The upcoming iPhone prices might skyrocket due to Apple's increased expenses on this particular component.

Chips on ultra-small process nodes are facing significant challenges, requiring extensive ultraviolet lithography and high manufacturing complexity, leading to a projected 50% cost increase for 2nm chips compared to 3nm chips. This information is widely circulating on foreign technology news websites.

Significant Cost Increase Expected for 2nm Chip

According to assessments by experts at International Business Strategies (IBS), the increasing demand for complex manufacturing tools for next-generation processing chips significantly raises production costs. Nikkei Asia quoted IBS analysis, stating that the production cost of chips on the 2nm process will be over 50% higher than the 3nm process.

According to detailed calculations by IBS, building a 2nm chip manufacturing plant with a capacity of 50,000 wafers per month (WSPM) requires at least $28 billion. Compared to the $20 billion for 3nm chips, this is a significantly increased figure, highlighting the financial challenges and requirements for deploying 2nm chip manufacturing technology.

One of the main reasons for the high cost of 2nm chips is the increasing demand for extreme ultraviolet lithography (EUV), which translates to significant production costs. This situation not only affects leading technology companies but also directly impacts industry giants like Apple. The company is mass-producing chips for smartphones and PCs using TSMC's latest N3B (3nm) substrate.

Apple A18 is no exception

According to assessments by Arete Research, each 3nm Apple chip currently costs nearly $50 to produce. For example, the A17 Pro and 15 Pro Max chips have a die size of 100-110 square mm. This means each 300mm wafer can yield 586 A17 Pro chips. Under 100% yield conditions, the cost per chip is approximately $34. However, in reality, yields typically reach only about 85%, leading to production costs of over $40 per 3nm chip. This highlights the financial challenges and pressures of integrating 2nm chip manufacturing technology, which could appear in the Apple A18, into mass production processes.

According to evaluations by International Business Strategies (IBS), if Apple shifts to using the 2nm chip manufacturing process, they will have to pay approximately $30,000 per wafer, a significant increase from the current level of about $10,000. This will directly impact the final cost of the product for end consumers.

In the semiconductor field, a wafer is a thin silicon slice cut from a cylindrical silicon ingot, serving as the fundamental material for integrated circuit production. When chip production begins, companies like Intel use 2-inch wafers, while larger wafers such as 12-inch (300mm) and 8-inch (200mm) are now preferred to achieve high yields and reduce costs.

Based on preliminary estimates, analysts conclude that the production cost of chips on the 2nm process is much higher than on the 3nm process. To reduce costs, leading manufacturers like Intel and AMD are swiftly implementing optimization measures in the coming years. Therefore, there's a high likelihood that smartphone processors will continue to maintain their current designs for a long period, as the cost of 2nm chips remains prohibitively high.

The iPhone 15 Pro Max is even more expensive, up by 12% compared to its predecessor

Apple launched the iPhone 15 Pro Max with a starting price of $1,199 in the US market, reflecting significant upgrades compared to previous generations. This price hike, according to the latest information, is not without basis. This iPhone features a 5x telephoto camera along with numerous other improvements, requiring the company to accept higher production costs. According to Nikkei's report, the total production cost per iPhone 15 Pro Max is $558, more than 12% higher than its predecessor, making it Apple's most expensive flagship phone to date.

Specifically, the higher prices, ranging from 8-16% compared to the previous line, are evident across each variant in the iPhone 15 series. The estimated production cost of the iPhone 15 Pro, at $523, is 8% higher than its predecessor. Meanwhile, the 14% increase in materials cost for the average iPhone 15, estimated at $442, surpasses that of the iPhone 14 Plus. Notably, the base iPhone 15 exhibits the largest cost differential, at $423 per unit, representing a 16% increase over the iPhone 14.

The report also indicates that the 5x telephoto lens on the iPhone 15 Pro Max incurs over 380% more cost for Apple compared to the 3x optical zoom lens on the iPhone 14 Pro Max. This comes as no surprise given that key components such as the A17 Pro chip, Apple's first 3nm SoC, and the LTPO OLED display are among the most expensive in the entire assembly. Specifically, the breakdown of costs for critical components in the iPhone 15 Pro Max is as follows: the display costs $115, the titanium frame is $50, the A17 Pro chip accounts for $130, and the telephoto camera is $30.

These figures not only reflect Apple's strong investment in technology and product quality but also demonstrate the company's commitment to delivering breakthrough experiences for users. All these upgrades contribute to making the iPhone 15 Pro Max not only powerful in performance but also elegant and sophisticated in design.

The 'battle' over 2nm chips isn't just about Apple

Furthermore, one cannot overlook the technology race in 2nm chips among giants like TSMC, Samsung,... along with chip design companies such as Apple, Qualcomm, and MediaTek. TSMC and Samsung, with plans to produce 2nm chips by 2024, are the frontrunners in this field. Despite not manufacturing chips themselves, Apple, in its role as a designer, has closely collaborated with TSMC to create powerful A-series and M-series processors. Qualcomm and MediaTek, although chip designers, are also continuously innovating to stay competitive in this race.

The competition is not only about creating smaller chips but also focuses on enhancing performance, saving energy, and supporting complex AI applications. The development of chip technology not only drives the mobile industry forward but also opens up new possibilities in artificial intelligence and the Internet of Things (IoT), marking a new chapter in the history of information technology.

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