many customers (including Apple not that long ago).
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Currently Samsung is not at all a viable alternative for anything below 10nm. Their having to issue discounts due to poor yields and suffering from numerous production woes.

Qualcomm recently had to move its Snapdragon 8 series off Samsung when they reported to share holders a 65% failure rate on Samsungs process. The change over to TSMC for the same chip resulted in a less than 30% failure rate.

Samsung is struggling with production on its own Exynos lineup and Nvidia chose to pay upwards of $10B USD to move the 4000 series from Samsung 4nm to TSMC.

Internally Samsung is panicking over its fabbing processes.
 
Maybe Apple had the price already locked in and probably something in the contract about price increases.
 
DanNeely said:
It's not just a case of having enough cash on hand to build the fab, it's knowing how to make the process work. That's why Intel and Samsung are lagging a generation or two behind TSMC and SMIC (mainland China) is several generations farther back (IIRC low volume at 14nm) despite having enormous amounts of cash thrown at it.
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SMIC magically jumped to 7nm, of couse, ripped off TMSC again.
 
XenIneX said:
Also, they might be betting on TSMCs N4 node dropping in price, one way or another... (Better yields than expected? Snapping up excess capacity from Nvidia on the cheap?) *shrug*
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Apple may also be wary of having their mobile processors fabbed by their only competitor in the mobile market. Sure, their phones aren't completely Samsung-free at the moment, but the new gen is less dependent on Samsung than the previous gen.
 
Thunderdolt said:
Apple may also be wary of having their mobile processors fabbed by their only competitor in the mobile market. Sure, their phones aren't completely Samsung-free at the moment, but the new gen is less dependent on Samsung than the previous gen.
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As I understand it, Apple isn't averse to using Samsung's manufacturing — it just doesn't want to primarily depend on a rival, or any one company if it can avoid as much.

The challenge is, as mentioned earlier, launching a fab that offers the best manufacturing processes when production starts. Apple would need its plant to make whatever TSMC and others can offer a few years from now, and developing a new process without cribbing someone's notes is... difficult. While Apple has a longstanding history of making things itself when it's worried about overdependence, I suspect it'll have to be content with diversifying its third-party suppliers in this case.
 
Thunderdolt said:
Apple may also be wary of having their mobile processors fabbed by their only competitor in the mobile market. Sure, their phones aren't completely Samsung-free at the moment, but the new gen is less dependent on Samsung than the previous gen.
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Pretty sure fabbing on Samsung would absolutely tank the A-series performance/efficiency. So, that's just a non-starter. Until someone else comes up with some secret sauce, Apple's pretty well married to TSMC.
 
I had thought Apple was working with and funding TSMC to get a new fab built in the US for Apple silicon, but I could be wrong.
 
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